The Seven Signs of Ethical Collapse- Taking Action That Can Stop

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  The Seven Signs of Ethical Collapse:
  Taking Action that Can Stop the
  Inexorable March
  By Marianne M. Jennings, J.D.

  Introduction                                             Boesky, Milken, junk bonds, and insider                  causation and ask: Are we doing all we
  We don’t look at embezzlement by                         trading in the 1980s. We put many in                     can do to prevent and contain ethical and
  company officers and exclaim, “Wow,                       prison, reformed the laws, and swore,                    legal lapses?3 About the time Martha
  kind of a gray area. I might have missed                 “Never more!” Then we rolled into the                    Stewart fell by the wayside, a reporter,
  that.” Nor do we learn of the multi-                     1990s and hit savings and loans scandals                 frustrated with scandal after scandal
  billion-dollar backdating of options that                with the fraudulent appraisals, the self-                at that time, asked me, “What is the
  benefited officers, many in the healthcare                 dealing, and financial collapses. We put                  difference between you and me and a
  industry, and think, “Kind of nuanced. I                 many more in prison, reformed more                       Martha Stewart or a Jeffrey Skilling, or
  might not have seen that coming.” The                    laws, and swore again, in our best Edgar                 Bernie Ebbers?” My response of, “Not
  more likely declarative in both cases is,                Allen Poe fashion, “Never more.” Yet                     much!” offended her. She said that she
  “Where were their minds and what were                    here we are, six years out from Enron,                   refused to believe she was anything like
  they thinking?”                                          WorldCom, Adelphia, and Tyco, and, just                  these corrupt souls. “Therein,” I explained,
                                                           in healthcare, we see too many slips into                “lies your greatest risk.”
  Pick any scandal and you will find                        the murky waters of fraud, penalties, and
  employees, managers, and officers who                                                                              Nobody wakes up one day and exclaims,
                                                           corporate integrity agreements.
  saw the ethical and legal issues evolving                                                                         “Medicare fraud–this is the way I am
  and erupting, but somehow did nothing                    Perhaps “What were they thinking?” is                    going to be wealthy beyond my dreams!”
  or could not make headway in their                       the wrong question. The more helpful                     We begin with a little upcoding and some
  flawed cultures when they raised their                    question, and one that has an answer                     outliers here and there; and then, through
  concerns. At Enron, for example, David                   is, “How did this happen?” Judge                         pattern, practice, and increasing comfort
  Delainey, the head of Enron Energy                       Stanley Sporkin’s profound insight                       with a moving line, ease our way into
  Services, said that at one point in a                    from the savings and loan trials comes                   federal investigation territory. The bad
  management meeting they made the                         back to haunt us, “Where were these                      news is that we are all vulnerable. The
  decision to change a $200 million loss                   professionals...when these clearly                       good news is that our vulnerability can
  for the company into a $12 million profit                 improper transactions were being                         be contained, restrained, and curbed. And
  by transferring reserves from another                    consummated? Why didn’t any of them                      there is even better news: all these checks
  subsidiary. He said, “That was the worst                 speak up or disassociate themselves                      and balances come fairly easily if we can
  conduct I had ever been a part of and                    from the transactions?”2 Ironically, Judge               just get over the initial resistance of ethical
  everybody knew exactly what was going                    Sporkin is now working with British                      indignation.
  on at that meeting.”1                                    Petroleum to help it understand what
                                                                                                                    Long before the Justice Department
                                                           went wrong at a company that has
                                                                                                                    comes calling, there are definitive signs of
                                                           experienced a refinery explosion, a burst
                                                                                                                    ethical slippage, seven to be exact. Ethics
                                                           major pipeline, questions about its energy
                                                                                                                    codes, ethics training, ethics hotlines,
            The more helpful                               traders cornering the market, and the
                                                                                                                    and other checklist processes have long
                                                           veracity of its former CEO.
            question is, “How                                                                                       been part of the healthcare industry.
                                                           Bad folks make their way into companies.                 These systems with their checklist
            did this happen?”                              And good people can turn bad. But                        and dashboard natures are well under
                                                           neither can make much headway in a                       control. Spotting the seven signs and
                                                           culture with the right checks and balances,              implementing their antidotes are the next
  Adding to the obvious nature and                         the antidotes to ethical collapse. With                  big step for ensuring an ethical culture.
  knowledge of the missteps is the historical              stock options backdating and billion-                    However, this refinement is more like a
  perspective that we have been down                       dollar settlements just in the healthcare                giant leap because of the introspective
  the ethical collapse path before. We had                 industry, we have to look beyond rogue                   effort they require.

    Alexei Barrionuevo, “Ex-Enron Official Insists Chief Knew He Was Lying,” New York Times, March 2, 2006, p. C3.
    Lincoln Sav. & Loan Ass’n v. Wall, 743 F. Supp. 901, at 920 (D.C.Cir.1990).
    By way of disclosure, Professor Jennings has worked with Tenet since its settlement agreement was announced in providing training materials for employees.

Fall 2007                                                   Association of Healthcare Internal Auditors                                          New Perspectives 21
     Sign #1: Pressure to Meet Those                           tasted 300%. The CEO commented that                    managers and executives discuss meeting
     Numbers                                                   his biggest challenge was convincing                   the numbers. Consider these mottos,
                                                               executives, managers, and employees that               adopted with all good intentions, by
     All organizations, whether profit,
                                                               they could not have a 2006 repeat because              companies:
     nonprofit, government, or public
                                                               it was an act of God that had befallen                   • “Find a way.”
     sector, have goals, numbers that
     they have established as targets. Pay,                                                                             • “Whatever it takes.”
     perks, promotions, and all forms of                       And numbers pressure is not limited
     incentive systems are tied to those goals                 to for-profit organizations. We have                      • “Sharpen your pencil.”
     and targets. Incentive programs are                       seen ethical collapses at NASA, Orange                 They seem innocuous, but then recall
     marvelous; they work. While there is                      County, and San Diego County as                        how many times managers and
     always a certain tension and pressure                     government employees struggled to                      company leaders have spelled-out
     between meeting numbers and doing                         meet budgets or timelines or just provide              lines that employees should not cross
     the right thing, a company headed                         PR fodder. Nonprofits such as Baptist                   in doing whatever it takes or finding a
     toward ethical collapse has made                          Foundation and United Way brought us                   way to reach numbers. Even “Sharpen
     meeting numbers the only goal, indeed                     much good but also two of the greatest                 your pencil” can become an unwitting
     the only virtue worthy of recognition in                  fraud stories of our time. Numbers                     imprimatur for fraud.
     the organization. This form of numbers                    pressure is an equal opportunity effect; all
                                                                                                                      There is a legendary story in the
     pressure has crossed into a zone of                       types of organizations are vulnerable.
                                                                                                                      nuclear industry about a plant being
     perversity. Meeting numbers is neither                                                                           shut down (unplanned) on a Friday
     strategy nor a sustainable competitive                    Antidotes for Pressure
                                                                                                                      afternoon. The news to management
     model. Meeting numbers quickly becomes                    The too-trite response to numbers                      was not good–a three-week outage. For
     a superficial exercise when how we made                    pressure is that the market (legislators,              a power company, that is no cash flow
     the numbers or whether the numbers are                    fundraisers) is unforgiving and folks                  for three weeks because a plant that
     real are peripheral questions.                            just respond accordingly. The reality                  doesn’t produce electricity can’t sell
     At HealthSouth, for example, its last                     of the pressure is a rationalization,                  electricity. A CEO went home worried
     annual report before all the indictments                  not a justification for crossing ethical                and crestfallen that Friday evening. The
     and the multi-billion restatement bragged                 lines. Market pressure has always                      following Monday he had a call from
     that it had met earnings predictions to-                  been there; the use of deception to                    the plant manager who explained that
     the-penny for 47 quarters in a row. When                  counter it has not. Fraud is not a natural             instead of three weeks, the plant would
     the SEC released its 2004 report on the                   market correction. As philosopher                      be shut down for three days only. Most
     areas in financial reporting that are most                 Michael Novak has written, we make                     CEOs would have issued a “Yeehaw!”
     susceptible to fraud, it concluded that                   choices for ourselves. Therein lies the                commended the manager, and moved
     revenue recognition issues were the most                  antidote for pressure: help employees                  on to 8-D disclosures and more promises
     common form of numbers manipulation                       to understand that the numbers and                     on numbers. Yet this CEO, in an act of
     with postponement or misclassification of                  getting ahead must come from superior                  cultural symbolism that continues to set
     expenses being the second.4                               skill, foresight, and industry, to borrow              the tone for the company years later, told
     In companies marching toward ethical                      a phrase from antitrust law. Helping                   the plant manager that he was coming to
     collapse, the employees and officers                       employees distinguish between numbers                  the plant, “I’m happy, but I just want to
     had tasted double-digit returns and                       achievement that comes from harder                     be sure you’re not doing anything stupid
     it was almost as if they had ingested                     work, better customer service, or product              to get this done.” Cultural symbolism
     heroine. There was no turning back; they                  and service intervention, or just the                  comes in encasing goals, incentives,
                                                                                                                      targets, and pressures in a box; a box
                                                                                                                      made of lines the organization does
                                                                                                                      not cross to achieve results. Each time
                                                                                                                      management touts a goal it would not
                      A company headed toward ethical collapse has made
                                                                                                                      be bad advice to add, as one CEO of a
                                meeting numbers the only goal.                                                        company that has never been in trouble
                                                                                                                      used to tell his employees, “And don’t
                                                                                                                      do anything stupid to get there.”

                                                                                                                      Sign #2 -- Fear and Silence
     were hooked on being a phenomenal                         serendipity of insight and foresight and               In the companies that crashed and burned
     performer. A CEO of a chain of stores in                  numbers at the expense of safety, truth, or            ethically, dissent was not an option.
     the southeastern United States explained                  viability is critical.                                 Employees said nothing because they
     that after Hurricane Katrina hit New                      I have never heard nor studied a CEO                   were so oppressed or, worse, if they raised
     Orleans, the population of that city shifted              (Richard Scrushy of HealthSouth may                    their concerns, they were terminated,
     to the north, east, and west of Louisiana.                be the exception) who told employees to                demoted, or just flat-lined in the company.
     The result was that his stores experienced                ignore safety, law, accounting principles,             These were “no bad news” companies.
     a 300% increase in revenues for 2005. With                etc. and just meet the numbers. Culture                As my friend Steve Priest, the head of the
     bonus and incentive plans throughout                      comes from symbols. Think how many                     Ethical Leadership Group, has heard in
     the multi-store chain, the employees had                  times each day, week, and month,                       his interviews with employees in troubled

         “Report Pursuant to Section 704 of the Sarbanes-Oxley Act of 2002,”

22        New Perspectives                                     Association of Healthcare Internal Auditors                                              Fall 2007
  companies, their reticence in a culture                    Wal-Mart’s CEO made a video for all                         of WorldCom’s double-digit returns,
  of ethical collapse is metaphorically                      employees in which he pleaded with them                     Michael Keith, the head of the business
  explained, “The first whale to the surface                  to come forward if they see anyone in the                   services division, was replaced after
  always gets harpooned.”                                    company do anything wrong, even if it                       just nine months on the job because he
  Diana Henze, who was a vice president                      turned out to be Lee Scott. The problem                     could not match WorldCom’s profit
  for finance at HealthSouth, refused to                      is that the termination of the employee                     margins. When Mr. Keith told C. Michael
  certify HealthSouth’s financial statements                  sends a different signal. Wal-Mart has                      Armstrong, CEO of AT&T, that those
  in 1999, because the numbers had been                      long said the employee was terminated                       margins were just not possible, he was
  changed so many times and she suspected                    for other reasons. Even if Wal-Mart is                      removed from his position.7
  fraud. Ms. Henze’s punishment was that                     absolutely correct about the employee, the                  Sometimes icon and sycophants are a
  she was passed over for a promotion                        signal fuels employee fears.                                family affair. With Charles Keating at
  that had been hers. When a less qualified                   Until an organization protects and, dare I                  Lincoln Savings and Loan, the iconic CEO
  person got the job, she confronted CFO                     say, rewards employees for speaking up                      surrounded himself with direct reports
  Owens and he responded, “You have                          about ethical issues, the culture carries a                 who were a full generation younger than
  made it clear that you won’t do what we                    certain “None of that here” signal. Some                    he was. This story would repeat itself
  ask.”5                                                     one-on-one discussions with employees to                    with Adelphia. Icons don’t get much
  About half of all employees who have                       get their real feelings about the company                   larger than John Rigas.
  seen a legal or ethical issue at work                      may be needed. And you may have to                          In other companies, while the young ‘uns
  would say nothing. KPMG‘s survey (an                       revisit a few disciplinary actions and                      were not family, they were young ‘uns.
  excellent study that queries employees                     terminations to find out whether they                        These young ‘uns don’t have enough
                                                             were guises for retaliation.                                experience or wisdom to challenge the
                                                             The third and final antidote is practically                  CEO, and the CEO has roped them
                                                             nonexistent because it requires that ethical                in with the trappings of executive
            Employees see the                                behavior be a part of annual performance                    success. They are hooked on the cash, its
            issues, but the fear                             reviews. One company has a 10%                              trappings, and their titles. They fail to
             and silence make                                weight on employee annual reviews for                       realize that they play the role of “useful
                                                             “forthrightness.” Employees must give at                    idiots” for a diabolical CEO. Former Tyco
               them reticent.                                least one example of how they behaved                       CEO Dennis Kozlowski was asked in 2001
                                                             forthrightly with a customer, a fellow                      how he chose his executive team and his
                                                             employee, or investor during the past                       response was a classic iconic one, “I hire
                                                             year. GE rewards employees who speak                        them just like me: smart, young, wants to be
  across industries and at all levels of their               up and do the right thing, even when                        rich.”8
  organizations) in 2000 (pre-Enron and                      there is a temporary cost to the company.
  other scandals) and 2006 reveal the same                   Pepsi gives a Chairman’s Award (which                       Antidotes for the Iconic CEO and
  data: Three-fourths of the employees have                  includes stock) to employees who                            Young ‘Uns
  seen a high level of illegal or unethical                  demonstrate ethical values and choices.6                    The dull and plodding CEO should enjoy
  conduct at work in the past year. We are                   Positive rewards are symbols–“speak up”                     a resurgence. Hire and keep a CEO who
  at the same level as we were pre-scandals.                 is their message to employees.                              spends his or her time at the company
  Employees see the issues, but the fear and                                                                             with the employees, not on stage, screen,
  silence make them reticent.                                Sign # 3 – Young ‘Uns and a Bigger-
                                                                                                                         and television. Wendelin Wiedeking,
                                                             Than-Life CEO                                               the CEO of Porsche, has, over a 12-year
  Antidotes for Fear and Silence
                                                             This two-part factor works in tandem                        period, turned that company around in
  There are three antidotes for the culture of               with fear and silence for an exponential                    everything from production efficiency to
  fear and silence. The first one is the easiest              boost. Iconic CEOs, who are adored by                       vehicle design. Porsche is on a roll, as it
  step and oodles of consultants await to                    community, analysts, and media, right                       were, with increasing sales, popularity in
  help you implement hotlines, third-party                   down to People magazine, are difficult to                    the marketplace, quality in production,
  reporting systems, and tracking programs                   question, let alone challenge. Because of                   and reduced costs in the factory. He got
  for what employees report. However,                        the adoration and accolades, employees                      the company to this point by spending
  a state-of-the-art reporting system is                     are hesitant to bring up those little                       a great deal of time with employees on
  meaningless if your culture is oppressive.                 accounting problems like $11 billion in                     the factory floor. “I’ve got friends in the
  Enter the second antidote: Beware of                       capitalized ordinary expenses.                              factory,” is this antidote.9
  decisions and actions that contradict                      Part two of this sign is that the iconic CEO                Another antidote is questioning the
  your desire for employees to speak up                      surrounds himself with a sycophantic                        icon. Media deference to the rock-star
  and raise issues. Wal-Mart terminated                      management team. And when a                                 CEO should not translate into board
  an employee who raised concerns about                      manager creeps in who cannot walk                           deference. Also, as difficult as it is to
  the personal expenses a senior officer                      the line, termination, fear, and silence                    swallow in this post-modern age, board
  submitted for reimbursement. Lee Scott,                    follow. At AT&T, during the glory days                      members should begin to worry when

    “Witness Says She was Punished by HealthSouth for her Qualms,” New York Times, February 23, 2005, p. C11.
    Full disclosure: the author did a session for Pepsi on culture, but the chairman’s award was already in place when she did so. Regrettably, she cannot claim credit for this
    Seth Schiesel, “Trying to Catch WorldCom’s Mirage,” The New York Times, June 30, 2002, p. BU1.
    William C. Symonds and Pamela L. Moore, “The Most Aggressive CEO,” Business Week Online, May 28, 2001,
    Taylor, Alex III, “Porsche’s Risky Recipe,” Fortune, February 17, 2003, p. 91.

Fall 2007                                                     Association of Healthcare Internal Auditors                                              New Perspectives 23
     the CEO dabbles in questionable personal                    under corporate governance standards.                     a letter, which was not cleared with the
     conduct. Bad judgment is bad judgment,                      For example, the UnitedHealth Group                       ethics committee, the board, or general
     whether personally or professionally.                       board ran into the stock options issues                   counsel, to Mr. Coll, dictating the terms of
     Affairs, high levels of personal expenses                   because of conflicts of interest related                   the Riza relocation.10 There is no question
     and investments, and dramatic shifts in                     to investment fund management                             that Mr. Wolfowitz was a wonderful
                                                                                                                           CEO of the World Bank. And there is no
                                                                                                                           question that his enemies seized upon
                                                                                                                           his misstep to oust him. But there is
                                                                                                                           also no question that he had a conflict
                       Because it’s hard to sit in a room and disagree with people                                         of interest, and there are two ways to
                                     you respect who think it’s okay.                                                      manage a conflict of interest: disclose it
                                                                                                                           or don’t. Living in denial on conflicts not
                                                                                                                           only clouds judgment, it sends a signal to
                                                                                                                           employees that the ethics thing is not as
                                                                                                                           important as you might be telling them.
     behavior should find boards reining in                       contracts, philanthropic ties, political                  Culture grows through tiny actions, and
     the CEO. Employees look to leaders for                      contributions and other interconnections                  exceptions to rules for the CEO send a
     examples, with fully 75% saying the single                  between Dr. McGuire and his board (and                    powerful signal.
     most important factor that influences their                  compensation committee) members. As a
     ethical choices at work is the behavior of                  result, the oversight of the process, now                 SIGN #6–A Culture of Innovation
     their supervisors, managers, and officers.                   corrected, was lax.                                       like No Other
     An atmosphere in which hedonistic                           Perhaps the most important qualification                   “You know, if we hadn’t had all those
     CEOs go unchecked is not one that brings                    for a board member is the ability to                      expenses, we would have had earnings.”
     employees to the hotlines. If a board                       question and, on occasion, say “No!”                      Such is a quote attributed to a dot-com
     wants an ethical atmosphere, raucous                        When I asked a board member why he                        CEO during the EBITDA era. Those
     behavior in the executive suite will not get                approved a loan to a CEO who eventually                   in these collapsed companies fancied
     it there.                                                   had to be terminated when he had                          themselves as being above accounting
                                                                 concerns about the loan, he explained,                    and financial reporting rules, and
     Sign #4 – A Weak Board                                      “Because it’s hard to sit in a room and                   destined to be different because of their
     Tolstoy’s adage on happy families can be                    disagree with people you respect who                      sheer brilliance and innovation.
     modified and applied. Just as all happy                      think it’s okay.” That’s effective corporate
     families are alike and all unhappy families                 governance in one sentence: being able to                 Companies that enjoy tremendous
     are different in their misery, all effective                sit in a room of gifted and bright people                 success initially (largely attributable to
     boards are alike and all weak boards are                    and raise questions about troubling issues                that numbers pressure) are at risk for
     weak for different reasons. Some boards                     that no one else sees or is willing to raise              believing that they are above the rough
     were weak because they were boards of                       is the single most important talent a                     and tumble world of business. Rather
     inexperience. Others were weak boards                       director must have.                                       than acknowledge gravity’s forces (that
     because of the presence of friends who                                                                                apply in business and stock markets),
     would do whatever management wanted.                        SIGN #5—A Culture of Conflicts                             they used any means available, including
     There was “Bernie’s Board,” a board that                    Organizations at risk for ethical collapse                fraud, something really smart innovators
     consisted of Bernie Ebbers’ friends. Others                 are family friendly ones. Their officers                   can do because, well, they are really
     were weak because of the presence of                        hire relatives, contract with companies                   smart innovators. Sanjay Kumar, the
     conflicts of interest. At HealthSouth, the                   owned by relatives, and generally use                     brilliant and former CEO of Computer
     directors were doing business with the                      nepotism to its fullest extent. There is a                Associates who is now serving a year
     company and with the CEO. Other boards                      distinct atmosphere of back-scratching in                 sentence for fraud, once said that
     were weak because board members failed                      these companies.                                          standard accounting rules were not the
     to attend meetings or because the board                                                                               best way to measure his company’s
     meeting structure and processes—with                        Antidote for a Culture of Conflicts                        performance. His managers joked about
     major proposals approved over the phone                                                                               the 35-day month their company used to
                                                                 Believe in conflicts of interest. Something
     without directors being given the chance                                                                              meet sales goals. Hubris clouds the ethics
                                                                 happens to officers and directors; they
     for advance reading materials and with                                                                                of the innovators.
                                                                 have great difficulty acknowledging that
     little or no discussion–were flawed.                         they have conflicts and that conflicts of
                                                                                                                           Antidotes for Innovation like No Other
                                                                 interest matter. When Paul Wolfowitz
     Antidotes for Weak Boards                                   became president of the World Bank, his                   The antidotes are, again, simple.
     The antidote, always more easily said                       girlfriend, Shaza Riza, also worked at                    Innovators need the checks and balances
     than done, is to get yourself a strong                      the bank. The board’s ethics committee,                   of wisdom and business experience to
     board. Digging deeper on conflicts is                        concerned about conflicts, suggested                       walk them through the inflated ego stage
     helpful. You are looking for philanthropic                  that Ms. Riza be relocated to a position                  that comes from setting the world afire
     arrangements, donations, and other                          in which she did not report to Mr.                        with the power of invention. Refocusing
     types of relationships that do not trigger                  Wolfowitz. Xavier Coll, the World Bank                    on the mundane tasks of business such
     statutory reporting provisions or even                      VP for HR, was to work out the details of                 as customer service, reducing costs, and
     the traditional notions of conflicts                         the Riza relocation. Mr. Wolfowitz sent                   hard work have a grounding effect. A

          Greg Hitt, “Wolfowitz Memo, Dictating Raises Given to Friend, Now Haunts Him,” Wall Street Journal, April 14, 2007, pp. A1, A5.

24        New Perspectives                                        Association of Healthcare Internal Auditors                                                  Fall 2007
  focus on long-term success goes a long
  way in restraining innovation as it is
  steered toward fraud.

  SIGN # 7: Goodness in Some Areas
  Atones for Evil in Others
  Post-modern moral relativism gave us this
  factor in ethically collapsed companies.
  These ethically challenged companies
  were, oddly, model corporate citizens.
  Fannie Mae was named the most ethical
  company in America for 2004 by Business
  Ethics magazine. By the end of 2005, its
  CEO had been ousted and the company
  was facing a $6-billion restatement for
  what was called earnings manipulation in
  an arrogant corporate culture. AIG may
  have been forced to restate its earnings
  and pay a billion-dollar fine, but former
  CEO Hank Greenberg ran in the best of
  New York’s philanthropic circles.11
  These companies and their officers used                        companies, the emphasis on doing good          conversations an ethics officer will ever
  a balancing rationale. So long as they                        may well be a cover for what goes on           have. Board members must acknowledge
  were good to the environment, strong                          internally. Difficult as it is for an ethics    conflicts. Managers must curb personal
  on diversity, involved in the community,                      professor to say, the documentation            excesses. And we all need some carrots
  and generous with charitable donations,                       is too strong: Be very cynical about           to go with our sticks: protect and reward
  their schemes and frauds were not a                           corporate generosity and social                employees who do the right thing and
  problem. Rationalization took over as                         responsibility.                                are willing to speak up when someone
  they convinced themselves that they were                                                                     gets it wrong. The antidotes are simple
  modern Robin Hoods. Their philanthropic                                                                      and straightforward in discussion. In
  and social goodness became the salve for                                                                     implementation, well, you are charged
  consciences grappling with cooked books,                                                                     with molding and shaping a culture and
  fraud, and such.                                                          Do not equate                      then being vigilant enough to sustain it
                                                                         socially responsible                  with continuing candor. NP
  The Antidote for Goodness                                                                                    Marianne M. Jennings is a professor of Legal
  The antidote for this factor is quite
                                                                            behavior with
                                                                                                               and Ethical Studies at the W. P. Carey School
  simple: do not equate socially                                            virtue ethics.                     of Business, Arizona State University where
  responsible behavior with virtue ethics.                                                                     she teaches graduate courses in the MBA
  There is not a continuum that allows                                                                         program. Professor Jennings has authored
  us to assume that because companies                                                                          hundreds of articles in academic, professional
  and executives have answered what                             The Advice                                     and trade journals. Her latest book, The Seven
  we perceive to be the higher calling of                       The signs are clear and consistent.            Signs of Ethical Collapse was published by
  generosity that they have conquered the                       The antidotes are a different story for        St. Martin’s Press in July 2006. She may be
  basics of avoiding fraud. In evaluating                       they require some of the most difficult         reached at

       Daniel Kadles, “Down . . . But Not Out,” Time, June 20, 2005, p. 61.

                                                                                              Terrible things happen when good men stand still.
                                                                                                                                              ~ Elie Wiesel

Fall 2007                                                        Association of Healthcare Internal Auditors                            New Perspectives 25