Tuesday, November 15, 2011

Ethics, Penn State & Corporate America

The tragic events at Penn State lead to at least two ways of assessing the conduct of the university’s officials.  First, they dealt with the matter in-house and had no obligation to involve the government’s legal system. Second, they dealt with the matter in-house and had at  least a moral obligation to involve the government’s legal system. In this posting, I do not wish to address these issues. However, I do want to make a comparison with the way such matters are handled in much of corporate America and probably many law firms.

Suppose that you are a promising employee in an American corporation, and you discover wrongdoing by some corporate officials.  You report the wrongdoing to a superior or  to the board of  directors. Given the unwritten rules of that culture, you do not go to outside legal authorities even if the board chooses to ignore your well-supported report. You know that if you were to go to the law, your career might well end with your present employer as well as with other potential employers. (By the way, even if you make only an  internal report, you may lose your job anyway.)

My point: not all institutions agree that one should invoke the legal system to deal with issues of wrongdoing. To reject this code of conduct can have severe consequences. Maybe we should discuss such ethical matters with our students.



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