Codes of Ethics as Corporate Camouflage: An Expression of Desire, Intent or Deceit?
| Published date | 01 April 1999 |
| DOI | https://doi.org/10.1108/eb025931 |
| Pages | 140-146 |
| Date | 01 April 1999 |
| Author | Robin McCusker |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 7 No. 2 — Analysis
Codes of Ethics as Corporate Camouflage:
An Expression of Desire, Intent or Deceit?
Robin McCusker
INTRODUCTION
This paper seeks to advance and explore the notion
that corporate codes of ethics are merely a form of
'camouflage' allowing corporate wrongdoing to
flourish undetected and unpunished. It argues that
the nature of corporations, the nature of law and
the nature of corporate codes lead to a negative
rather than a positive correlation between the
possession of an ethical code and ethical behaviour.
The paper addresses three main issues in connection
with the aforementioned notion. First, it examines
the failure of legislation to curb deep-rooted
behaviour patterns and notes that this failure is
exacerbated by a lack of perception on the part of
both the corporation and the public that corporations
are,
perhaps inevitably, criminogenic. Secondly, it
notes that the way in which corporations escape
detection and prosecution for breaches of govern-
ment-created legislation makes it unlikely that they
will abide by, and be detected for a breach of, a
self-generated code of ethics. Finally, utilising an
ongoing survey of businesses in the UK, it demon-
strates that the creation, dissemination and imple-
mentation of corporate codes of ethics are not
conducive to the successful operation of that code.
WHAT IS THE PURPOSE OF CODES
OF ETHICS?
There is, this paper suggests, a degree of naivety
concerning the benefits of codes of conduct for an
organisation, and ultimately for the public that the
corporation impacts upon. Such naivety rests upon
the notion, propounded or implied by some, that
an ethical code makes an unethical company ethical
(or at least accountable for not being so), or an ethical
company more ethical. For such a situation to obtain,
a process of what might be called 'ethical osmosis'
would have to occur, in which 'unethical' behaviour
was transmuted into 'ethical' behaviour by the simple
expedient of adopting a corporate code of conduct. It
might be tentatively suggested at this juncture that
many in the criminal fraternity operate under a
self-
regulated and strictly enforced (if unwritten) code
of conduct. One would be unlikely, however, to
conclude that the Mafia, for example, was an ethical
organisation in consequence.
In reality, one would arguably be as successful in
rendering an unethical company ethical (through
the introduction of a code) as one would be in
rendering an alcoholic sober by denying him/her
alcohol. A rudimentary appreciation of human
behaviour would recognise that in both instances
the party would have to want to alter their behaviour
patterns. Certainly, one might be able to convey a
perceptual change in attitude or conduct but the
reality of that conduct (which is ultimately of greatest
importance) will remain unchecked and will, in times
of pressure, resurface.
In short, codes of conduct should reflect a cor-
poration's actual behaviour, and not (as seems to be
the case) simply provide a canvas upon which a
representation of proposed or ideal behaviour can
be exhibited. A corporation should not have to tell
its stakeholders that none of its employees will, for
example, offer or accept a bribe in the pursuit of
competitive advantage, any more than an individual
should have to assure other individuals of his/her
intention not to commit a crime against them. It is
simply behaviour which people generally should,
and will, go to great lengths to avoid.
This paper suggests that corporate codes of ethics
are a form of 'camouflage' — disguising the actual
conduct of companies in a perceptual haze of ethical
compliance, in which wrongdoing (however
minor) is able to flourish unperturbed and unnoticed.
There is no suggestion being made here that all
corporations deliberately use codes as such, merely
that the nature of corporations, the nature of law
and legal systems and the nature of corporate codes
and their implementation combine to render codes
and ethical conduct uneasy and unlikely bedfellows.
Ultimately, the prevalence of such codes presents
an image of conscientious self-regulation in which
the law, which would otherwise be forced to inter-
vene more frequently, is subverted. The code with
which the corporation regulates itself effectively
removes responsibility from the government to
Journal of Financial Crime
Vol 7 No 2. 1999, pp 140-146
© Henry Stewart Publications
ISSN 0969-6458
Page 140
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