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Thomas Kostigen's Ethics Monitor
Dec. 31, 2010, 12:01 a.m. EST
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By Thomas Kostigen
SANTA MONICA, Calif. (MarketWatch) "” In the wake of ethical scandals the likes of which the business world has never seen, chief executives should take an oath to do good.
I am not suggesting these executives take an oath to themselves, silently, within their own minds for only their consciences. I propose for 2011 and years beyond that corporate executives who have a responsibility to employees, shareholders and customers, as well as society at large, take a public oath to conduct themselves and their businesses in a good and proper manner.
The U.S. Coast Guard seizes tens of millions of dollars'worth on worth of cocaine off the coast of Colon, Panama in a huge drug bust. Video courtesy of Fox News.
There is such an oath, by the way. It was devised by the World Economic Forum's Young Global Leaders. The WEF is the organization that puts on the annual summit in Davos, Switzerland. There, the elite of the business world meet to share and discuss new ideas.
The WEF Young Global Leaders came up with the oath in response to the "global financial crisis of 2008 and the ensuing economic recession [that] has brought under question the character and trustworthiness of business managers around the world."
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"Unlike other professions, such as medicine or law, which explicitly recognize a commitment to serving the greater good and formally espouse a strict code of conduct," according to the young leaders, "management is yet to do either. Widespread views of management often subordinate business contributions to the greater good to the maximization of short-term financial returns, and emphasize a narrow view of managerial responsibilities as serving the interest of shareholders over clients, employees, or society at large. These views misrepresent the full complexity of the management profession and its role in driving global prosperity and, as we have painfully learned, can have disastrous economic consequences when taken to the extreme."
To be sure, chief executives have an implicit fiduciary responsibility to act in the best interest of the company. But what about the external effects of their actions?
This is the area the oath would cover.
The young leaders say their aim was to create a "Hippocratic Oath of Business" that spells out a commitment to "doing no harm" throughout the practice of management.
The oath doesn't come with legal consequences. It begs moral certitude.
At this time, when the largest dichotomy exists between CEO pay and employee salary, when bonuses to the few come at the expense of the many, and when society is saddled with the ills of greed gone mad, an overt code of ethics in the form of an oath would at least impress the words, if not the actions, upon executives. An expressed standard to which they could be held would be in the public record.
About 400 corporate chief executives have taken the oath to date. They have pledged to do good. See their pledges here.
As the new year and the next Davos approach, a new effort should be made to expand the Global Business Oath and expand the list of those executives who have pledged to abide by it.
Such a campaign could set a different tone for the next decade of the 21st century. May it be more ethical than the first. View the full Global Business Oath.
Thomas Kostigen has been a columnist for MarketWatch since 2000. He is a New York Times bestselling author. His books include "The Green Blue Book: The Simple Water Savings Guide to Everything in Your Life" (Rodale), "You Are Here: Exposing the Vital Link Between What We Do and What That Does to Our Planet" (HarperOne), and "The Green Book: The Everyday Guide to Saving the Planet One Simple Step at a Time" (Crown/Three Rivers Press).
At last, there looks to be some movement over at BJ's Wholesale Club, and that should make investors happy, writes Angela Moore.
10:06 a.m. Dec. 29, 2010
"Here's to more ethical business practices http://on.mktw.net/h5DoSo" 12:29 a.m. EST, Dec. 31, 2010 from MktwKostigen
"Science and politics don't need more mixing http://on.mktw.net/eOWSrH" 12:29 a.m. EST, Dec. 17, 2010 from MktwKostigen
"We can't afford to ignore food safety http://on.mktw.net/ejn5AV" 12:25 a.m. EST, Dec. 3, 2010 from MktwKostigen
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