Where does the human resources function fit into the equation?
HR is the most pivotal part of developing a sustainable ethical culture. It also deals with how you hire, how you recruit them. Performance reviews, who you promote. How you incent. Those determine everything. So it’s not just about wayward CEOs … ? Even when the CEO gets in trouble, it would be the low-level folks who are usually the executors [of] all the stuff the CEO has designed. There had to be hundreds of employees looking the other way. And when you look at most of the liability cases, whether it’s dealing with product defects, failure to report, noncompliance — these almost always happen on lower levels. They may be management, but often middle or low-level management. Much of the recent focus on ethics had had to do with backdating of options. Is that practice necessarily illegal? It probably is illegal, because if you backdate anything, it’s fraud. You say it happened on this date, and it didn’t. But that one is less of an HR issue than most, because most happened at the
