Business-Ethics Issues Reverberate in World Press Reports
Jan 28th, 2008 • Posted in: NewsFrom the “you thought it couldn’t get worse” department, unprecedented bank-fraud scandal may cost $7 billion; also, ethics is on the agenda at the World Economic Forum, a Wal-Mart event, and the Siemens shareholders meeting
VARIOUS DATELINES
The world press focused on a variety of business ethics stories last week:
- As the ethics scandal over subprime loans continued to resonate worldwide, another financial blockbuster rocked the markets last week. The giant French bank Société Générale revealed that a rogue trader had defrauded the company of $7.2 billion, according to Bloomberg. The loss is unparalleled in world banking history and apparently developed when a young trader set up dummy securities accounts and made some very bad bets. An officer of the New York Stock Exchange who handles European markets told Bloomberg that the fraud was apparently made possible by bafflingly complex financial systems with insufficient oversight.
- Ethics was on the agenda at the World Economic Forum last week. About 2,500 political and business leaders gathered in Davos, Switzerland, with one of the main events described as a discussion of the “Unified Earth Theory.” ABC News reports that during the event, advocates Al Gore and rock star Bono spoke about their claim that Western nations bear a moral responsibility to eliminate extreme poverty and head off global warming. Bill Gates was on hand and made a pitch for “creative capitalism,” saying corporations are duty bound to “find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well,” according to a report from BusinessWeek.
- Retail titan Wal-Mart last week pledged to reduce its carbon footprint and require its suppliers to meet stricter ethical standards. In a speech to employees last week, CEO Lee Scott said he would pressure suppliers to produce goods that reduce power consumption by about 25 percent on average over the next three years, reports the technology news service CNET. “If we achieved our 25 percent goal just in the U.S. we would save enough electricity to power 3 million homes per year or the equivalent of 10 million barrels of oil,” Scott said. “We do not know exactly how we will get there. We do not even know if our suppliers can make items like hair dryers that user 25 percent less energy. But we do know that our approach works — to partner with suppliers, to help customers make better decisions, and to use our business model to drive out waste.” Wal-Mart has gone on the ethics offensive in recent years after being the target of critics who take issue with the firm’s business practices, working conditions, and supply sources.
- Shareholders of German engineering giant Siemens last week told corporate leaders that the company’s strong profits are being offset by weak ethics. The Agence France-Presse reports that investors at a shareholder meeting called for a renewed focus on ethics after the firm was rocked by a yearlong wave of corruption scandals. Daniela Bergdolt, who represents a group of small investors, declared that “the reputation built by Siemens for 160 years has been reduced to ashes.” But others praised the firm’s new chief, Peter Loescher, for shaking up complacent management, starting a probe of internal corruption, and simplifying Byzantine reporting structures that apparently allowed billions in fraudulent transactions to be hidden.
Sources: Bloomberg, Jan. 25 — ABC News, Jan. 26 — CNET, Jan. 27 — AFP, Jan. 26.
For more information, see: Related Newsline story, Dec. 10, 2007 — Related Newsline story, Nov. 5, 2007 — Related Newsline story, July 2, 2007 — Related Newsline story, May 29, 2007 — Related Newsline story, Feb. 18, 2002.
Print This Story
Email This Story
[...] result of that fallacy is now painfully clear: a $7.2 billion loss last week for Société Générale, based on trades initiated by a 31-year-old employee named [...]
[...] more information, see: Related Newsline story, Jan. 28 — Related Newsline story, Jan. 14 — Related Newsline story, Dec. 10, [...]
[...] 2 — Related Newsline story, Feb. 25 — Related Newsline story, Feb. 18 — Related Newsline story, Jan. 28. Print This Story Email This [...]