I've long believed that corporate ethics professionals in the United States have an important role to play in their companies' corporate responsibility activities. But my suspicion has been that, unlike their European counterparts, U.S. companies, for the most part, maintain a separation between their ethics and CR efforts.

A recent food industry benchmarking project completed by Ethical Leadership Group supports this conclusion. For the most part, the participating food companies that are based in the U.S. have devoted less attention to integrating these functions, though the ethics officers we spoke to for this study all indicated both an interest in, and a recognized need for greater integration.

Similar sentiments could be heard at the recent ECOA conference in Salt Lake City, where there appeared to be a growing recognition that protection of brand and goodwill -- the job of the ethics officer -- demands more than simply compliance with the Federal Sentencing Guidelines.

I recently wrote a piece that appears in the current (October 2006) issue of Ethical Corporation magazine in which I address this issue in somewhat greater length. Click here to download a PDF of this article. In this article, I make the case that convergence of ethics and CR in the United States is necessary for the creation within companies of true cultures of integrity. I think this convergence is occurring, slowly but surely.

Whether you agree or disagree that greater integration is inevitable and important, it can't hurt you to think about the degree to which your own company has addressed or is addressing this issue. And it can't hurt to ask yourself whether you want to be on the front edge of these developments, or chasing them.

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Many of you have probably read articles quoting Warren Buffet's memo on ethics and reputation to his top managers. For those of us in our field, the whole memo from the Oracle of Omaha is worth reading. Buffett identifies many of the rationalizations that otherwise good managers have succumbed to, and exhorts his team to resist them.

Memorandum

To: Berkshire Hathaway Managers (“The All-Stars”)

From: Warren E. Buffett

Date: September 27, 2006

The five most dangerous words in business may be “Everybody else is doing it.” A lot of banks and insurance companies have suffered earnings disasters after relying on that rationale.

Even worse have been the consequences from using that phrase to justify the morality of proposed actions. More than 100 companies so far have been drawn into the stock option backdating scandal and the number is sure to go higher. My guess is that a great many of the people involved would not have behaved in the manner they did except for the fact that they felt others were doing so as well. The same goes for all of the accounting gimmicks to manipulate earnings – and deceive investors – that has taken place in recent years.

You would have been happy to have as an executor of your will or your son-in-law most of the people who engaged in these ill-conceived activities. But somewhere along the line they picked up the notion – perhaps suggested to them by their auditor or consultant – that a number of well-respected managers were engaging in such practices and therefore it must be OK to do so. It’s a seductive argument.

But it couldn’t be more wrong. In fact, every time you hear the phrase “Everybody else is doing it” it should raise a huge red flag. Why would somebody offer such a rationale for an act if there were a good reason available? Clearly the advocate harbors at least a small doubt about the act if he utilizes this verbal crutch.

So, at Berkshire, let’s start with what is legal, but always go on to what we would feel comfortable about being printed on the front page of our local paper, and never proceed forward simply on the basis of the fact that other people are doing it.

A final note: Somebody is doing something today at Berkshire that you and I would be unhappy about if we knew of it. That’s inevitable: We now employ well over 200,000 people and the chances of that number getting through the day without any bad behavior occurring is nil. But we can have a huge effect in minimizing such activities by jumping on anything immediately when there is the slightest odor of impropriety. Your attitude on such matters, expressed by behavior as well as words, will be the most important factor in how the culture of your business develops. And culture, more than rule books, determines how an organization behaves.

Thanks for your help on this. Berkshire’s reputation is in your hands.

(end of memo)

Not a bad message.

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All the ink that's been spilled during the past month over the H-P scandal has caused many people inside and outside of the ethics profession to scratch their heads over many things. One of the big head-scratchers revolves around the concept of "pretexting." This concept was new to me, as I'm sure it was to most of you.

Its emergence caused me to wonder, first off, what this word could possibly mean and, more importantly, why it was created. This, in turn, inspired me to write an article that was recently published in Ethical Corporation Magazine's web newsletter. You may find the article interesting or thought-provoking or infuriating or all of the above. Here's the link. Look it over if you have a moment, and let me know what you think.

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