Crackdown on executive pay makes news in U.S. and Europe; corruption scandal captures public attention in Russia; BusinessWeek offers “Ethics 101″ Course for interns

VARIOUS DATELINES
An ethical slant on business and finance was featured in a raft of stories last week. Among the coverage:

• The U.S. House of Representatives passed a measure that would create an overarching government agency to crack down on abusive and confusing lending and investment practices, regulate hedge funds, and give shareholders an advisory vote on pay for executives, Forbes reports. The measure now must be reconciled with a similar bill passed by the Senate. But industry groups are expected to keep pressure on lawmakers to soften some parts of the legislation and “bend it to their advantage,” notes Forbes.
• EU leaders are leaning toward increasing taxes on bankers’ bonuses, the BBC reports. U.K. prime minister Gordon Brown and French president Nicolas Sarkozy issued a joint letter in which they endorsed such a plan, saying it is “simply not acceptable” for taxpayers to cover the cost of bank failures but not benefit from their successes, according to the report. The global financial crisis, they write, has made them realize “that we are now in an economy which is no longer national but global, so financial standards must also be global.” They said there was an “urgent need for a new compact between global banks and the society they serve.”
• Goldman Sachs, caught in the crossfire of public anger and legislative outrage over the ethics of executive compensation, will eliminate cash bonuses for 30 of its top executives this year and give shareholders a say on pay levels, according to the Financial Times. All 30 members of Goldman’s management committee will receive their bonuses in stock that must be held for five years. The stockholders’ vote on pay and bonuses will be nonbinding.
• Russian president Dmitry Medvedev fired 20 senior prison officials after the mid-November death of a jailed lawyer who was involved in the defense of financial institutions charged with participating in a fraud and forgery scheme allegedly linked to high Russian officials, the AP reports. Sergei Magnitsky had been jailed on tax evasion charges. Lawyers for Magnitsky claim he died after being refused medical treatment. The case had become a touchstone for anticorruption crusaders in Russia, reports London’s Daily Telegraph, because Magnitsky had battled to uncover purported links between the Russian mafia and government officials. Colleagues of Magnitsky say he was persecuted and systematically mistreated in prison in retaliation for his anticorruption efforts and refusal to recant his claims.
• Interns are in a position to do major damage to the companies that sponsor them, writes BusinessWeek reporter Michael Levin in an article titled “Ethics 101 for Interns.” Levin’s advice to interns: “You’re probably not thinking about ethics — yet. But just one ethical or legal mistake can bring down your career and possibly even your company. It doesn’t matter if you’ve been in your position one day or 15 years. Fortunately, you don’t have to be an ethics and compliance expert to get started on the right foot. Though you may not know what the future holds for your career, you can make sure it doesn’t include mistakes caused by a lack of ethical intelligence.” Among other admonishments, Levin advises interns to study company policies, never bend the rules, never retaliate against workers who report harassment or discrimination, or fail to report quality or safety defects.

Sources: AP, Dec. 11 — BusinessWeek, Dec. 11 — Forbes, Dec. 11 — BBC, Dec. 10 — Financial Times, Dec. 11 — Telegraph, Nov. 30.

For more information, see: Related Newsline story, Nov. 16 — Related Newsline story, Nov. 9 — Related Newsline story, Nov. 2 — Related Newsline story, Oct. 26 — Related Newsline Commentary, Oct. 26.