Robert J. Rutland Center for Ethics

1. Robert J. Rutland Center for Ethics

2. Ethics, Leadershipand the CEO

3. Ethical Issues

4. Top 10 ethical issues facing the general business community • Improper accounting practices • Deceptive sales practices • Misleading the public or the media • Lying on reports/falsifying records • Dishonesty with customers • Conflicts of interest • Stealing/theft • Drug/alcohol abuse • Producing low quality or unsafe products • Unfair treatment of employees

5. Top 10 ethical issues facing your industry • Conflicts of interest (6) * • Stealing/theft (7) • Lying on reports/falsifying records (4) • Dishonesty with customers (5) • Drug/alcohol abuse (8) • Deceptive sales practices (2) • Improper accounting practices (1) • Lying/exaggerating on resumes and job applications (12) • Violations of privacy (18) • Bribes and kickbacks(11) * Compared to general business community rankings

6. Top Issues by Industry: Manufacturing • Stealing/theft (2) * • Drug/alcohol abuse (5) • 3. (tie) Conflicts of interest (1) • (tie) Unfair treatment of suppliers (12) • 4. (tie)Dishonesty with customers (4) • (tie) Lying on reports/falsifying records (3) • 5. Violating environmental regulations (17) * Compared to your industry rankings

7. Top Issues by Industry: Health Care and Social Assistance • Conflicts of interest (1) * • Violations of privacy (9) • Lying on reports/falsifying records (3) • Stealing/theft (2) • Improper accounting practices (7) * Compared to your industry rankings

8. Top Issues by Industry: Banking, Finance and Insurance • Conflicts of interest (1) * • Improper accounting practices (7) • 3. (tie) Violations of privacy (9) • (tie) Lying on reports/falsifying records (3) • 4. (tie) Stealing/theft (2) • (tie) Lying/exaggerating on resumes or job applications (8) • Dishonesty with customers (4) * Compared to your industry rankings

9. Top Issues by Industry: Professional and Technical Services • Conflicts of interest (1) * • Lying on reports/falsifying records (3) • Dishonesty with customers (4) • 4. (tie) Deceptive sales practices (6) • (tie) Predatory employment practices (18) * Compared to your industry rankings

10. Top Issues by Industry: Information Services and Technology • Conflicts of interest (1) * • 2. (tie) Deceptive sales practices (6) • (tie) Dishonesty with customers (4) • 3.(tie) Misleading the public or the media (13) • (tie) Lying/exaggerative on resumes and job applications (8) • 4. (tie) Economic espionage/divulging trade secrets (19) • (tie) Lying on reports/falsifying records (3) • 5. Unfair treatment of suppliers (12) * Compared to your industry rankings

11. Top Issues by Industry: Construction • Stealing/theft (2) * • Drug and alcohol abuse(5) • 3. Unfair treatment of suppliers (12) • 4. (tie) Deceptive sales practices (6) • (tie) Bribes and kickbacks (10) • (tie) Dishonesty with customers (4) • 5. Producing low quality or unsafe products (14) * Compared to your industry rankings

12. The State of Ethics in Business

13. Mean = 3.42

14. Mean = 4.50

15. Mean = 3.14

16. Mean = 3.03

17. Mean = 3.00

18. All Companies Yes No

19. Affected by Sarbanes-Oxley, other recent regulations? Public Companies Private Companies Yes No

20. If YES, what have companies done since 2002: • Updated ethics or compliance policies 33.0% • Created or strengthened ethics and compliance training 21.0 • Developed new communication strategies for managing conduct 19.3 • Hired new staff or restructured organization responsible for ethics 13.7 • Revised mission, vision or values statements 11.7 • Increased budget for ethics and compliance management 9.3

21. Of CEOs who say the new rules have affected how their companies manage ethics and compliance. . . • 46 percent think Sarbanes-Oxley has improved the standard of ethical performance in corporate America. • BUT only 25 percent say it has improved the standard of ethical performance in their own business. • Almost 40 percent say it has not improved the standard of ethical performance in their own business.

22. Public Companies Private Companies

23. Public Companies Private Companies

24. Managing Ethics

25. What are the principal causes of unethical conduct among employees? • Inadequate training and communication • Indifference or low morale • Pressure to meet deadlines and schedules • Failure of the organization to establish an effective compliance program • Not understanding the company’s ethics policies

26. What are the principal causes of unethical conduct among employees? • Failure of the organization’s leadership in establishing ethical standards and culture • Personal greed • Weakness of personal character • Pressure to meet unrealistic performance or financial goals • Desire to advance career

27. All Companies Yes No

28. Over $1 billion Under $10 million $10 - $50 million $50 - $250 million $250 - $1 billion

29. All Companies Yes No

30. Over $1 billion Under $10 million $10 - $50 million $50 - $250 million $250 - $1 billion

31. All Companies Yes No

32. Over $1 billion Under $10 million $10 - $50 million $50 - $250 million $250 - $1 billion

33. All Companies Yes No

34. Over $1 billion Under $10 million $10 - $50 million $50 - $250 million $250 - $1 billion

35. What do CEOs say was the most important motivation for implementing a corporate ethics initiative? • Provide guidance for employee conduct • Ensure legal compliance • Improve/protect reputation • Be socially responsible • 5. (tie) Improve profits/shareholder value (tie) Retain/motivate employees

36. CEO Ethics and Leadership

37. Mean = 4.87

38. Mean = 3.66

39. Mean = 3.35

40. Generally Higher About the Same Generally Lower

41. www.southerninstitute.org www.clemson.edu/caah/rutland