Teaching Ethics: Why, What, How

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Teaching Ethics Why, What, How
Prepared by L. Murphy Smith Professor of
Accounting Texas AM University For permission
to use or adapt this presentation, please contact
Dr. Smith, Lmsmith_at_tamu.edu
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Why teach ethics?

• Ineffective corp. governance at the two biggest
  bankrupt companies in U.S. history created
  incentives and opportunities for earnings
  management, fraudulent financial reporting, and
  an unethical corp. culture.
• Demand for effective corp. governance and ethical
  conduct in ensuring reliable financial info. is
  higher than ever before.
• Effective corp. governance
• assists management in better running the company
• promotes vigilant oversight by the board
• encourages active monitoring by shareholders
• promotes gatekeepers (auditors, legal counsel,
  etc.) to fulfill their roles
• improves public trust in the company

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Why teach ethics?(Yes, ethics can be taught)

• The classical economists such as Adam Smith
  considered economics a branch of ethics. Business
  activity would grind to a halt without trust,
  fair dealings, and honest communication.
• Prior research shows that students are affected
  in a positive manner by classes that include
  ethics education.
• Teddy Roosevelt said, To educate a person in
  mind and not in morals is to educate a menace to
  society.
• A nation or a culture cannot endure for long
  unless
  it is under-girded by common values such
  
  as valor, public spiritedness, respect for others
  and for the law It cannot stand unless it is
  populated by people who will act on the motives
  superior to their own immediate interest. --
  Chuck Colson, Against the Night.

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What should we teach about ethics?

• Association to Advance Collegiate Schools of
  Business (AACSB) The time has come for
  business schools to renew and revitalize their
  commitment to the centrality of ethical
  responsibility in preparing business leaders
  for the twenty-first century. Five fundamentals
  of ethics education are as follows
• Personal integrity
• Responsibility of business in society
• Ethical decision making
• Ethical leadership
• Corporate governance

Be sure youre right, then go ahead. Davy
Crockett
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Teach basics of ethics and corporate governance

• Ethical theories (e.g. Imperative Principle,
  Utilitarian Principle, and Generalization
  Argument) Absolute values (e.g. honesty,
  respect for peoples lives and property, etc.)
  trump relativistic/situational ethics.
• Corp. gov. participants must structure process to
  ensure goals of both shareholder value creation
  and stakeholder value protection for public
  companies.
• Corp. gov. mechanisms are viewed as nexus of
  contracts that is designated to align interests
  of management with shareholders.
• Three aspects of corp. gov. shareholder aspect,
  stakeholder aspect, integrated aspect.
• Corp. gov. s/b based on principles of honesty,
  resilience, responsiveness, and transparency.
• Seven corp. gov. functions oversight,
  managerial, compliance, internal audit, legal and
  financial advisory, external audit, and
  monitoring.

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How to Teach Ethics

• Lectures
• Questions, Cases, Role-plays, Individual and Team
  Assignments
• News Stories, Journal Articles, Websites (e.g.
  http//acct.tamu.edu/smith/ethics/
• quotes.htm)
• Books, Novels
• Guest Speakers
• Videos (e.g. Enron, the Smartest Guys in the Room
  use edited version Cooking the Books/ACFE)
• Textbooks (e.g. Corporate Governance and Ethics
  by Zabihollah Rezaee, Johh Wiley Sons, Inc.,
  2009. ISBN 978-0-471-73800-8).

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How to Teach EthicsLecture

• Lectures are the starting point of
  teacher-student interaction.
• Let your students know you care about ethics.
• Nothing great was ever achieved without
  enthusiasm
• Ralph Waldo Emerson.

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How to Teach EthicsLecture

• Ethics are crucial to your personal life.
• You and I were born into this world.
• One day you and I will leave it.
• What we do in-between determines who we are, and
  whether we made the world better or worse.

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How to Teach EthicsAsk Questions
When evaluating your goals and objectives, a
vital question must be asked What is your
highest aspiration? A. Wealth B. Fame C.
Knowledge D. Popularity E. Integrity If
integrity is second to any of the alternatives,
then it is subject to sacrifice in situations
where a choice must be made. Such situations will
inevitably occur in every persons life.
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How to Teach EthicsAsk Questions
Can one person make a difference? If societal
values are deteriorating, maintaining high
ethical standards in accounting and business
grows increasingly difficult. People will
undoubtedly ask, if everyone else is dishonest,
then how can an ethical person possibly succeed?
Nevertheless, the real question is, how does one
measure success? Success measured by personal
integrity and noble character satisfies the soul
far more deeply than success measured by fame and
fortune.
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How to Teach EthicsRole-play

• Role-Playing Video Presentation Teams of 6 to 8
  students will be assigned to develop an 8 to 10
  minute role-playing presentation based on
  characters, concepts, or situations related to an
  issue discussed in the course.
• Each team will be required to submit a typed
  report and videotape of their presentation.
• Your typed report should include the following
  1. A working title of the presentation (e.g. A
  Transfer Pricing Ethical Dilemma"), 4. the
  goals of the presentation (e.g. to identify
  acceptable ways to assign transfer prices).
• The class will view and evaluate your video. Both
  report and video will be evaluated for
  originality, creativity, drama/humor, technical
  accuracy(can you hear it? can you see it?), and
  educational merit.

Example of role-play assignment on the Web
http//acct.tamu.edu/smith/acct445.htm
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How to Teach EthicsWork in Teams

• Four Overarching Principles of Ethical Corporate
  Governance
• Honesty telling the truth at all times
• Resilience recuperate from setbacks
• Responsiveness timely and appropriate responses
  to stakeholders (show respect for concerns and
  interests of others)
• Transparency openness and understandability of
  disclosures
• (Source Rezaee 2009)

Teamwork DQ 9 In your own words, what is
honesty?
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How to Teach EthicsExcerpt fromHeroes and
Villains in Life and Legend(available on the
Web http//acct.tamu.edu/smith/ethics/EthicsPower
Point.htm)
Lets consider people who have most demonstrated
integrity or lack thereof Heroes and villains in
life and legend, from ancient times to the
present day.
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• Who am I?
• Known for being born in a log cabin, being a good
  wrestler, honesty, standing up for whats right,
  and not being a quitter.
• Benjamin Franklin
• George Washington
• Alexander Hamilton
• Abraham Lincoln
• Theodore Roosevelt

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Abraham Lincoln
The spirit that guided Lincoln was clearly that
of his Second Inaugural Address, now inscribed on
one wall of the Lincoln Memorial in Washington,
D. C. "With malice toward none with charity for
all with firmness in the right, as God gives us
to see the right, let us strive on to finish the
work we are in to bind up the nation's
wounds.... "
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The American Civil War
Lincoln never let the world forget that the Civil
War involved an even larger issue. This he stated
most movingly in dedicating the military cemetery
at Gettysburg "that we here highly resolve that
these dead shall not have died in vain--that this
nation, under God, shall have a new birth of
freedom--and that government of the people, by
the people, for the people, shall not perish from
the earth."
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What most made Lincoln a hero?
a. He was a U.S. President. b. He had a nice
beard. c. He led America through its most
difficult time. d. He changed the course of the
American Republic. e. He displayed virtues of
integrity, wisdom, and forgiveness.
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• Who am I?
• Known for leadership, living in ancient Greece,
  staying in good physical condition, and changing
  the course of history.
• Homer (not Simpson, author of the Iliad)
• Ulysses
• Alexander
• Leonidas
• Julius Caesar

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King Leonidas
In the Battle of Thermopylae of 480 BC, an
alliance of Greek city-states fought the invading
Persian Empire at the pass of Thermopylae in
central Greece. Vastly outnumbered, the Greeks
held back the Persians for three days in one of
history's most famous last stands. A small force
led by King Leonidas of Sparta blocked the only
road through which the massive army of Xerxes I
of Persia (Xerxes the Great) could pass.
Several anecdotes attest to the exemplary bravery
that Leonidas and the Spartans were famed for
even in the ancient world. On the first day of
the siege, when Xerxes demanded the Greeks
surrender their arms, Leonidas is said to have
replied Molon Labe ("Come and get them").
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Leonidas at Thermopylae
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What most made Leonidas a hero?
a. He was a king. b. He stayed in good shape. c.
He fought alongside his fellow Greeks. d. He
changed the course of Western civilization. e. He
displayed virtues of integrity, bravery, and
self-sacrifice.
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• Who am I?
• Known for being from Texas, courage, serving in
  the army, and making movies.
• George Patton
• John Blackjack Pershing
• Michael Wittmann
• Elvis Presley
• Audie Murphy

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Audie Murphy
Audie Leon Murphy, son of poor Texas
sharecroppers, rose to national fame as the most
decorated U.S. combat soldier of World War II.
Among his 33 awards and decorations was the Medal
of Honor, the highest military award for bravery
that can be given to any individual in the United
States of America, for "conspicuous gallantry and
intrepidity at the risk of his life above and
beyond the call of duty."
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World War II
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Audie Murphy
A huge bronze statue of Audie Murphy is the
center piece of a memorial dedicated to Audie
Murphy and veterans of Hunt County, Texas who
served in various wars. The memorial is in front
of the Audie Murphy/American Cotton Museum,
located in Greenville, Texas and very prominent
from Interstate 30.
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What most made Audie Murphy a hero?
a. He was a movie star. b. He had lots of
medals. c. He was famous. d. He was from
Texas. e. He risked his life to save others.
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To see what is right and not to do it is want of
courage. - Confucius
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At a Congressional Hearing on Accounting and
Business Ethics in July 2002, Truett Cathy, the
Founder of Chick-Fil-A quoted Proverbs 221 "A
good name is more desirable than great riches to
be esteemed is better than silver or gold."   The
truth is that fame and fortune are nothing
compared to personal honor.
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Honor is better than honors. Abraham Lincoln
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Research results
Pre- and Post-Presentation Italian and US
Student Perceptions Toward Ethics
Source Canarutto, Gheula, Katherine T. Smith,
and L.M. Smith. 2009. Impact of an Ethics
Presentation Used in America and Adapted for
Italy. Accounting Education, Vol. 18, forthcoming.
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Teaching Ethics Why, What, HowTake-Away Points

• Ethics can be taught Research shows that ethics
  education has a positive impact on peoples
  ethical perspectives and behavior.
• Ethics must be taught Teddy Roosevelt said, To
  educate a person in mind and not in morals is to
  educate a menace to society.
• A nation or a culture cannot endure for long
  unless
  it is under-girded by common values such
  
  as valor, public spiritedness, respect for others
  and for the law It cannot stand unless it is
  populated by people who will act on the motives
  superior to their own immediate interest. --
  Chuck Colson, Against the Night.
• Educators play a key role in shaping the ethical
  perspectives of the next generation.