Brad Agle -  Ethics, Expectations and Board Dynamics
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Brad Agle - Ethics, Expectations and Board Dynamics






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    Brad Agle -  Ethics, Expectations and Board Dynamics Brad Agle - Ethics, Expectations and Board Dynamics Presentation Transcript

    • ETHICS, EXPECTATIONS, AND BOARD DYNAMICS Dr. Bradley R. Agle George W. Romney Endowed Professor Marriott School of Management Fellow, Wheatley Institution Brigham Young University BECOMING A POSITIVE DEVIANT: ETHICS IN THE BOARDROOM
    • Name the Company? First Clue
      • This company inflated its financial statements by way of complex “straw deals”
    • Name the Company? Second Clue
      • This company made large financial donations to politicians who could influence regulations affecting its industry
    • Name the Company? Third Clue
      • This company’s accounting firm, Arthur Andersen, served both consultancy and auditor roles, and paid a steep price for its role in the scandal (although it resigned the account years before the scandal unfolded)
    • Name the Company? Fourth Clue
      • This company was forced into bankruptcy, decimating the retirement funds of trusting investors and costing taxpayers billions of dollars
    • Name the Company? Fifth Clue
      • All of the events referred to in the earlier clues occurred at this company during the 1980’s
    • Ethical Corporate Leadership
      • Personal Behavior
      Corporate Leadership Ethical Leadership Cynicism Bad News Confusion/ Lack of Recognition Active Inactive Positive Negative
    • 1991 U.S. Sentencing Guidelines Seven Steps of Due Diligence
      • Develop Compliance Standards & Procedures
      • Give One Executive Overall Responsibility
      • Ensure That Executives are Trustworthy
      • Communicate Standards & Procedures
      • Create Steps to Ensure Compliance
      • Enforce Standards Consistently
      • Modify Program Appropriately
      Corporate Leadership
    • 2004 Amended U.S. Sentencing Guidelines
      • Requirements are Enhanced with greater Rigor and Detail
      • As a Fundamental Proposition, organizations must promote an organizational culture that promotes ethical conduct and commitment to compliance with the law
      • Requires Boards and Executives to assume the oversight and management of compliance and ethics programs
      • This presumes active leadership in defining the content and operation of the program
    • 2004 Amended U.S. Sentencing Guidelines – Minimum Requirements
      • Organizations must:
      • Identify areas of risk where criminal violations may occur
      • Train high-level officials as well as employees in relevant legal standards and obligations
      • Give compliance and ethics officers sufficient authority and resources to carry out their responsibilities
    • Areas of Influence in Creating an Ethical Organizational Culture
      • 1) Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, socialization
      • 2) Design of physical spaces, facades, buildings
      • 3) Deliberate role-modeling, teaching, and coaching by leaders
      • 4) Explicit reward and status system, promotion criteria
    • Areas of Influence in Creating an Ethical Organizational Culture
      • 5) Stories, legends, myths, and parables about key people and events
      • 6) What leaders pay attention to, measure, and control
      • 7) Leader reactions to critical incidents and organizational crises
      • 8) How the organization is designed and structured
      • 9) Organizational systems and procedures
      • 10) Criteria used for recruitment, selection, promotion, leveling off, retirement, and firing
    • Ethical Role Modeling
      • What makes one an ethical role model?
      • Findings from my research with Drs. Trevino and Weaver at the Ethics Resource Center…
      Personal Behavior
    • Ethical Role Models
      • What they are not (or at least not necessarily):
      • Perfect
      • Distant
      • Successful
    • Four Dimensions of Ethical Role Models
      • Interpersonal Behaviors
      • Ethical Action and Expectations of Self
      • Fairness with Others
      • Articulation of Ethical Standards
    • Interpersonal Behaviors
      • Care, Concern, Compassion
      • Support and Take Responsibility for Others
      • Values and Maintains Relationships
      • Hardworking and Helpful
      • Accentuates the Positive
      • Accepts others’ failures
    • Ethical Action and Expectations of Self
      • Honesty, Integrity, Trustworthiness
      • Humility
      • Holds self to high ethical standard
      • Consistently ethical in public and private life
      • Self-sacrificial
      • Accepts responsibility for, and open about, own ethical failings
    • Fairness with others
      • Distributes resources equitably
      • Open to and solicitous of input
      • Respects other equally – never condescending, even in disagreements
      • Offers explanations of decisions
    • Articulating Ethical Standards
      • Communicates high ethical standards
      • Holds others ethically accountable
      • Puts ethics above personal/company interests
      • Uncompromising, consistent ethical values
      • Takes long-term multiple stakeholder perspective
    • Warning: Bathsheba Syndrome
      • Top Leaders:
      • Have Privileged Access
      • Can Lose Strategic Focus
      • Can Come to Believe that the Rules Don’t Apply to Them
      • Oftentimes Have a Well-Earned, but Inflated Belief in Their Ability to Control Events
    • The Importance of Leadership
      • “ Never underestimate the power of a small group of people to change the world – indeed, nothing else ever has” Margaret Mead
    • Business Ethics in 2011: Where will the Leadership Come From?
    • Comments and Questions