ethikos: Examining ethical issues in business since 1987

An Historical Perspective

When the first issue of Ethikos appeared almost two decades ago, the cost of committing a corporate crime was, on average, $54,000. By 1990, however, the climate was changing. An oil spill that found its way into the Monongahela River cost Ashland Oil $2.5 million, and under a new set of federal sentencing guidelines that became law just a year later, the fines could have amounted to between $30 million and $50 million. In publishing this reportage, Ethikos was not trying to tell its readers to establish some kind of defensive system to protect their cash position. The purpose was to demonstrate the value of raising ethical levels throughout the corporate structure—from the executive suite to the mid-management sector and the work floor as well.

In earlier times, Ethikos discussed many of the ramifications of a continuing discussion about whether or not proper ethical conduct could improve company profitability. In doing so it set forth the views of Milton Friedman in the "Self-Interest Model of Business Ethics," who argued that the corporate responsibility was simply to return a profit.

It followed up with part of a transcript of a debate between T. Boone Pickens and James Burke of Johnson & Johnson about where the company shareholders ranked in importance. To Pickens: First. To Burke: Last.

There was coverage of the hotline set up by the National Association of Accountants—to offer guidance to its 100,000 members who work within businesses as controllers or budget officers. There queries were and still are familiar: A business owner modernizes his personal residence and orders his accountant to put the cost on the company's books. Another makes a business trip and takes friends along at company expense. A positive sign back then noted that companies were reporting huge write-offs that in earlier times firms had once tried to hide.

There were interviews with prominent executives commenting on their personal experiences with the problems of facilitating payments, the acceptance of gifts and favors and the giving as well. DuPont pegged the limit of both at $25.

In its very first issue, Ethikos sought opinions from a number of teachers in graduate schools of business throughout the country. (See Ethical Education of an MBA.) This came in the wake of a $30 million gift from John Shad, a former chairman of the SEC to support a program on ethics at Harvard Business School. Having donated most of the money, he gave his reasons. Among them: "I've been very disturbed recently with the large numbers of graduates of leading business schools who have become convicted felons."

Ethikos makes no claim to prescience. Still, familiarity with the complexities of the past does help to focus on the problems and concerns of the future. Ethikos aims to present them with clarity and timeliness.

Loren A. Singer