Ethics in Leadership “Ethical lessons with an accountancy mind-set”

1. Ethics in Leadership“Ethical lessons with an accountancy mind-set”

2. "Ethical Leadership” - With events of corrupt leaders engaged in all sorts of ethical breaches. Abuses of power continue to get people into trouble and destroy careers. How do modern day professionals rise above this fray and establish themselves as ethical leaders? The consensus of many experts: It must be done intentionally.

3. The Citadel

6. Why do (good) people break bad?

7. A scary place! “The mind of an Accountant”

8. 1 – Organizational Skills (outstanding) Keep up with all figures, data, and paperwork. Have a system for quickly finding information. Be able to organize work to maximize productivity and allow time for undisturbed research and analysis.

9. 2 – Time Management Skills Take care of many tasks beyond financial management (management / leadership). Contribute to strategic decision-making. Prioritize to make the most from their time at work.

10. 3 – Attention to detail. Make sure the numbers work and are correct. Eye for detail and due diligence for accuracy should be part of their modus operandi, not something they need to be reminded of.

11. 4 – Focus on Mission / Client. Strong orientation toward meeting mission / client requirements –understand the industry, sector, and client in detail. Decide which accounting rules or measures fit the business. Advice is always of value and knowing way around a sector to make more relevant and actionable decisions.

12. 5 - What drives an Accountant? Often thought of as extremely precise, with keen eye for detail and a vast amount of practical knowledge. Even a small mistake, can have a huge impact on business.

13. 6 - Extreme Trustworthiness Information an accountant works with is confidential in nature. Important mind-set / professional and never impart knowledge to third parties. Ethical in conducting accounting business. Maintain reputation for trustworthiness.

14. Accounting (Business) Leadership The Importance of Ethics and Ethical Leadership in the Accounting Profession: Research on Professional Responsibility and Ethics in Accounting. 2015, Mary Kay Copeland CPA, MBA, PhD Professor of Accounting and Enterprise Systems, Palm Beach Atlantic University The first decade of the twenty-first century was plagued with extensive, evasive, and disheartening ethical leadership failures. Despite the accounting profession’s standards of professional ethics, its professionals were also tainted with ethical leadership indiscretions.

15. Why the ethical disconnect? WorldCom, Enron, Arthur Andersen, Tyco International, Adelphia, and Peregrine Systems indicted for participation in accounting scandals and falsifying of results

16. Bernard Lawrence "Bernie" Madoff Founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008. On December 10, 2008, Madoff's sons told authorities that their father had confessed to them that the asset management unit of his firm was a massive Ponzi scheme, and quoted him as describing it as "one big lie". The amount missing from client accounts, including fabricated gains, was almost $65 billion. The Securities Investor Protection Corporation (SIPC) trustee estimated actual losses to investors of $18 billion. On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum allowed.

17. Local events (ethical concerns) Al Parish is a former Charleston Southern University economist, who was sentenced to federal prison after pleading guilty to financial fraud. Nearly 300 people lost up to $66 million invested in Parish Economic's private investment funds.

18. Culture vs. Programming (Ethical disconnect) “Parish said that he is not a typical con-man. He was just arrogant and stressed. His bookkeeping was terrible and his investment decisions were worse. A math whiz with no background in investing, Parish said he wished that he never touched a cent on behalf of others. Did he realize that he was breaking the law? He doesn't remember.” Schuyler Kropf – Post and Courier

19. Leadership through programming is usually a one shot (conference) deal. Leadership through cultural awareness is everyday, every problem deal

20. Happiness with life exercise! Index cards (hide your answers / write over them). Question – On scale from 1 to 10 (highest satisfaction). How happy are you ?

22. “6 - 7”

23. Congratulations,You have just one the lottery! Question – (Based on results from last question) How much happier will you be? How many points more on the happiness Scale?

25. “7 - 9”

26. Traits of an Ethical Leader? 1. Fair 2. Respect others 3. Honesty 4. Empathetic 5. Focus on teambuilding 6. Value driven decision-making 7. Encourages initiative 8. Leadership by example 9. Values creativity 10. No tolerance for ethical violations

27. Using the top three traits Answer the below questions: (no pain, no gain) 1 - As an organization gets larger there can be a tendency for the “institution” to dampen “inspiration.” How will you keep this from happening? 2 - How will you encourage creative thinking within your organization? 3 - Where will the great ideas come from in your organization? 4 - What do you think is the most difficult thing about being a manager or an executive? 5 - Do you consider yourself a leader? 6 - How do you deal with incompetence? Excellence? 7 - What important trends do you see in Leadership? 8 - What are the frontier or cutting-edge issues in Government Accountancy? 9 - Describe a few considerations (you take) before criticizing someone? 10 - Do you speak to others before they speak to you?

28. Back to why ethical leadership must be an all the time thing. What was the first criminal prosecution that used Forensic Accounting?

29. Elliot Ness Ness died of a heart attack in his Coudersport home on May 16, 1957 at the age of 54. At the time of his death, Eliot Ness was depressed, disillusioned and deeply in debt. Ness never knew that the book manuscript he and Oscar Fraley had produced would create the legend that endures even today

30. Appointed Chief of the Treasury Department's Internal Revenue Service Enforcement Branch in 1919, Irey would form one of the most successful investigative teams in the history of American law enforcement with agent Frank J. Wilson leading the hundred-man unit of "T-men" in a three-year investigation against Capone's criminal organization the "Chicago Outfit". Despite attempted jury tampering and death threats against Wilson, Irey's investigation succeeded in the conviction of Capone for tax evasion in 1931. Elmer Irey

31. Trevino’s “Managing to Be Ethical: Debunking Myths” Myth #1 It’s easy to be ethical. Reality Ethical decisions are complex and ambiguous.80% of adults look outside themselvesfor guidance. Five Business Ethics Myths

32. Trevino’s “Managing to Be Ethical: Debunking Myths” Myth #2 Unethical behavior in business is the result of “bad apples.” Reality Most people are followers; bad behaviorcomes from a system that is flawed. Five Business Ethics Myths (continued)

33. Trevino’s “Managing to Be Ethical: Debunking Myths” Myth #3 Managing ethics can be accomplished through formal ethical codes and programs. Reality Must be part of a larger coordinated culturalsystem supporting ethical conduct every day. Five Business Ethics Myths (continued)

34. Trevino’s “Managing to Be Ethical: Debunking Myths” Myth #4 Ethical leadership is mostly about leader integrity. Reality Need to address what you expect of others. Five Business Ethics Myths (continued)

35. Trevino’s “Managing to Be Ethical: Debunking Myths” Five Business Ethics Myths (continued) Myth #5 People are less ethical than they used to be. Reality Scandals are age old. Business & economies addressedin Scripture, Talmud, Koran, etc. Greenspan: “It is not that humans have become anymore greedy than in generations past, it is that the avenues to express greed have grown so enormously.”

36. Historical Roots of Accounting 10,000 years ago—Temple priests took inventory of village livestock. 3,000 B.C.—Scribes recorded ruler’s wealth. 2,000 B.C.—Sun Tzu “Art of War”. 1887—American Association of Public Accountants (later becoming the AICPA) was formed. 1896—New York State legislated the first CPA law. 1900—School of Commerce, Accounts, and Finance at New York University opens.

37. Historical Roots of Accounting 1902—Congress calls for audit reports for large corporations. 1913—Federal Reserve Board created. 1913—Federal income tax law was passed. 1914—Federal Trade Commission created. By 1921—All states had passed laws requiring exam for CPA certificate. 2016 - AGA Charleston establishes first annual Professional Development Training Conference (event is world renowned) 2017 - AGA Charleston establishes second annual Professional Development Training Conference (again event is world renowned)

39. Historical (Ethical) Leadership? 2,500 years ago 500 years ago

40. When it comes to ethics, we look to leaders to lead on ethics and take responsibility for both good and bad results. Philosophers have been discussing ethical leadership (as in what leaders should do) for quite some time but the topic is relatively new as an area of social scientific study

41. Leaders who lead ethically are role models, communicating the importance of ethical standards, holding their employees accountable to those standards, and design environments in which others work and live. Ethical leadership has been shown to cause a host of positive outcomes, and to reduce the risk of many negative outcomes

42. What is your leadership style? Transactional Transactional leadership, also known as managerial leadership, focuses on supervision, organization, and performance; transactional leadership is a style of leadership in which leaders promote compliance by followers through both rewards and punishments

43. Transformational To enhance the motivation, morale, and job performance of followers through work mechanisms; these include connecting the employee sense of identity and self to a project and to the collective identity of the organization; being a role model for followers in order to inspire them and to raise their interest in the project; challenging followers to take greater ownership for their work, and understanding the strengths and weaknesses of followers, allowing the leader to align followers with tasks that enhance their performance

44. Habits of Strong Ethical Leaders • Ethical Leaders Have Strong Personal Character • Ethical Leaders Have a Passion to Do Right • Ethical Leaders Are Proactive • Ethical Leaders Consider Stakeholders’ Interests • Ethical Leaders Are Role Models for the Organization’s Values • Ethical Leaders Are Transparent and Actively Involved in Organizational Decision Making • Ethical Leaders Are Competent Managers Who Take a Holistic View of the Firm’s Ethical Culture

45. A visit to NASA Ethical Leadership - From the perspective of a custodial engineer (janitor).

48. Ethical Leadership Empower yourself and employees so that they put Astronauts in space.

49. Contact Info? Ed Lugo Visiting Professor Dept. Of Criminal Justice The Citadel – Military College of South Carolina elugo@citadel.edu 410-660-9167 U.S. Secret Service Special Agent in Charge - retired