Morality in Organizations
A plethora of questions come to mind when thinking of the moral corporation. How did the economic crisis unfurl? The ethical community predates consumerism so how has consumerism managed to supersede business practitioners’ morals? What are the means to eliminate systematic lapses in ethical judgment? Such questions are valid and necessary for a much needed debate on morality in organizations.
With the instances of cyclical corporate wrong doing that led to regulation such as the Sarbanes-Oxley Act, Federal Sentencing Guidelines and the New York Stock Exchange governance, the rules are expected to positively influence corporate leadership. Such rules, when implemented aggressively, encourage corporate morality but moral sustainability is the measurement of the rules’ effectiveness.
Moral Actor View of Corporations
Some ethicists argue that bureaucratic structures aren’t human beings and therefore are incapable of reasoning. It is imperative to acknowledge that humans are the agents of corporate morality or unethical behaviors. Furthermore, corporations are glorified and penalized in the same manner as humans. Consider the moral actor view of the corporation:
It is the view that insofar as corporations act intentionally, they can be held morally responsible for their actions. They are moral actors. But because corporations are not ends in themselves, they are not moral persons. Hence the ends for which a corporation is established can be morally evaluated.
One limitation inherent in this discussion is the “all or nothing” or “black or white” nature of using moral or immoral. That is, not all moral acts are equal in the same way that not all immoral acts are equal. There are degrees of morality or immorality and the degrees vary among different stakeholders.
Sarbanes-Oxley Act
The Sarbanes-Oxley Act created an accounting oversight board that mandates corporations to establish financial reporting ethics codes and develop greater transparency in financial reports to investors and other interested parties.
Insider Trading Act
Insider trading is a form of corporate financial malfeasance. Corporate executives and shareholders owning 10 percent or more of a company stock are considered as insiders because of their access to privileged information before it’s publicized. The Securities Exchange Commission’s 1933 Insider Trading Act prohibits the buying or selling of shares, whether to make a profit or prevent a loss, based on privileged information. The Act’s objective is to protect smaller shareholders and eliminate unfair insider advantages. It strengthens public confidence and upholds the Commission’s integrity.
Environmental Stewardship
Community members are more environmentally conscious today and have a vested interest in the world. This consciousness presents business leaders with moral challenges beyond ethical financial reporting, employee saftey and competitive remuneration. In response, more corporations are increasingly "going green" by either encouraging recyling or adopting electronic business transaction methods.
Environmental stewardship is encrypted into what is deemed as "corporate ethical or moral conduct." An organization that lapses in displaying an interest in the community's well-being risks damaging its longevity.
Amory Lovins, the Rocky Mountain Institute's founder and chief scientist, at a December 2008, Harvard University presentation, offered ways in which corporations can save money while protecting the environment.
Federal Sentencing Guidelines Act
The Federal Sentencing Guidelines Act was established to protect consumers against companies who recklessly disregard the harm caused by their business activities to consumers and the community. The Act incentivizes, with lesser penalties, those corporations whose ethics programs are aggressive, adhered to and audited regularly.
The federal government and stakeholder groups’ moral demands on corporations must be applauded for compelling them to engage more in becoming moral participants of the socio-ecosystem.
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