Ethics Newsline®

From Public Agenda:

“When typical citizens talk about business ethics, what really gets under their skin are executives who enrich themselves while driving their companies into the ground. Protecting employees’ jobs, they say, should be a top ethical priority for American business. When executives talk about ethics, they are very concerned about the damage that recent scandals have done to business’ reputation and the need to restore public trust.

“In a new study based on focus groups with typical Americans and interviews with executives and experts, Public Agenda in collaboration with the Kettering Foundation found that ordinary citizens define ethics more broadly than do business executives. But in ‘A Few Bad Apples? An Exploratory Look at What Typical Americans Think about Business Ethics Today,’ the two groups found some areas of agreement on such issues as the root causes of corporate scandals and the debate about new laws and regulations. But views differed on executive pay and were dramatically different on the subject of job protection and layoffs.

“According to Public Agenda president Ruth A. Wooden, ‘…Business and the public are coming from very different starting points: the public as consumers and employees, and business leaders as managers and decision makers. What is especially interesting is that both groups see a general decline in values contributing to recent scandals. Business leaders were especially concerned that the actions of a few ‘bad apples’ had done much to tarnish the reputation of the vast majority of honest and ethical executives.’

“Americans and Executives Split on Jobs

“Saving jobs is where business leaders and citizens show marked differences of opinion. Over and over, focus group participants said that … preserving jobs should be a major ethical priority for business and that layoffs should be a last resort. In contrast, most business leaders saw jobs as a business rather than an ethical or moral issue. In interviews, they made it clear that sometimes layoffs are an inevitable part of staying competitive.

“Greed and Weak Values

“Focus group participants often said greed and poor values were at the root of many scandals. They believed that executives at some of these corporations had either lost their moral bearings or never had sound values to begin with.

“Focus group participants were most aggravated over Enron-type situations where executives enriched themselves as their company was dissolving, pensions were being lost, and employees were losing their jobs….

“Business leaders cited the problem of greed and declining values in society as a whole, as well as on the part of certain corporate executives. But they also stressed that by far, most business executives act ethically, even in the face of relentless pressures for profits that can make it tempting to cut corners for short-term gains. They also stressed the importance of moral leadership and said that a company’s ethical stance is set at the very top.

“Both business and the public agreed that recent corporate scandals are part of a larger erosion of ethics and morals. ‘People just do things to get ahead now. We just think about ourselves and not the community. It’s a more selfish time,’ said a Texas woman.

“Reward Success, Not Failure

“Some business leaders told Public Agenda that executive pay had gotten out of proportion, and a number predicted that increasingly, compensation will be tied to fundamental performance. However, others noted that even if a company is struggling and laying off workers, high pay for a strong leader can make sense.

“While ‘baffled and even indignant’ at executives who cash in while their companies are foundering, many focus group participants did not seem to begrudge high salaries for executives who were instrumental to their companies’ success. They admired those who protect their employees, provide a good product, and respect their customers….”