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Expect More Business Scandals, Ethics Officers Say

Compiled By Jill Jusko WorldCom Inc.'s announcement on June 25 of accounting irregularities should have come as no shock to participants in a recent survey by the Conference Board, New York. A majority of them said to expect at least half a dozen more major business scandals during the next year. ("Major" is defined as causing more than $200 million in lost shareholder value.) The survey queried nearly 100 senior ethics executives who attended a May Conference Board business ethics conference. More than 80% of the respondents work for major for-profit organizations. Other survey results indicate:

  • Nearly 60% of respondents believe their own boards of directors are not involved enough in ethics or compliance issues.
  • A majority (54%) say ethics training for Enron Corp. senior management would have made little to no difference in preventing what occurred.
  • More than 80% say they have a help line or hot line to report concerns about ethics issues.
  • When great company performers don't meet their company's ethics values, 23% of respondents say "we tolerate them," nearly 30% say "we coach them," 18% say "we fire them," and 8% say "we promote them." The Conference Board is a not-for-profit membership organization that addresses business issues.
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