There’s No Such Thing As Business Ethics – Yea, Right – Ask Jeffrey Skilling!

November 15, 2007

I’ve heard that statement, “There’s no such thing as business ethics!” said way too many times.  The arguement is that businesses don’t have ethics – people do.  Therefore, there is no such thing as business ethics.

As a motivational speaker addressing corporations and associations on business ethics from coast to coast – my response is – Bull! 

If that is true (there is no such thing as business ethics) then the appeal by Enron CEO Jeffrey Skilling of his 24+ year prison sentence is doomed.  Seems that Skilling and his legal team are relying (in part) on the Fifth Circuit’s decision in U.S. v. Brown that limited the “right of honest services” theory when the defendant believes he or she is acting in the corporation’s best interest as defined by management.  In simple terms, if the corporate employee is acting in the corporations best interest or under the direction of management, then they can’t be guilt of “fraud”.

According the the White Collar Crime Prof Blog (    “The government argues that Brown does not apply because it is limited to lower-level employees and not a CEO who it describes as the leader of the fraud.  The problem with that argument, however, is that Brown does not seem to create a “CEO exception” to its analysis of the applicability of honest services fraud theory in a private setting in which the company is the victim of the fraud.”

There are numerous legal issues at play and not the prime subject of this blog.  Rather, in laymans terms…Skilling was found guilty of (simply put) unethical conduct – fraud, consispracy, etc.  Skilling was guilty because, as CEO, he acted in a manner that was unethical and costly to those who placed there confidence in he and Enron senior management. 

Personal ethics only…?  No such thing as business ethics?

Simply stated, looking at the complex legal arguements in Skilling’s appeal and the governments response – the arguement seems to strongly indicate that businesses have a legal existence and “soul.”   If I’m acting at the direction of management then the “honest services fraud theory” would apply.  Business ethics 101 as far as I can see.

After each Business Ethics keynote speech I give…there is at least one who just has to say that business ethics doesn’t exist.  I do understand where they are coming from.  Yet, most every business I encounter has a culture – a spirit if you will.  And, that spirit, soul or corporate culture is the foundation of that enterprises – business ethics.

Not only is there business ethics – but it is now, as best as I can see, becoming part of legal defense against fraud, etc.

Interesting.  Your opinion?