During the past couple of years, I have been closely following the scandal rocking Volkswagen over its falsifying of pollution emission data for its diesel vehicles. In January of this year, six men were formally charged by the U.S. Department of Justice, accused of defrauding the United States and Volkswagen customers there, of violating the Clean Air Act and of committing wire fraud. More charges could be in the offing. European authorities are also considering the prosecution of VW executives with respect to the cover up and organized deception carried out over several years. The VW scandal is just the latest in a growing list of scandals going back to Hollinger, WorldCom, Lehman Brothers and of course Enron at the turn of the century — to name only a few.
When it comes to unethical conduct by corporate leaders, the VW case is only the tip of the ice berg. A recent study by Price Waterhouse Cooper indicated that there has been an increase in Chief Executive Officers (CEO) in the U.S. and Canada leaving their position due to scandal or improper conduct. Improper conduct by a CEO or other employees is defined as including fraud, bribery, insider trading, environmental disasters and sexual indiscretions. Not only is this a North American concern, as the above study looked at ethical lapses by CEOs of the world’s 2,500 largest companies. They found that the issue is indeed global in extent. Furthermore, bigger companies were found to be more likely to force out a CEO over an ethical lapse.
What does this say about the ethics of leaders in the business world? How best can ethics and professionalism be taught in business schools and within companies? There is obviously a concern given that courses on corporate ethics are now being given in some of our top universities and colleges, something unheard of a decade or two ago. Indeed, such teachings are even more important given the expanded definition of what comprises unethical or improper conduct. It’s simply not good enough for companies to have written codes of ethics in place, they also have to be enforced from top to bottom in organizations. Boards of directors and independent bodies have to be more accountable for ensuring that business is being carried out in a proper and ethical manner.
If the work of the private and public sectors is carried out in an unethical manner, we all suffer as clients and citizens. Indeed, it is incumbent upon our national leaders to lead by example. They must represent the best of our societal values and act as role models for current and future generations of leaders. Otherwise, we’re all in serious trouble. We expect and deserve ethical conduct by our Presidents and Prime Ministers, State Governors and Provincial Premiers and other high level public officials. They need to set the proper tone for ethical public and corporate leadership in our two countries.
FROLITICKS 
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