The article by P. Henning “When Money Gets in the Way of Corporate Ethics” reviews the examples of professional misconduct and breaking ethical regulations by financial officers and accountants. Analysis is made on the major case of the Wells Fargo report which proved numerous misdeeds were made by the low-level employees and the management of the bank.
Being wrong and inadequate, the policy of the bank and sales targets set by the management, made the low-level employees contravene the legislation and demonstrate unethical and improper behavior. Trying to reach the unreasonably high sales targets, managers found no other solution, but to use confidential personal data of the clients to open bogus accounts. The managers never thought of the reputational risk they are facing, as there was no other way to complete the goal except for cheating the sales results.
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"When Money Gets in the Way of Corporate Ethics".
Obviously, the blame for these cases of misconduct should be placed both on the leaders of the bank division, who allowed such misconduct and in a way extorted the manager to do it by setting unreasonably high sales rates, and on the low-level manager who actually made the fraud. Due to the fact, that the straight involvement of the bank leaders into the actual misconduct is hard to prove, most of the blame would be shifted to the managers who actually neglected the ethical norms and corporate culture.
The case of the Wells Fargo bank is one out of many, but it is an outstanding and strong example of how unethical behavior could damage corporate reputation. In other words, the hard-gained reputation, earned by the years of efficient work, was lost just in five minutes, after the fact of unethical behavior was shown in the report on Wells Fargo. Lots of effort and investment would be required to reestablish reputation and to improve it to the before-the-scandal level.
Actually, exposure of the unethical behavior of corporate employees happens on more or less regular basis, and the facts of misconduct could leak out through social media, videos or word of mouth. Among the recent unethical behavior scandals was the United Airlines’ case, when a passenger was forced out of the plane. Reaction of the company to breaking its own rules and common ethics was ridiculous: management considered the passenger liable for his unwillingness to leave the plane. It is not the only case, but common practice for corporate management to protect their company’s good name and to put all guilt, if any, on the employees who were immediate performing the misdeed.
As for unethical behavior of the white-collars, the examples of their misconduct should come to light, and they should be prosecuted together with heads of their divisions or, in major cases like neglecting the clients’ confidentiality issues and privacy regulations to open bogus accounts, the corporate management should also be held liable, as nothing could be done without their silent approval.
It is obvious, that every financial officer or accountant each day faces ethical challenges: this could be what side of intracompany conflict to take, some business decisions, or what corporate strategies to follow etc. Companies should provide trainings or corporate education, and regular reminders on importance of keeping to the code of ethics. It is also important to fill in the gaps in the awareness of employees about the potential liability for breaking the ethical performance. In the countries with the emerging economies the possibility of unethical behavior is more apparent compared to the countries with the developed economy, because they are under bigger pressure for achieving the required results.
It is crucial that accountant keeps the secrecy and confidentiality. Besides, one of the most common issues among the accountants is corruption, which is unacceptable. Anti-bribery legislation should be improved and the offenders (taker, giver and those who knew about the fact of corruption, but didn’t blow the whistle) should be prosecuted.
To conclude, ethical dilemmas that accountants and financial officers face globally are mostly as follows: employers are pressured by the superiors into unethical behavior for achieving targets, confidentiality issues and disclosure of information (personal or professional), not blowing the whistle in case of awareness about illegal actions taking place (breaking legislation and the code of ethics) etc. In order not to get into unethical situations, accountants should comprehend the basic principles of behavior and of the professional code of ethics, and consider legal consequences for breaking any of them. Being and accountant equals safeguarding the public and the clients’ interests, and to succeed accountant needs to ignore all threats, simply keeping up with the ethical standards of professional performance.
