More Talk, More Action.

BUSINESS ethics; ACCOUNTANTS; CORPORATE governance; CORPORATE directors; AUDIT committees; CORPORATE culture

JAPAN; UNITED States; UNITED Kingdom

This article explores the effect of ethical corporate behavior on accountants in businesses as well as in not-for-profit organizations. A 2004 survey released by the Conference Board revealed several factors are behind the increased board involvement in ethics programs. The shift is one result of the implosions at Enron, Adelphia Communications, and other companies, as well as the passage of the Sarbanes-Oxley Act. In April 2003 Japanese lawmakers amended their Commercial Code to allow companies with market capitalization of 500 million Japanese yen or more to adopt a corporate governance style similar to that of the U.S. Board members must separate from day-to-day decision makers and a majority of directors must be independent. In Great Britain, lawmakers revised the Combined Code. Changes included requirements that at least half of directors be independent and that audit committees be composed entirely of independent directors who are not executives of the company. Corporate accountants can help convey the concept of an ethical corporate culture to a range of people, including the board of directors, other employees and the executive team, and help companies adopt procedures that allow an ethical culture to flourish. INSETS: EXECUTIVE SUMMARY;The Board's Role in Ethics;PRACTICAL TIPS.