October 4, 2005
Good Corporate Ethics Not Enough, Public Recognition Also Needed
by Kate McCann

Bob Bunting, chairman of the American Institute of Certified Public Accountants board of directors, wants the business world to “make the grade” ethically. To achieve this goal, he believes companies need to center their corporate philosophies around a pillar of strong values and make their good intentions known to the public.

Companies should base good business practices on values that both pervade the company’s culture and are known to the public—even if talking about them feels uncomfortable. “Values and ethics are dangerous for anyone to talk about,” Bunting said during his Sept. 28 Lyceum Speaker Series talk. “With ethics you are assumed to be putting yourself out there as an expert, or as having led an ethically superior life.”

Bunting’s own ethical expertise comes from his experience as the former chairman and CEO of Moss Adams LLP, an accounting and consulting firm based in Seattle. “Everyone has to experience the day-to-day ethical dilemmas,” he said. “The only difference between me and you is that I have a 35-year head start.”

In the wake of so many recent corporate scandals, paying attention to ethics pays off both in the court of public opinion, but also in avoiding encounters with the legal system, Bunting said. He recommends that companies should invest in an outside chief ethics officer to maintain accountability. When Moss-Adams hired one, large corporations like Starbucks responded by saying, “We should hire those guys.”

But it’s not enough for executives simply to act ethically—publicity for good ethical behavior can be as beneficial to a company as negative press for bad behavior can be damaging. According to Bunting, the CEO is the first person fired when a company undergoes ethical or legal trouble. For the rehiring process, the company will seek a candidate with a clean record, “the most valued commodity in management.”

Bunting presented four corrosives to ethics. Whether a company effectively uses “spin, speed, stuff and society” can either constitute or corrode values. Spin—the ability for a company to put a better light on things when under criticism—is the most commonly used. Speed comes into play when instant decisions are made. Bunting identified the Martha Stewart case as a key example: if Stewart had taken the time to consider the penalties for insider trading, he said, she would not have risked acting on the tip.

Stuff goes back to a person’s materialistic root, the competitive instinct that drives people to “keep up with the Joneses” by accumulating bigger and better versions of the neighbors’ stuff. Society is the influence on personal and professional values, recognizing that the values of your crowd, good or bad, will undoubtedly rub off on you.

Bunting challenged the CPAs and students in the room to carefully consider a work environment before entering it, measuring up the company’s values to personal ones. “Consider what the CEO talks about; it strongly reflects the values of the company,” he said. “Does he solely talk about revenue? Does he talk about integrity?”

Accountants have the responsibility to uphold good ethics, he said, which will be a day-to-day battle. “You never really graduate from this class on ethics and values, you can always get your grade up.”