Team 12 Business Ethics A Chief Ethics Officer? A Chief Ethics Officer for Microsoft?

Business Ethics Roadmap  Role of Chief Ethics Officer  Pros and Cons of Chief Ethics Officers  Can ethical standards be imposed top down?  Chief Ethics Officer – Fad or Here to Stay?

Business Ethics Chief Ethics Officer – What do they do?  Foster and maintain ethical behaviour within corporations  Handle complaints (ethical dilemmas and associated problems)  Legal compliance  “Navigate the grey space that is above the law” – Megan Barry, Former Chief Ethics Officer, Nortel

Business Ethics Pros and Cons of a Chief Ethics Officer Time pressures on CEO Specific “expertise” Independence Internal Ombudsman Internal Sounding Board Systematises ethical practice Positive signal (market/internal) Costs vs Benefits Is it necessary? Bad signal to the market? Responsibility can’t be delegated Potential Abdication Window Dressing PROSCONS

Business Ethics Would a CE thics O reduce the level of unethical behaviour?  HBS Study on performance of ethics based businesses – 756% increase in net income!!!!! But is a CEO the best way to go?  Can help decision making where ethical dilemmas exist  Advantages over non-executive directors – specific expertise, daily contact with the organisation  Very useful as part of a wider culture change  Will not address the issues around direct fraud / theft – Enron etc.  James Hardie Test – would a Chief Ethics Officer have made a difference in this situation?

Business Ethics Can ethical standards be imposed top down?  Equivalent to culture shaping from the top – the 3 C’s – Culture, Control and Consequences  Walk the Talk / Set the Tone – Principled Leadership  Provides a set of Principles that can guide actions (Grace / Cohen 1998) but for application to specific situations you need it embedded in culture to support individual moral decision-making.  Needs to be supported by formal organisational processes – HR practices (Employment decisions, Promotion decisions, Disciplinary decisions)  Needs to be congruent with other functions in the organisation  When the chips are down…real test

Business Ethics Latest fad?  Is it a fad or part of an evolutionary process in business?  Macro trends enforcing need for CEO - Shareholder activism (CALPERS) - Regulatory compliance (Sarbanes-Oxley) - Globalization (cross-cultural ethical systems)  Practical considerations that may limit it to a fad - Contemporaneous political considerations (Spitzer et al) - Requires a skilled and capable individual - Role could be ambiguous and create unnecessary bureaucracy  Efficacy