Ethical conduct: what financial executives do to lead.

• Author: Militello, Frederick
• Position: Financial Leadership

TWO IDEAL PORTRAITS OF ETHICAL BEHAVIOR EMERGED FROM A NEW REPORT BY THE FINANCIAL EXECUTIVES RESEARCH FOUNDATION: THE "ETHICALLY INTELLIGENT FINANCIAL EXECUTIVE" (EIFE) AND THE "ETHICAL INTELLIGENT FINANCE ORGANIZATION" (EIFO).

Today's so-called "crisis" of accountability or financial integrity has been met with a flurry of laws and regulations designed to restore public confidence in corporations. Likewise, many financial institutions and some corporations seem to be trying to outdo one another in announcing new policies demonstrating their commitment to integrity and ethical behavior.

Yet, a new Executive Report by the Financial Executives Research Foundation finds that the vast majority of corporations and financial executives express strong beliefs that ethical behavior and financial integrity remain the rule of the day. Rather than believing that investor confidence can be restored by external regulation, they see the importance of "staying the course" and "walking the walk" as both the ethical gatekeeper and conscience of their organizations.

In the study, Integrity-Based Financial Leadership and Ethical Behavior: A Professional Response to Meeting the Challenges and Responsibilities, financial executives from a wide range of companies openly share thoughts, insights and practices that relate to the "crisis" of financial integrity.

While the findings are vast, and at times controversial, two ideal portraits of ethical behavior emerged: the "Ethically Intelligent Financial Executive" (EIFE) and the "Ethically Intelligent Finance Organization" (EIFO).

The Ethically Intelligent Financial Executive

He or she is aware of the multiple pressures that may potentially impinge upon the maintenance of one's integrity, and is further aware of the ubiquitous presence of ethical dilemmas faced by leaders in daily business life, and takes the time to reflect upon these dilemmas.

George Boyadjis, EVP, CFO and Treasurer of American TeleCare Inc., speaks for many in the study when he observes, "So much of what we do is driven by the creation of value through increasing the speed of business--shortening time to market, accelerating growth rates, cutting cycle times, etc. But, if we as financial executives are truly focused on value creation for the enterprise, then we must also reflect on the ethics and transparency of transactions and relationships."

The EIFE is a valued business partner who actively assists the businesses in planning, development and...