“What specific changes, if any, would you recommend to a policy maker to increase the effectiveness of corporate governance in this post-Enron era?
Due to corporate scandals, most notable the Enron scandal there appears to be a decline in the confidence of leadership in the American business. The first round of scandals saw Congress pass the Sarbanes-Oxley Act which “requires companies to set up confidential systems so that employees and others can raise red flags about suspected illegal or unethical auditing and accounting practices.” (Cross, p. 81) Some companies, for example have implemented an icon on their work computers that employees can click on and be directed to a company that they can directly report ethical misconduct that alerts the companies ethics committee. Many politicians believe they can legislate ethics, the danger that accompanies this type of mentality is crippling our economic system by threatening the vibrancy of enterprise, undermining our market’s creativity and flexibility and damage our economic prospects. It is extremely important that businesses realize this and restore public trust through its own voluntary actions. The technology in today’s world is able to trace emails sent from high ranking executives that shows corporate greed has triumphed over sound ethics (Vogl).
If American businesses are going to compete, there needs to be somewhat of a framework of integrity, honesty, and trust. Frank Vogl has created a 10 points of Ethics Model:
Law. Operates in accord with the spirit, not just the letter of the law.
Ethics Code. Place the corporate code of ethics at the center of corporate operations and decision taking and never, under any circumstances, set aside the code of conduct to permit special actions by executives.
Honesty. Demand that all corporate employees, starting with the CEO, are truthful with their colleagues, their customers and when representing the