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Ethical Leadership Volume 1, Number 1

In This Issue

• A word from the Chairman of the Board

• Featured Article

Fighting Internal Fraud at Nationwide Insurance by LeRoy Johnston

• From the Corner Office

An Interview with Melissa Ingwersen, Central OH President, JPMorgan Chase Bank

• Editorial

• Debating the Issues

Minimum wage vs. Living wage

• Ask Ethicus

• Profile: Council Chairman of the Board

• Message from the Executive Director

• Meet the Council Staff

• Highlights of recent Lunchbreak Programs

Council for Ethics in Economics

A Word from the Chairman of the Board On behalf of the Board of Trustees, I welcome you to Ethical Leadership, the new newsletter of the Council for Ethics in Economics.

I am delighted to have been associated with the Council for much of its quarter century plus of service. As many readers know, the Council was formed in the late 1970s as a result of a stimulating discussion initiated by Ross Laboratories’ contact with leaders in the Central Ohio business, religious and academic communities. The

purpose of that discussion was to help Ross (now a division of Abbott) and its leaders determine how to respond to the world­wide boycott of Ross’ competitor, Nestle, and its infant formula product. The boycott was organized because many thought it inappropriate for Nestle to be marketing powdered infant formula in third world countries, where it was likely to be mixed with impure water. The invited participants found the cross­disciplinary discussion so stimulating that they decided to form an organization to sustain debate and dialogue about ethical issues. Thus, the Council was born.

Over the years, the Council has continued to stimulate and sustain this dialogue. We organized two international business ethics conferences that were convened in Columbus. We created and facilitated a two year project on Honesty in the Workplace, which developed task forces in twelve different business, professional and community sectors. We have hosted countless speakers, presentations and panels on ethics in business and professions over the years, in breakfast, luncheon and day­ long formats. Finally, we have been delighted to provide leadership and oversight to a major initiative in Character Education for the State of Ohio, and to host an annual Laws of Life essay contest on character and leadership.

This new newsletter is an important component of the Council’s mission, to encourage dialogue and exchange about ethical issues. We hope you enjoy and are engaged by this new format, and we look forward to receiving your ideas and feedback.

Roy J. Lewicki

Featured Article: Fighting Internal Fraud at Nationwide Insurance LeRoy Johnston‐Associate Vice President‐Office of Ethics and Business Practices

The Association of Certified Fraud Examiners, in its "2004 Report to the Nation," estimates that the typical U.S. organization loses six percent of its revenue to internal fraud. Internal fraud can take many forms, including embezzlement of money and theft of confidential information.

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Executive Committee

Dr. Roy J. Lewicki Chairman of the Board

Mr. Rich Mueller Vice Chairman

Mr. Mike Distelhorst President

Mr. Glenn Soden Treasurer

Dr. Hal Babson Secretary

Council for Ethics in Economics

This finding suggests that organizations should devote more resources to detecting and deterring internal fraud. In addition to boosting the bottom line and holding down prices, an organization that systematically roots out internal fraud sends a message to its associates that acting with honesty and integrity is a core value.

At Nationwide, we have created a seven­person internal investigation unit, housed in the Office of Ethics and Business Practices, whose primary mission is to detect and deter internal fraud. The unit is staffed with experienced, certified fraud examiners. The members have backgrounds in law enforcement, military investigation, compliance and internal auditing. Key initiatives of the unit in 2006 include:

• Increasing the number of tips.

Studies show that fraud is more likely to be detected through a tip than any other means. Our experience has been that about half of the tips we investigate turn out to be substantiated. To increase the number of tips, we are taking steps to raise awareness among managers and associates about what to look for, and what to do if they spot something suspicious. Continued on page 8.

From the Corner Office Interview: Melissa Ingwersen, Central OH President, JPMorgan Chase Bank, NA

By: Joseph R. Cook, Adjunct Professor, Capital University, School of Management

Welcome Melissa. Can you tell us about JPMorgan Chase?

JPMorgan Chase is a leading worldwide financial institution and a significant employer in Central Ohio. We have approximately 14,000 employees in the Central Ohio area and approximately 17,000 total employees in Ohio. This represents about 10% of JPMorgan Chase’s global workforce of 168,000 employees. JPMorgan Chase has 62 branches in Central Ohio and delivers banking and financial products to consumers, businesses and institutions.

Can you tell us your background?

As President of the Central Ohio area for JPMorgan Chase Bank, I am responsible for all of the bank’s corporate banking activities in Central Ohio and lead the bank’s broader strategies in the market. I joined the predecessor company, Bank One, in 1989. I began my banking career as a credit analyst with National City Corporation and later served in various lending roles in Metropolitan Lending, National Lending and Private Banking. I received a Bachelor of Science degree in Communication Studies from Northwestern University in 1982.

I have served in many community leadership positions including co­chair of the 2003 Operation Feed campaign and the 2004 State Board of Education task force on “Quality High Schools”. I am trustee on the boards of The YWCA of Columbus, Columbus Chamber of Commerce, Franklin University, and Ross Heart Hospital, and I am also a member of the Columbus Partnership. I reside in Bexley with my husband and two children. Continued on page 9.

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Editorial Board J. Michael Houlahan Chairman

Retired Foreign Service

Joseph Cook Capital University

Roy J. Lewicki Ohio State University

LeRoy Johnston Nationwide

Seth T. Becker Oakstone Mortgage

Lisa K. Mueller Council for Ethics in Economics

Contact Us ethical.leadership@yahoo.com

Contact Ethicus Ask_Ethicus@yahoo.com

Council for Ethics in Economics

Editorial J. Michael Houlahan

Welcome to the inaugural issue of the Council for Ethics in Economics newsletter. Our intent is to inform our readership concerning ethical issues in the workplace, while also offering varied and entertaining content. In this and future issues we hope to examine a range of ethical questions and challenges that arise in today’s fast­paced corporate world. Some of these questions may be complex and controversial.

Sadly, corporate culture is increasingly regarded with suspicion and even alarm by the public. In the last few years we have seen a parade of major corporations caught in unethical and sometimes felonious activities. These firms include some once thought to be among the most innovative and successful in the business world. Leading firms in a range of fields, including energy, banking, auditing and investment have been assessed huge fines for unethical dealings. Executives have been jailed.

Publicity over golden parachutes, allegedly excessive executive pay packages often unrelated to corporate performance, and interlocking boards of directors, rubber stamping management excesses all add to image problems.

Globalization has created its own set of concerns. A growing tendency for profitable corporations to outsource overseas and downsize domestic work forces has come under fire. Also generating controversy is the practice of some already profitable corporations in dramatically cutting pay scales to fatten the bottom line and please stock holders at the expense of employees. Increasingly corporations default on seriously under­funded pension plans, thereby unloading these pension responsibilities onto taxpayers.

With the negative publicity resulting from this rash of corporate misbehavior, it shouldn’t surprise us if the public increasingly views the Gordon Gekko “greed is good” film stereotype as representative of corporate ethics. (Gordon Gekko, played by Michael Douglas, was a character in “Wall Street”, a 1987 film examining the decline of corporate ethics.)

Of course Gordon Gekko is a parody, and the vast majority of corporations and individual executives are honest. However, the public perception left by those who are caught in felonious or unethical behavior is damaging to the interests of the entire business community. In future newsletters, we hope to examine with you readers some of the issues behind this growing perception of corporate greed and misbehavior. To do this properly, we need written input. Some of the correspondence we receive will be published in future issues.

This inaugural issue includes an article on Fighting Internal Fraud at Nationwide Insurance; an interview with the Central Ohio President of J.P. Morgan Chase; a profile of Council for Ethics in Economics Chairman Roy Lewicki; a column soliciting your views on the minimum wage vs. living wage controversy; and an ethics advice column by “Ethicus”.

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2006 Board of Trustees

Dr. Roy J. Lewicki The Ohio State University

Mr. Glenn Soden

Nationwide

Mr. Mike Distelhorst

Capital University

Dr. Hal Babson

Columbus State Community College

Mr. Rich Mueller

American Electric Power

Ms. Mary Held

Mary Held & Associates

Ms. Frances Wright

Wendy’s International

Mr. Norman Wilson

Huntington Bank

Mr. Ronald H. Stolle

Kent State University

Mr. LeRoy Johnston

Nationwide

Mr. Joseph R. Cook

Capital University

Mr. J. Michael Houlahan

Retired Foreign Service Officer

Mr. George Albu

Federal Mediation & Conciliation Services

Mr. James D. Abrams

Chester, Wilcox & Saxbe

Dr. Ervin Smith

Retired

Ms. Sallie Sherman

S4 Consulting, Inc.

Mr. David Breitmayer

PricewaterhouseCoopers

Council for Ethics in Economics

Debating the Issues Minimum Wage vs. Living Wage J. Michael Houlahan

In our next issue we hope to discuss the minimum wage vs. a “living wage”. At this writing, the state legislature has voted to increase Ohio’s minimum wage from $4.25 an hour to the federal minimum wage of $5.15 an hour. A potential fall ballot initiative would move the rate to $6.85. (Prior to this legislation, only Ohio and Kansas scales were lower than the federal minimum wage.)

Increasing the minimum wage to the federal level of $5.15 an hour would mean an annual income of $10,300 based on a 40 hour week, 50 weeks a year. The initiative’s suggested $6.85 an hour, translates into $13,700 a year. This begs two questions: 1) should employers be required to pay a “living wage” to a fulltime adult worker? 2) If so, at what amount should this minimum living wage be set? (Ohio communities vary in calculating this; however, somewhere between $6.15 and $8.70 for a single adult appears to be a ballpark figure.) If the federal minimum wage had increased since 1968 at the rate of inflation, today it would be $9 per hour.

Those proposing a further increase of the minimum wage to $6.85 an hour, claim that this amount is the bare minimum that an employer should offer a fulltime adult employee. Some argue that this scale still falls below any reasonable definition of a living wage in many Ohio communities.

Among the arguments used by those opposing such an increase, is the allegation that such a minimum wage will impact dangerously on many Ohio small businesses. Both groups buttress their positions with statistics and appeals to a sense of fair play.

In your view, what position should commercial interests and government back? In other words, what is a minimum fair wage? Is there a floor in Ohio below which a minimum wage should not sink? Should the business community and government have an obligation to codify and observe such a floor? Should the floor automatically be increased to keep pace with inflation—and avoid future political battles? Please let us hear from you.

Comments on the minimum wage vs. living wage issue should be sent to ethical.leadership@yahoo.com. Your name, address and telephone number must be included. Also indicate whether or not you wish your name used if we publish your letter.

Ask Ethicus: My intention is to write a regular column about the role ethics plays in our daily lives. At times we seem to have lost sight of accomplishments other than those of material success. It goes without saying that economic and material success is important, very, very important, but it is not the only achievement that matters.

I thought I would start with an easy situation. In this example, you buy something at the store, say a newspaper, and you receive the wrong amount of change. Do you return the money?

At first, this seems easy, and I am sure everyone says (I hope) “Yes, I would return the excess money”. We easily see why this is. You agreed with the store owner to the price for a certain service or good, have received excess payment, and so return the excess amount. It could be viewed as an informal/verbal contract.

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Council for Ethics in Economics

On the other hand, you did not agree to act as the store owner’s banker. You bought and paid for the newspaper and took the change provided. Was it incumbent upon you to count the change and return the excess? Did you have a moral obligation to return something that was given to you beyond what was anticipated, or was this just “caveat emptor” (buyer beware)? Does the amount of the under/over payment matter? Are you morally obligated to return it?

In a practical sense the amount of the overpayment does matter. We are more insistent to be re­paid a large amount than a small amount. On the other hand, what is in question is not the amount, but it’s the taking that matters.

This is the heart of the matter. For it is not in the owner’s behavior that we find the answer. That is, we do not say “I will ask the owner and see what he thinks” (Perhaps, because we know his answer!). The more important observation is not about the other, but about the self. Morality asks not how “the other” should behave, but how I should behave. Returning the change to the owner is not about whether it is important to the owner or not. That is a different question.

So after all this, suppose your business, or your employer, receives too large a refund from one of its vendors. Do you refund the overpayment? Or do you wait for the other company to discover the overpayment for themselves? If this overpayment allows you to receive a significant bonus, or keep your job, do you (still?) return the overpayment?

Please send me your comments and opinions at Ask_Ethicus@yahoo.com. The most interesting out­come is for us to develop a dialogue so we can publish your comments and observations.

In my view, as I said earlier, ethical behavior is between you and yourself. For me, bonuses lose value, even if denominated in dollars, unless they are legitimately and rightfully earned. For me, effort is the value and the reward. The bonus is only the public acknowledgement of the effort, not an end unto itself. I would prefer to return the overpayment and not receive the bonus, but know that I earned what I received.

Let me know what you think. Until next time, hoping you always lead an examined life.

Do you have a situation you would like to discuss with Ethicus? Email us at Ask_Ethicus@yahoo.com with your situations you would like to discuss. Just let us know if you want to remain anonymous.

Profile: Chairman of the Council Board J. Michael Houlahan

This is the first of several profiles on Council leadership. Editor

Council for Ethics in Economics Chairman Roy J. Lewicki also is Professor of Management and Human Resources and Dean's Distinguished Teaching Professor at the prestigious Max M. Fisher College of Business at The Ohio State University.

At Fisher, Roy is responsible for courses in organizational behavior and ethical leadership. The course on ethical leadership is a relatively new offering, and is part of the Fisher College’s increased emphasis on business ethics. Picking up on the large number of ethics scandals in corporate America, the course focuses on leadership and character, as well as ethical decision making.

Educated at Dartmouth College and Columbia University, Roy Lewicki served on

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Take the March Survey

Is working on personal business at work stealing? March Survey Question

Interested in Joining the Council?

Visit our website at www.businessethics.org

Contact the Council

Address:

191 W. Nationwide Blvd. Suite 300B

Columbus, OH 43215

Phone:

(614) 221‐8661

Fax:

(614) 221‐8707

Email:

Council_for_ethics_in_econo mics@yahoo.com

Council for Ethics in Economics

the faculties of Yale University, Dartmouth College and Duke University prior to joining the OSU faculty in 1984. In addition to his faculty appointment at Ohio State, Professor Lewicki also served as Associate Dean for Graduate Management Programs (1984­91) and Academic Director of Executive Education (1991­92) at the Fisher College of Business.

Roy also has research and teaching interests in the fields of negotiation and dispute resolution. In addition to his regular teaching responsibilities in the MBA and Ph.D. programs, he teaches numerous executive education and management seminars for many Central Ohio companies.

Roy is an author or editor of thirty­one books, and numerous research articles. He also has won more than a half dozen national and OSU awards for teaching excellence.

Prof. Lewicki was an organizer of the Conflict Management Division of the Academy of Management, and served as its first Chair in 1988. He held served on numerous editorial positions, including serving as the Founding Editor of the Academy of Management Learning and Education journal (2000­2004). He has held several positions in the International Association of Conflict Management and served as its President in 2000.

He has been active in the Council’s work for almost 20 years, and has served as Trustee of the Council for the past six years. His spouse, Debbie, is pastor at Groveport Presbyterian Church. Roy and Debbie have two married sons who live in Boston and New York.

A Message from the Executive Director 2005 was a wonderful experience for me. I joined the Council in January of last year to bring 2004 financials up to date, and never left. Over the past year we have made great strides in regaining our footing in the community as well as bringing our members back into the Council’s great missions. Some of the highlights include launching the LunchBreak Speaker Series, improving our reservation process by joining an online registration system, and reviving the Ethics and Compliance Officers Forum. We also enjoyed another very successful Laws of Life Essay contest which we co­sponsor with Ohio Partners in Character Education

I am equally excited about 2006. This year will bring many more exciting programs in the LunchBreak Speaker Series. In the upcoming months we will welcome David Freel from the Ohio Ethics Commission, Stephen Young from the Caux Roundtable and Gary Zeune of TheProsandCons. In June, we will return to our original timeframe for the Annual meeting with an evening of celebration at the Kelton House. Since you are reading this message, you are already enjoying our redesigned email newsletter. Look for it quarterly in your email mailbox. In addition, take time to explore our new website. I hope the new features, navigation, and look of the revised website provide you a valuable resource. Visit us frequently for the top social responsibility news stories of the day as well as features on member companies, interesting articles, and up to date information on all of our upcoming programs

Many of us see 2005 as the year of rebirth for the Council. As for 2006, we see it as our year to grow into an even stronger Council supporting our surrounding community. Join us in this exciting effort!

Lisa K. Mueller

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Council for Ethics in Economics

Meet the Council Staff The Council Staff consists of the President, Mike Distelhorst, Executive Director, Lisa Mueller, and Ohio Partners in Character Education Director Lucy Frontera (sitting). Mike Distelhorst is a Law Professor at Capital

University and has been involved with the Council for many years. Lucy Frontera joined the Council in 1999 when we began working with a grant supporting character education. She organizes all of our programs in conjunction with the Ohio Department of education. Lisa Mueller joined the Council in 2005 as the Executive Director. She basically manages every aspect of the Council operations. She also teaches accounting courses at Franklin University.

February Lunchbreak Highlights

On February 22 nd the Council welcomed Bill Diffenderffer, CEO of Skybus Airlines. Bill is also the author of a new book on leadership titled The Samuari Leader­ Leading with the Courage, Integrity and Honor of the Samurai Code. Bill studied the interaction of leadership and execution, analysis and action, and values and performance. While in China and Japan, he discovered intriguing parallels between the needs of business leaders and the Samurai Way. During our event we learned how to control our fears that can overtake our

efforts at success. If you missed this event, you’ll have another opportunity to see Bill at our Laws of Life Essay Contest Winners Banquet in September.

March Lunchbreak Highlights

David Freel was our guest speaker at the March Lunchbreak program. David is the executive director of the Ohio Ethics Commission. He provided the group much insight into the laws around ethics in Ohio and how they apply not only to the public sector, but also the private sector. The Ohio Ethics Commission is a great resource for advice on any situation as to making the appropriate ethical decision which will

comply with Ohio law. The Commission can be reached at 614­466­7090 or you may email them at www.ethics.ohio.gov.

April Lunchbreak Highlights

Stephen Young, Global Director for the Caux Rountable joined the Council and OSU MBA students for a very interactive session on April 18 on the OSU campus. Capitalism has been studied for hundreds of years and along with capitalism, ethics and/or morality seem to be forever linked to the good/evil of making money. To learn more about the Caux Rountable or Stephen’s new book Moral Capitalism, Reconciling Private Interest with the Public Good visit Caux Round

Table.

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Council for Ethics in Economics

Featured Article continued from page 1 These steps include:

Ø Delivering training to internal business units on fraud indicators and what to do if fraud is suspected

Ø Placing our contact information on internal business unit web sites Ø Placing stories in company publications about our mission and

outcomes of our investigations

• Enlisting customers, vendors and third parties as tippers.

Because customers, vendors and other third parties may have valuable information to contribute, we are reaching out to them through our public web site, which will also have a reporting link. In the case of vendors, we ask for their help in a pamphlet delivered to them as part of the contracting process.

• Providing a confidential reporting mechanism.

Studies show that tipping is facilitated by a confidential reporting mechanism, so we are publishing the existing Office of Ethics help line number as the one number to use for internal fraud reporting. In addition to being confidential, no caller ID is used so that callers may choose to remain anonymous.

• Improving internal controls.

The most effective way to deal with fraud is to prevent it. Every fraud uncovered is a potential learning opportunity to improve internal controls. To ensure these opportunities are not lost, we meet every month with Internal Audits to review cases. We also regularly generate "lessons learned" memos to other business units based on cases we have worked.

• Doing pro­active fraud searches via internal data mining.

We recently staffed an analyst position to mine the company's internal databases for patterns that might indicate fraud. In the first month of operation, the analyst uncovered a $60,000 fraud. The analyst works closely with the investigators to develop system queries that have the highest probability of correlating to fraud.

• Partnering with other investigative business units.

In an organization as large as Nationwide's, other business units may have valuable information on possible internal fraud. These include such units as Corporate Security, Human Resources, and Compliance, to name a few. In addition to meeting with these units to share information, we are building a common database of investigation subjects to ensure relevant information is shared.

It has been our experience that most fraudsters are first­timers because the company's recruiting procedures weed out persons with prior criminal records or serious credit issues. In most cases, associates who have committed an internal fraud had one or more of the following personal characteristics:

­­Recent divorce or separation ­­Financial problems (bankruptcy, medical, etc.) ­­Life style didn't match income ­­Drug, alcohol or gambling problem ­­Took short or no vacations ­­Stayed late or arrived early ­­ Showed interest in other department functions

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Council for Ethics in Economics

­­Refused help ­­Had conflicts with other associates ­­Frequently complained about job/pay ­­Felt passed over for promotion, or otherwise entitled ­­Habits have changed

A substantiated case of internal fraud will result in termination of the associate's employment and referral of the case to law enforcement for prosecution. Unfortunately, due to public resource limitations, few cases are prosecuted. And without a criminal record, the fraudster may be successful at seeking employment at another organization where the fraud may be repeated.

In those cases that are prosecuted, we seek restitution orders. We also have asked associates to sign promissory notes and in some cases have filed civil actions to seek recovery of losses. Unfortunately, most fraudsters are not able to pay back the amounts taken, and civil litigation is seldom cost­beneficial. The company's fidelity bond provides protection against very large fraud losses, but most losses fall within the deductible. This lack of good recovery options makes it all the more important to prevent fraud from happening in the first place.

It is difficult to estimate how much is being lost through internal fraud. Fraud examiners have a saying: "If you don't look for it, you don't have it; if you look a little, you have a little; if you look a lot, you have lot." Our average internal fraud involves a scheme that has been active for three years and results in a loss of $20,000, although some losses have been much larger.

At Nationwide, we believe the vast majority of our associates are ethical and honest, and we won't tolerate those who aren't. Our goal is to eliminate internal fraud because it's the right thing to do­­for both our customers and our associates.

Interview continued from page 2

How is the topic of business ethics discussed within JPMorgan Chase?

First, let me first say that in my view, “business ethics” is a bit of a misnomer. Why should we categorize ethics into specialties? It seems to me that we should consider ethical behavior in all activities in society, so for example we ought to be discussing ethics and the application of ethical behavior in our schools, in our homes, and in our professions.

I think one of the examples of the application of “business ethics” within JPMorgan Chase has been in the area of client selection. We need to consider the type of clients we want to do business with. We should not place our bankers in the awkward position of having to deal with companies of questionable reputation. The reputation of many businesses today especially financial institutions is often linked to the types of customers we do business with. The financial services industry can be very influential in helping to eliminate activities that harm society as evidenced by the recent announcement by several large financial institutions, including ours, to join in efforts to deny money transfer services to child pornographers or child pornography rings.

What formal training occurs for employees on the topic of ethics?

We have a detailed code of ethics and every employee receives instructions on the code and its application. I also think another important aspect of our organization is recognizing the value of dialogue and the notion that it’s o.k to raise and debate issues. If people feel less afraid to raise issues and concerns, the organization has a much better chance of identifying and eliminating conduct or actions that can cause problems.

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Council for Ethics in Economics

Many people point to Enron and believe that the greed of top management in that company was a prime reason for the collapse. But we should remember that a many people in that organization, who were not making a lot of money, saw or did things of questionable practice. I think the pressure to produce profits or make the next quarter’s earnings target sometimes pushes people to make certain excuses for their behavior. People need to feel that they can question the transaction or the proposed action and ask the right questions about the deal.

How is the code of ethics reinforced within the organization?

We require an annual reaffirmation by each employee that they are in compliance with our code of ethics and that is a condition of continued employment. But we also recognize that the point of many decisions in our company is at the individual level. So we need to reinforce the values in the code in our daily interaction with our employees. We often discuss examples of positive outcomes or decisions made in recognition of the values of our company, and we also discuss incidents that may have had undesirable or unintended consequences so that we can learn together. We do not have per se “ethics” discussions but we hope to instill an atmosphere of trust, honesty and respect for each other in our conversations and actions.

Practicing a code of ethics or values has to be much more than holding a two day retreat, drafting a values or mission statement, and then passing out the statement to employees with no more discussion. Those types of statements tend to go into the desk or on the shelf without further notice. Employees need to see that the values of an organization are being applied and followed in actual practice.

What challenges arise in interpreting provisions of the code of ethics?

A code of ethics can never address all of the “gray” areas that arise in business. These are the areas or issues that require more discussion within the organization. Many of these situations raise questions such as who you are as a person, or how do you feel about taking a certain action? In our company, we often discuss potential transactions as a team and, for example, consider whether we have inadvertently or morally committed to a deal before completing all the required steps, or whether the customer may somehow be under the wrong impression about the conditions yet to be fulfilled. The only thing you really have is your professional reputation. People need to hear that so they can think through situations with that perspective.

What is your view on the relevance of business ethics today?

I think the past corporate scandals such as Enron, Worldcom, Adephia, and others have brought the practice of business ethics to the attention of the public. I think the fact that this topic has been raised and that more people are looking to see how business and business management operate is good for our society.

What changes have occurred in the delivery of financial services today as a result of business ethics issues?

A number of regulatory and legislative initiatives have substantially changed how our industry operates. The Patriot Act, for example, has placed increased responsibility on “know your customer” procedures and understanding who we are doing business with. There is also heightened awareness in identifying and alleviating potential conflicts of interest among multiple parties that may be involved in transactions. There is certainly much more emphasis on full disclosures and transparency of financial information. The Sarbanes Oxley legislation has also affected all public companies particularly in areas of corporate governance, and the reporting of financial information to the public.

Do see the need for further development of business ethics issues in the area of financial services products or your industry? If so, in what areas?

First, I don’t think that more laws or regulations are the best approach regarding

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Council for Ethics in Economics

business ethics issues. What is effective for ethical conduct in any organization is leadership and the willingness to engage in conversations with all employees about the values the organization believes in. I also think that it is well intended for business schools to offer courses on business ethics but we should also be expanding the teaching of ethics in general to other programs such as liberal arts colleges, computer technology courses, accounting and other disciplines. We need to introduce the study of ethics and the application of ethics in many other sectors of our society.

Thank you Melissa for taking time to share your views with us.