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Ethically Speaking | Episode 10

Corporate Integrity | 2017

Mark your calendars for Corporate Integrity | 2017. The event is Wednesday, January 25, 2017, and will feature a panel of three experts who will be discussing:

  • The Wells Fargo Cross Selling, Incentive Pay and Whistleblowing Scandal
  • The Global Pharmaceutical Pricing and Marketing Scandals
  • The Challenges of Ethical Decision Making and Artificial Intelligence


 

It's Time to Look in the Ethical Mirror

Institute for Enterprise Ethics | Wells Fargo and Ethics

With all the new coverage of Wells Fargo's fake-account debacle, I (Professor Robert Giacalone) have yet to see an answer to this pivotal question: How does one simply miss more than 5,300 wrongdoers at a bank?

How can so many employees across so many branches go "off the rails" and no one know about it? The easiest answer: This was an ingrained practice. By firing so many employees, Wells has all but acknowledged that unethical behavior was rampant. Rather than a needle in a haystack, the huge number of employees opening sham accounts was an overt sign of an organizational culture problem.

Perhaps most frightening is that the ethical deficit in business is not limited to banking or to the United States. So what has caused this ethical breakdown?

Click here to read more.

Real Ethics for Artificial Intelligence

Institute for Enterprise Ethics | Artificial Intelligence
How do we know artificial intelligence (A.I.) driven robots won’t end up doing nasty things to us humans? Well we don’t, but five of the world’s largest tech companies are trying to create a standard of ethics around the creation of artificial intelligence. 

As reported in the New York Times, Alphabet’s Google, Amazon, Facebook, IBM and Microsoft have launched a project to guide the development of A.I. in the tech industry.

The specifics of what the industry group will do or say — even its name — have yet to be hashed out. But the basic intention is clear: to ensure that A.I. research is focused on benefiting people, not hurting them, according to four people involved in the creation of the industry partnership who are not authorized to speak about it publicly.

Click here to read the full article in The New York Times




 

What's New

Jamie Dimon on Responsibility

Institute for Enterprise Ethics | Jamie Dimon

Businessmen coming to Washington D.C. to meet with legislators and regulators “…should put the interests of the country before the interests of your industry or your company.”

Jamie Dimon was interviewed by David Rubenstein, president of the Economic Club of Washington D.C. on September 12, 2016. Among other topics, they discussed the responsibilities of business people to concern themselves and their companies with the vitality of not just their businesses and their industries but also with the vitality of their country, its economy and its society. I will personally admit to being an unabashed Jamie Dimon fan, but I do believe this is one of the outstanding public statements made by a business leader in recent history.

Dan Sweeney, Director
Institute for Enterprise Ethics

Is There a Moral Foundation for Capitalism?

Enterprise Ethics | Is There a Moral Foundation for Capitalism?

In the New York Times Opinion Pages, Major Nathaniel B. Davis, Director of the Defense and Strategic Studies program at the United States Military Academy, West Point, argues that if there can be (and there is) a moral foundation for war, then surely there can be (and should be) a moral foundation for capitalism.

I have often said that leaving tough economic decisions to the amoral consequences of the “invisible hand” of the market is an abdication of the moral responsibilities of the executive decision maker. Major Davis says that we do not allow military decisions in warfare to be made without consideration of their ethical and moral implications. Why should we do so in the business world? It is likely because we have not yet agreed on the moral foundation of capitalism and free market enterprise. We need to get on with this task.

Dan Sweeney, Director

Institute for Enterprise Ethics

Wells Fargo Pays $185M in FinesInstitute for Enterprise Ethics | Wells Fargo Fine

Wells Fargo came through the great recession with a still shiny reputation as Main Street America’s bank and a Wall Street favorite as a tightly run operation. The bank’s cross-selling strategy linking them ever closer to their retail customers was the envy of the industry.  We now know that this strategy was fueled by an aggressive compensation structure with apparently questionable oversight.

“It’s way out of character for one of the cleanest banks around. It’s a head-scratcher why so many employees felt comfortable crossing the line” Mike Mayo a banking analyst at CLSA said to the New York Times. Sometimes the realities of a corporation’s culture look very different in the executive office suites than they do on the front lines.

Could this be why the U.S. healthcare system is so expensive?

Institute for Enterprise Ethics | Medicare Fraud Case

"A network of corrupt doctors, hospitals and healthcare providers across south Florida (are charged with) improperly billing more than $1 billion to Medicare and Medicaid." This is the most recent case brought by the Justice Department's Medicare Fraud Strike Force which has charged nearly 2,900 defendants who have been accused of billing the Medicare system more than $10 billion fraudulently.

The owner of more than 30 Miami-area skilled nursing and assisted living facilities, as well as a hospital administrator and a physician's assistant were charged in an indictment with conspiracy, money laundering and health-care fraud, the U.S. Attorney's office in Miami said, as reported by CNBC.

Miami U.S. Attorney Wifredo Ferrer said, "Medicare fraud has infected every facet of our health-care system."

This is a ground breaking case in terms of its scope, value and depth, and may shed light on why the cost of health care in the United States continues to outpace the general economy.

Read the complete story on the CNBC website, click here.


The Big Pharma Price gouging Epi(PEN)demic
EpiPen $600 | CEO pay increased

The latest occurrence of big pharma taking advantage of a broken healthcare system and the patients who depend on it, is the fourfold price increase on EpiPen (see: NYTimes), the life-saving severe allergy treatment drug used mostly by children and owned by Mylan corporation. Even though the product has been on the market for decades, the giant price increase was excused by Heather Bresch, the Mylan CEO and necessary to “recoup R&D expenses."

She also explained in excusing the extraordinary price increase “I am running a business. I am a for-profit business. I am not hiding from that.” Running a business does not excuse a very, very well paid executive from gouging the customer and overburdening the already weakened insurance industry with uncalled-for price increases on established products in a close-to-monopoly market situation.

Click here to read the complete story in the New York Times

Strategic Partners

NetImpact's mission is tNetImpact | University of Denvero cultivate a community of Daniel's College of Business students and professionals dedicated to using business as a platform for creating positive social, environmental, and financial impact.

Strategic Partners

National Association of Corporate Directors | Colorado Chapter

The vision of the National Association of Corporate Directors is to develop the best educated directors with a focus on skills, ethics and leadership.  Their mission is to provide real learning and quality networking for directors and board engaged “C” suite officers and to be the voice for the director.

 

About the Institute

The Institute for Enterprise Ethics was established at the Daniel's College of Business as the vehicle to extend the College’s expertise and resources in business ethics to the practitioner community of executives, officers and directors of commercial and social enterprises in the region.

To learn more about the Institute, click here.

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