The Ethical Barometer

IKEA has apologized upon its discovery that it profited from the use of East German prison laborers. The problem was uncovered by Ernst & Young following a request
from IKEA that the audit firm conduct an investigation into the labor practices of IKEA’s contractors.  The audit found that prisoners were required to meet production quotas.  Failure to meet those quotas resulted in the prisoners being locked in a dark cellar or bound by their hands and feet to their beds. IKEA expressed its “deepest regret.”

For the first time in its history, American Airlines used outside contractors to reconfigure its cabins.  Most airlines are in the process of reconfiguring in order to allow more leg room for some seats, which, in turn, can bring greater revenue. Those contractors, however, were not familiar with the stringent FAA requirements for attaching seats.  As a result, four flights had seats come loose and another flight grounded after problems with the seats were discovered. American offered varying explanations:  (1) the clamps used were defective; (2) soda and dirt in the tracks prevented the clamps from working properly; and (3) design defects.  A final release in the form of explanations to mechanics said that there had been incorrect installation. The contractors, of course, deny culpability.

The use of external contractors is a minefield. If the cost seems too good to be true, it is.  Find out who the contractor is and explore the contractor’s facilities.  Learn who’s
doing what and how.  Using contractors who do not have the necessary pre-job briefings or who do not understand industry standards and your company  standards can be a risky proposition.  Grounded planes put a bigger dent in the budget than the difference in cost between external contractors and the use of employees with the necessary expertise and knowledge base. Brand damage from the use of prison labor can be crippling. Cost is one part of the decisions on contracting out company functions.

Federal prosecutors have uncovered a test-cheating ring in Memphis.  Clarence Mumford has been indicted for mail, wire, and Social Security fraud as well as identity theft for hiring folks to take Praxis exams for teachers who sought additional credentials for teaching in a specialty area.  Mr. Mumford was able to persuade the proxies to take the exams because he convinced them that the teachers were in danger of losing their jobs.  The test ring, which ran from 1995-2010, was uncovered in 2009 when a proctor at Arkansas State University noticed a substitute teacher taking a test in the morning under a man’s name and then again in the afternoon under a woman’s name.  Continue reading →

The magnificent Josephson Institute released the results of its bi-annual survey on the ethics of high school students.  An exemplary study that has helped guide us since 1992, Josephson’s work has been tireless and helpful.  However, this year’s results are puzzling.  According to the data, the number of high schools students who self-report cheating,  a figure that has hovered at between 59% and 65% since 1992, has dropped to 49%. The Barometer hopes the figure accurately reflects what is happening and that, as Mr. Josephson notes, “this is the beginning of a downward trend.”  Indeed, the Barometer hopes that it is indeed the work of the “Character Counts” program that is brining these stunning results.  That ethics training helps is music to the Barometer’s ears. However, there are several questions that bring uneasiness: Continue reading →

Oh, dear Secretary Panetta, save your money!  Three words for your generals:  David and Bathsheba.  Read the story.  Understand the story.  Hubris, power, and women.  If you have the first two, stay clear of the third.

The House Financial Services Subcommittee on Oversight and Investigations has finished its report and concluded that MF Global executives, including former CEO John Corzine, created a chaotic atmosphere with lax controls.  In short, this firm was a financial mess, but messy, sloppy, and chaotic are the stuff of incompetence, not criminal charges.  That’s a shame because the sloppy and lax pot stirrers seem to move from company to company, cutting a wide swath of destruction with the exit line of, “Who knew?”

There is no limit to the imaginations of teachers and principals when it comes to reaching goals on test scores. El Paso is grappling with a cheating scandal that is far more creative than the folks in the Atlanta public schools, who, like mere mortals, simply altered the answer sheets.  El Paso officials singled out certain students to keep out of the classroom on test days.  A call or a visit from a truant officer would come with the instructions that your child needed to stay home on test day. Continue reading →

Professional chess is having difficulties finding corporate sponsors for its champion matches because of cheating.  Bathroom breaks and smart phones appear to be
at the heart of the matter.  Chess players are using both to check resources for their next possible moves. One accused player has refused to let chess officials check his phone. Invasion of privacy, saith he.

Monitors for the bathroom breaks?  Banishment of cell phones from the kingdom?  Where’s the sport in using an app to play? Last year, the sumo wrestlers had their scandal.  This year, the mighty sport of chess. Oh, what times are these! Continue reading →

Edith O’Brien (Edie), the former assistant treasurer at the former MF Global Holdings Ltd. The bankrupt firm, was run into the ground by former senator, governor, and Goldman Sachs chair, Jon Corzine.  Ms. Bryant is an interesting soul.  She has taken the Fifth when asked to testify about her role in transferring funds to meet shortfalls.  However, her lawyers have made an offering of proof in exchange for her immunity, but the government has said she is not a target.  She has worked Continue reading →