One of the most lethal threats to any organization is misconduct within its own walls. We need only consider the sudden demise of Enron Corporation or Barings Bank – both fatally wounded by their own officers. Lack of attention to ethics can be a corporation’s Achilles’ heel, with the potential for a single employee to topple even large well-established companies. Adding to the threat, advanced technology gives individuals more power, raises the stakes and speeds up the action.
This is why there’s no reassurance in stating that recent scandals like Enron, Xerox or WorldCom are aberrations rather than reflections of a systemic problem. Whether or not the majority of companies actually have these problems, they are all highly vulnerable under the wrong circumstances.
This paper presents five questions any board member can ask to begin a dialogue that will mitigate the risks presented by principle-agent relationships in larger organizations. But before we get to the actual questions, let’s consider why they need to be asked.
See full Article.
Posts
