1. John H. Engel Senior Accountant University of Notre Dame

3. Why this survey makes sense Why do we care of about Ethics Answer should be obvious to us all 2002 was a bad year for Ethics in America with Enron and other companies 2007 showed a return to pre Enron problems SOX may not be working 2009 Bad Recessionary Period-What kind of effect is this having on Ethics

4. Background for Survey The Background The Ethics Resource Center began collecting data in the mid-1990s to assess the state of ethics in the American workplace. Its National Business Ethics Survey® has been in the field every two years since 2003. In 2007, NBES benchmarking showed that key measures of workplace ethics had declined since 2005. The decline appeared to be at a pre Enron level. What effect the recession has had on workplace ethics is the focus of the 2009 survey.

5. Key Measures shown in Survey Misconduct at work is down. Whistleblowing is up. Ethical cultures are stronger. Pressure to cut corners is lower.

6. Impact of Recession The Recession’s Impact on Standards and Culture A closer look at the 2009 results shows that, while overall results were surprisingly good, some – although relatively few – said the recession had had a negative impact on ethical culture and standards. 22 percent agreed that “the recession has negatively impacted the ethical culture within my company.” 10 percent said that “to stay in business during the recession, their company lowered its ethical standards.” This erosion of culture had further implications. 78 percent affected by company’s effort to weather the recession.

8. Continued

9. Type of Retaliation

10. Perceiving Pressure to Commit Misconduct

11. Conclusions and Recommendations We are experiencing an ethics bubble Executives who don’t elevate culture to a priority risk long-term business problems

12. Conclusions and Recommendations Recommendations for Executives Prepare for the return of business as usual Establish performance goals for senior managers on ethical leadership.

13. Conclusions & Recommendations Recommendations for Directors Create an ethics committee of the board Recruit knowledgeable ethics professionals to serve on the board. Establish financial incentives for ethical leadership by the CEO.

14. Conclusions & Recommendations Recommendations for Policy Makers Emphasize culture and principles. Encourage the creation of board ethics committees Encourage disclosure about corporate ethical culture.

15. Conclusions & Recommendations Recommendations for Ethics & Compliance Professionals Focus on culture and collect data. Start with management, especially if your organization is taking recession counter- measures Prepare for the return to business as usual.

16. Survey Copies If you would like a copy of the survey please go to: http://www.ethics.org/nbes/download.html

17. Credits All information presented comes from the 2009 National Business Ethics Survey from the Ethics Resource Center Website: http://www.ethics.org http://www.ethics.org

18. A little Ethics Humor!! A defendant in a lawsuit involving large sums of money was talking to his lawyer. "If I lose this case, I'll be ruined." "It's in the judge's hands now," said the lawyer. "Would it help if I sent the judge a box of cigars?" "Oh no! This judge is a stickler on ethical behavior. A stunt like that would prejudice him against you. He might even hold you in contempt of court. In fact, you shouldn't even smile at the judge." Within the course of time, the judge rendered a decision in favor of the defendant. As the defendant left the courthouse, he said to his lawyer, "Thanks for the tip about the cigars. It worked!" "I'm sure we would have lost the case if you'd sent them" said the lawyer. "But, I did send them" said the defendant. "What? You did?" said the lawyer, incredulously. "Yes. That's how we won the case." "I don't understand," said the lawyer. "It's easy. I sent the cigars to the judge, but enclosed the plaintiff's business card."