Issue 31: February 2019
This edition of Setting the Example addresses the imperative for organisations to make a contribution to building a more ethical future, specifically via well designed ethics training to promote ethics conduct among their stakeholders. The issue of giving due recognition to ethical capital is the second lead article. This explores the argument in favour of ethical capital being adopted as a term to identify ethics as a core organisational asset and being categorised as an additional capital to the International Integrated Reporting Framework’s six capitals model. We note that Jeffrey Skilling, former Enron CEO, has been released from prison, and include a commentary on the Corruption Perceptions Index 2018.

Making a contribution to a more ethical future
Is your ethics training effective enough?

That the deluge of ethical scandals has kept South Africans captivated is a more than an unfortunate pun. While there has been a great deal of outrage at the serial greed, there is also the risk that the scale of the corruption can lead to complacency or, worse, that it can encourage lowest-common-denominator behaviour. The key question this should prompt for organisations is what they are doing to strengthen the country’s steps towards a more ethical future. Specifically, what are organisations doing to promote ethics among their stakeholders? Clearly, the answer should not be ‘nothing’. Read more…


Giving due recognition to ethical capital

An organisation that can claim ethical leadership and an ethical culture encompassing ethical conduct within the company and relative to its external stakeholder has clearly created something of great value. And that value warrants being accurately identified, not least because the benefits of clarification and focus support the pursuit of ethics. This value can best be described as ethical capital. Yet this is neither a widely adopted concept within organisations nor is it recognised in the six capitals model. Consider instead that ethical capital should be recognised as an asset that serves as a source of value for the organisation and its stakeholders Read more…


Former Enron CEO Jeffrey Skilling released from prison

Jeffrey Skilling, the former chief executive of Enron Corporation, was released from federal custody on Thursday 21 February 2019 after 12 years in prison on charges of fraud, conspiracy and insider trading. Having led the company to a dominant global energy company in the 1990s, Skilling in his role as CEO maintained a facade of success as Enron’s energy business imploded. In 2006 he was convicted for a complex fraud and conspiracy scheme that cost shareholders billions of dollars and its employees their retirement savings. The company’s collapse culminated in one of the largest corporate bankruptcies in American history on 2 December 2001. It also led to the dissolution of Arthur Andersen, one of the five largest audit and accountancy partnerships in the world. Skilling’s co-accused, Kenneth Lay, Enron’s founder and chairman, who was found guilty of fraud, conspiracy and bank fraud, died about a month after the trial.

Corruption Perceptions Index 2018
Since its inception in 1995, Transparency International’s Corruption Perceptions Index (CPI) has become a leading global indicator of public sector corruption.
The 2018 CPI surveyed 180 countries on a scale of 0 as highly corrupt to 100 as very clean.

Overall results reveal that anti-corruption efforts have stalled in most countries, and that more than two-thirds of countries scored below 50 (i.e. in the less ethical half of the scale), with an average score of only 43. The lowest scoring region was Sub-Saharan Africa (average score 32).

While South Africa’s score of 43 is not the worst in this region, being the ninth least corrupt country in the region is hardly an accolade. That our score has remained in the 43 to 45 range over the 2012 to 2018 period indicates that we have also not made any progress as regards public sector corruption.

Here’s hoping that current efforts have an impact and the 2019 CPI results reflect an improvement.

Ethics Reminder
A saying-doing gap between what is said or written (in values, codes and policies) and what is done – especially how leaders behave – is visible to all employees all of the time.

About Ethics Monitoring & Management Services (Pty) Ltd

Ethics Monitoring & Management Services is a niche business focused on workplace ethics. It offers practical tools and services to support the effective management of workplace ethics, to improve ethical conduct and to build an ethical culture. Our core service areas are reliable, quantitative ethics assessments; ethics training encompassing talks, ethics conversations, workshops and webinars; and ethics consulting on issues such as ethics strategy, standards and management systems.

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Contact us

Cynthia Schoeman
Managing Director
Ethics Monitoring & Management
Services (Pty) Ltd
011 447 7661; 082 821 3729

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