Business Ethics: Corporate Responses to Scandal

Abstract

The wave of scandals that has inundated business since Enron has had far reaching consequences. Questions of ethics have taken on particular urgency as companies grapple with increased media scrutiny of governance matters, as well as of corporate social and environmental issues. This In Practice paper examines three principal responses from big business: (1) the infusion of ethical principles in corporate cultures, (2) the appointment of ‘Chief Ethics Officers’, and (3) the adoption of strict ethical guidelines and codes of conduct. The Reputation Institute (RI) finds that corporate ethics has become an indelible feature of stakeholder engagement — not just as a set of principles but as a process affecting decision-making at all levels. Ethics are in fact so critical to long-term business sustainability that they will increasingly form the basis of serious executive leadership.