A review and interactive discussion of…

1. A review and interactive discussion of…

2. The National Survey of CEOs on Business Ethics Have the recent changes in regulations regarding ethics and governance (i.e., the Sarbanes-Oxley Act, the updated Federal Sentencing Guidelines, revised listing requirements of stock exchanges, etc.) affected how your organization manages ethics and compliance? Of those who said yes, what did they do? Hired new staff or restructured organization responsible for ethics and compliance Updated ethics or compliance policies Revised mission, vision or values statements Created new ethics/compliance committees Developed new communication strategies for managing conduct Increased budget for ethics and compliance management Created or strengthened ethics and compliance training

3. The National Survey of CEOs on Business Ethics Do you have or plan to implement in the next 12 months… A stated ethics policy (e.g., Code of Ethical Conduct)? A board level committee responsible for ethics and compliance? An ethics and compliance training program? A department that is primarily responsible for ethics and compliance? An assigned ethics and/or compliance officer? A company ethics helpline (e.g., to report concerns)? A statement of values to guide corporate conduct? If you answered yes to any item above. . . What is the single most important motivation for implementing an ethics initiative within your firm?

4. The National Survey of CEOs on Business Ethics How important are these factors for explaining unethical conduct in most organizations?

5. The National Survey of CEOs on Business Ethics CEOs who thought high ethical standards strengthened a company’s position were not significantly more positive about regulation, than those who thought high standards weakened or had no effect . CEOs who agreed that the ethical performance of corporate America has improved over the last 4 years were significantly* more positive about regulation, than those who felt it had not improved. CEOs who thought high ethical standards strengthened a company’s position were not significantly less likely to think that internal corporate pressures lead to unethical conduct, than those who thought high standards weakened or had no effect. In your judgment, how do high ethical standards affect a company’s competitive position? “The Sarbanes-Oxley Act and related regulatory measures have improved the standard of ethical performance of corporate America” “The Sarbanes-Oxley Act and related regulatory measures have improved the standard of ethical performance of corporate America” “How important is pressure to meet deadlines and schedules for explaining unethical conduct among employees at most organizations?” “The Sarbanes-Oxley Act and related regulatory measures have improved the standard of ethical performance of my business” “The Sarbanes-Oxley Act and related regulatory measures have improved the standard of ethical performance of my business” “How important is pressure to meet unrealistic performance or financial goals for explaining unethical conduct among employees at most organizations?” … in the short term “The Sarbanes-Oxley Act and related regulatory measures have strengthened public and investor trust in corporate America” “The Sarbanes-Oxley Act and related regulatory measures have strengthened public and investor trust in corporate America” CEOs who thought high ethical standards strengthened a company’s position were significantly less likely to think that broad economic pressures lead to unethical conduct, than those who thought high standards weakened or had no effect. “The Sarbanes-Oxley Act and related regulatory measures were an overreaction to the ethical failures of a handful of companies and have proven to be burdensome and unnecessary for most good companies” “The Sarbanes-Oxley Act and related regulatory measures were an overreaction to the ethical failures of a handful of companies and have proven to be burdensome and unnecessary for most good companies” “Business executives are more likely to make ethical compromises during economic downturns” … in the long term

6. The National Survey of CEOs on Business Ethics CEOs’ Roles and Compensation: • Differences* between CEOs in publicly held and private firms • CEOs in privately held organizations more likely to agree: Public companies' responsibilities to employees frequently conflict with their need to maximize shareholder returns. • CEOs in privately held organizations more likely to agree: My standard of business ethics has improved over the course of my career. • CEOs in privately held organizations more likely to agree: CEO compensation in most large public companies is excessive. • CEOs in privately held organizations more likely to disagree: CEO compensation in most large public companies is properly aligned with corporate performance. • Differences* by number of employees (small under 100, medium 101 to 1000, large 1001 or more) • CEOs in mall and medium sized (under 1000 employees) more likely to agree: Public companies' responsibilities to employees frequently conflict with their need to maximize • CEOs in small and medium sized (under 1000 employees) more likely to agree: My standard of business ethics has improved over the course of my career. • Difference* by annual sales (small under $50 million, medium $50 million to $250 million, large over $250 million) • Difference between small, medium and large—smaller more like to agree: Public companies' responsibilities to employees frequently conflict with their need to maximize • Difference between small, medium and large—smaller more like to agree: My standard of business ethics has improved over the course of my career. • Difference between small, medium and large—smaller more like to agree: CEO compensation in most large public companies is excessive. • * statistically significant with p < .05

7. The National Survey of CEOs on Business Ethics 1) What are the top 5 ethical issues facing the general business community? 2) What are the top 5 ethical issues facing your industry?

8. The National Survey of CEOs on Business Ethics Do you agree or disagree? The criminal convictions of Kenneth Lay, Jeffrey Skilling, Bernard Ebbers and other corporate leaders….. • No statistically significant differences by number of employees, annual sales or whether organization is publicly or privately held. Some differences, however, by industry: • 76.8% of manufacturing CEOs agreed “it showed the system works.” • 82.1% of healthcare and non-profit CEOs agreed “further erodes public trust and confidence in business leaders” • only 76.9% of banking, finance and insurance CEOs agreed “makes corporate leaders more attentive to ethics” • only 34.5% of healthcare and non-profit CEOs agreed “helps restore public trust and confidence in the financial markets.” • 76.5% of information technology CEOs agreed “reinforces a negative and unfair stereotype of CEOs.” • only 72.7% of professional and technical service CEOs agreed “encourages even more legal scrutiny and regulation of business.”

9. The National Survey of CEOs on Business Ethics To what extent do you agree or disagree? “University business schools should require courses in business ethics and/or ethics components in other business courses.” However, CEOs who believe that business schools have a greater role to play are not doing all that much more in their own organizations in terms of ethics management. Comparing CEOs who “strongly agreed” that university business schools should require ethics courses and/or ethics components to all other CEOs the differences in the ethics policies, practices and procedures are slight.

10. The National Survey of CEOs on Business Ethics Demographics of the National Survey of CEOs sample Industry Number of Employees Annual Sales Percent publicly owned

11. ROBERT J. RUTLAND INSTITUTE FOR ETHICS …The programs and activities of the Rutland Institute for Ethics are multidisciplinary and are intended to benefit both the campus and the community. Campus activities focus on three groups: students, faculty and staff. Community programs are designed to reach as much of the community as possible, with special attention directed to the business, education and professional sectors. The principal academic partner of the Rutland Institute is the Clemson University Department of Philosophy & Religion…. “From it’s inception as a military institution, Clemson has been recognized widely for the strong sense of character developed in its graduates. The Rutland Ethics Across the Campus program compliments and formalizes this long-standing Clemson commitment.” ~James F. Barker, FAIA--President, Clemson University  Main Office Phone: 864.656.5379 ~ Fax: 864.656.2858 The Robert J. Rutland Institute for Ethics 126D Hardin Hall ~ Clemson University ~ Clemson, SC 29634-5138 Dr. Daniel E. Wueste , Director ERNEST@CLEMSON.EDU Linda Gallicchio, Associate Director LGALLI@CLEMSON.EDU www.clemson.edu/ethics

12. Mailing Address The Center for Ethics and Corporate Responsibility P.O. Box 3994Atlanta, GA 30303-3994 Physical Address The Center for Ethics and Corporate Responsibility 34 Broad St., 14th floorAtlanta, Georgia 30303 Phone 404.413.7420Dr. John Knapp, Director jknapp@gsu.edu Dr. Steven Olson, Associate Directorsolson@gsu.edu http://robinson.gsu.edu/ethics/index.html

13. In keeping with Clemson University’s core values and aspiration to be a Top-20 public university, the Clemson Renaissance Center in downtown Greenville — a unit of Clemson’s College of Business and Behavioral Science — will be the center for entrepreneurship, experience-based graduate education and a portal to the dynamic Greenville business community. The Center will enable graduate students and faculty to work directly with area firms, entrepreneurs and leaders in innovative ways that will both enrich and accelerate the learning experience of all. By 2015, the Renaissance Center will be recognized nationally as a model for total immersion graduate education based on its innovative programs, the students it attracts, the graduates it produces and its interaction with the business world. By then, the Center’s entrepreneurship-enriched MBA will be emerging as one of the nation’s leading entrepreneurship degree programs. 135 South Main Street, Ste 600 Greenville, SC 29601.   Phone (864) 370-3038 ~ Fax (864) 370-1522 Caron St. John, Associate Dean for Graduate Programs & Innovationscaron@clemson.edu Pris Foster, Administrative Coordinator

14. Robert J. Rutland Institute for Ethics The Center for Academic Integrity provides a forum to identify, affirm, and promote the values of academic integrity among students, faculty, teachers and administrators. The Center for Academic Integrity is affiliated with the Robert J. Rutland Institute for Ethics at Clemson University in Clemson, South Carolina. CAI is a consortium of over 360 institutions who share with peers and colleagues the Center's collective experience, expertise, and creative energy. Main Office Phone: 864.656.1293 Fax: 864.656.2858 CAI-L@clemson.edu Mailing Address: The Center For Academic Integrity 126 Hardin Hall ~ Clemson University Clemson, SC 29634-5138 Dr. Stephen Satris, Director STEPHEN@clemson.edu www.academicintegrity.org