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Source: Diane Swanson, 785-532-4352,
News release prepared by: Greg Tammen, 785-532-2535,

Thursday, Dec. 23, 2010


MANHATTAN -- Corporate ethics made for several news headlines in the last 10 years.

Diane Swanson, a professor of management and the chair of the business ethics education initiative at Kansas State University, is considered one of the foremost experts in the field of corporate ethics. According to Swanson, the following were five of the most influential ethical moments within the business sector this decade:

* Corporate philanthropy and price gouging on 9/11. Television coverage of Sept. 11 often featured a small ticker at the bottom of the screen, listing businesses that donated to recovery efforts. "At the same time there were recorded instances of price gouging at the gas pumps," Swanson said. "This really stood out to me as an ethics moment because at the same time some businesses were hiking up the price of fuel, others were making unprecedented donations to the recovery effort and telling workers to go home and be with their families."

* The BP oil gusher. The BP oil rig accident and the resulting crisis demonstrates the vital importance of effective government regulation of risky industries, Swanson said. Consequently, the social, environmental and financial impacts will continue to be an issue across the globe well through the coming decade. "The theory is that we allow corporations to be chartered and to become as large as they are for the social good. However, there's a point when it can no longer be said that self-regulation is going to serve that goal in certain industries," she said.

* The subprime mortgage crisis and foreclosures. "In moral reasoning evidence indicates that most people reason on a conventional level. They look to a rule or law for a boundary for their peer group. That's where most people reason. But if you take out the rules and the peer group believes everybody else is doing what they are, that creates a real moral hazard," Swanson said. "We saw the effects of that hazard in the asymmetrical bailouts that rescued big banks but failed to provide such assistance to most homeowners."

* Fall of Enron. Enron's collapse gave the world a snapshot of a company that projected an image of financial strength while crumbling internally. Enron's demise also dealt a blow to the accounting profession, Swanson said. "That profession really lost its time-honored ability to self-regulate. It embodied a real shift that such a large profession charged with important oversight duties can no longer be counted on to police itself," she said.

* Citizens United. The Citizens United v. Federal Election Commission ruling by the Supreme Court was a landmark decision because in treating corporations as persons, it equates money with the right to free speech under the First Amendment. As a result, corporations are not limited in funding independent political broadcasts in candidate elections, Swanson said. This ruling has created superpacs, which will increase corporate influence over future elections. "A powerful playing field has been created where corporations have undue influence and/or conflicts of interest. Whenever there are conflicts of interest and power imbalance, ethical dilemmas are like bombs waiting to be ignited," Swanson said.