It’s not the economy, Stupid!
 

Washington D.C. (July 10, 2002) The economy is OK.  It’s business that’s bad.  And, business is bad to the bone. Or at least, that’s what people are saying.

From radio talk shows to everyday conversations at Starbucks, the buzz is that American business leaders are greedy, self-centered and unethical.  Folks are not only assuming that the malefactors are at fault, but that their professional advisors and governmental watchdog agencies must be involved as well. Through this litany of misrepresentative accounting, insider trading, overstated earnings, the destruction of critical documents and questionable payouts to company executives, people everywhere are asking “who can you trust?”. 

Intuitively, most people know that the scandals reflect the actions of a few individuals and are not representative of all businesses.  But emotionally, the magnitude of the errors found and the names of the business involved have contributed to much of American business getting painted with the same broad brush of mistrust.

In the final analysis, it is the character of the individual business leader and their personal sense of propriety that will guide their actions.  However, many companies have institutionalized the type of character they want to display by creating Corporate Codes of Conduct and establishing procedures for the regular and confidential reporting of acts viewed as questionable.  These codes are published and are available to the public.

The best of these codes not only “talk the talk.” These companies also have their employees annually provide signed written statements about their actions and those they may have witnessed. They also “walk the walk” of corporate responsibility.  Companies who have well-defined and well-enforced corporate codes of conduct enhance the trust customers, investors and employees have in the firm and its leaders.  While it can be argued that a code, in and of itself, cannot eliminate the risk of wrongdoing, its very existence mitigates that risk by creating a standard against which it is willing to be judged.

Just as all businesses do not have codes of corporate conduct, not all professional organizations have Codes of Ethics.  Those who do have codes, regularly review them, train their members and hold the members of the organization to uphold them. They also enhance the level of trust in which their clients hold their members.  An active and vital ethical code adhered to and practiced by the members of that professional society, like corporate codes of conduct, does not eliminate the risk of unethical practices, but it does provide both the yardstick and procedures for dealing with offenders.  Again, the very existence and willingness of individuals to sign and live by it, creates an atmosphere of proper professional conduct that contributes to client confidence.

Among these types of professionals, the Institute of Management Consultants USA (IMC USA), the national professional association representing management consultants has always promoted a Code of Ethics.  Since 1968, each and every member of IMC-USA has accepted, in writing, to abide by the Institute’s Code of Ethics.  This code governs business and professional conduct, and establishes standards for consulting integrity, competency, objectivity and independence.  CMC (Certified Management Consultant) is a certification mark awarded by the IMC USA, and represents evidence of the highest standards of consulting and adherence to the ethical canons of the profession.

IMC USA is a member of the International Council of Management Consulting Institutes, representing institutes of management consultants in 32 countries. An international Code of Ethics and Independence bind the 25,000 consultants who are members of these institutes. Over 10,000 of these members have also passed the CMC examinations in their countries.

So the answer to “who do you trust?”, while difficult, can be successfully addressed:  You trust those who are trustworthy and show it through their policies and actions.  As investors, consumers and clients of professional services seek the feeling of confidence in those with whom they deal, they will gravitate to business and professional organizations they feel they can trust.  Resultantly, more business will gravitate to the implementation of codes of corporate conduct, and business leaders will again realize that high standards of conduct and strong ethics are good business.