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Of the more than 500 readers who responded to our May 3 online survey, "Cleaning Up Wall Street's Mess," only about 17% would rate the ethics of top corporate officers as good or excellent, vs. the 38% who rate them as fair and the 44% who rate them as poor.
Top officers of investment-banking houses come off even worse, with only 5% of readers crediting them with good or excellent ethics, and 69% giving them a rating of poor.
When it comes to assigning blame for ethical lapses, 30% of respondents cite the individuals involved, while 58% cite both the individuals and their companies. In fact, a rather large 42.7% say they've been in situations where their employer required or expected them to do something they regard as unethical.
Admirably, 60% say they would risk losing their jobs rather than do something unethical. But a brutally honest 15% say they would decide on which way to bend depending on the risk involved in the unethical act -- and the size of the reward if they weren't caught.
Readers would prescribe practically the same medicine for corporate officials who engage in accounting fraud as for analysts (and their superiors) who dispense misleading advice to investors: Some 35% and 38%, respectively, would suggest as punishment dismissal plus substantial fines. Some 61% and 56%, respectively, would send the offenders straight to prison.
As for preventative measures, some 60% of respondents would go for a list of four remedies, rather than pick just one. Here are the complete results:
On average, how would you rate the ethics of top officers at U.S. companies?
Option
Total
%
Excellent
9
1.67 %
Good
83
15.43 %
Fair
205
38.1 %
Poor
237
44.05 %
No opinion
4
0.74 %
On average, how would you rate the ethics of top officers at U.S. investment banking houses?
Option
Total
%
Excellent
8
1.50 %
Good
23
4.32 %
Fair
128
24.02 %
Poor
367
68.86 %
No opinion
7
1.31 %
In general, who do you think is most responsible for ethical lapses in companies?
Option
Total
%
The individuals involved
163
30.35 %
The companies themselves
56
10.43 %
Both equally
310
57.73 %
Neither
2
0.37 %
No opinion
6
1.12 %
Have you personally ever been in a situation where your employer required or expected you to do something you regarded as unethical?
Option
Total
%
Yes
228
42.7 %
No
278
52.06 %
Don't know
28
5.24 %
Would you personally be willing to risk losing your job by refusing to do something you think is unethical, but that your employer tells you to do?
Option
Total
%
Yes
323
60.26 %
No
72
13.43 %
Depends on the size of the reward, vs. the risk of getting caught
81
15.11 %
Don't know
60
11.19 %
What remedy do you think is appropriate for top corporate officials who use accounting tricks to misrepresent a company's performance?
Option
Total
%
A good talking to
1
0.19 %
Dismissal
19
3.55 %
Dismissal plus substantial fines
185
34.58 %
Prison
325
60.75 %
Other
4
0.75 %
No opinion
1
0.19 %
What remedy do you think is appropriate for Wall Street analysts and their superiors who exaggerate a stock's potential in order to bring in more revenues or boost their
Option
Total
%
A good talking to
3
0.56 %
Dismissal
22
4.10 %
Dismissal plus substantial fines
203
37.8 %
Prison
299
55.68 %
Other
9
1.68 %
No opinion
1
0.19 %
What do you see as the best way to ensure that companies don't engage in accounting fraud?
Option
Total
%
Remove the temptation, perhaps by capping executive compensation at a specific multiple of average pay for all employees in the
30
5.59 %
Make boards of directors liable for accounting irregularities
54
10.06 %
Enact tougher government oversight of corporate bookkeeping
11
2.05 %
Impose stiff punishments on individuals and companies that cook the books
108
20.11 %
All of the above
323
60.15 %
Do nothing: People who want to cheat will always find a way
5
0.93 %
No opinion
6
1.12 %
What do you see as the best way to ensure that stock analysts and brokerage houses don't purposely mislead investors for their own gain?
Option
Total
%
Require that the people in a brokerage who analyze stocks have no contact with those who sell stocks or do investment-banking de
48
8.96 %
Make compensation for stock analysts contingent on the accuracy of their analysis, not on the investment-banking fees their anal
124
23.13 %
Require public companies to give equal access to all qualified analysts -- not just
38
7.09 %
All of the above
315
58.77 %
Do nothing: People who want to cheat will always find a way to
2
0.37 %
No Opinion
9
1.68 %
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Copyright 2002 , by The McGraw-Hill Companies Inc. All rights reserved.
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