Black & white fever: the state of business ethics; Ethics programs have been implemented widely in recent years, but there's still widespread skepticism about how well they are working. And, building a viable ethical culture inside a company is still a daunting challenge.

• Author: Millman, Gregory J.
• Position: Ethics

Tone at the top has long been a mantra in discussions of business ethics, but apparently, tone at the top isn't enough. In an era where the average CEO tenure is five years or less, what's needed may be more tone that resonates at the bottom and in the middle.

"I've been working in corporate accounting for 40 years, and I've found a lot of cheating and stealing that's gone on, but never at top levels--never," insists Bryan Roub, senior vice president and CFO of Harris Corp. and a former Financial Executives International (FEI) chairman.

Prosecutors usually target the heavy hitters at the top, of course. What about the bottom? There's been a 7 percent drop since 2003 in "the evaluation of employee performance based on ethical conduct" and only a 4 percent increase in the disciplining of employees for breaking ethical standards, according to a study released last fall by the Ethics Resource Center (ERC), a nonprofit organization dedicated to the study of business ethics. In economic terms, it seems that that the personal costs to business people, especially those below top management, who break ethical rules may be falling.

Yet, if ethics programs are any clue to how ethical business is, it should be the most ethical institution in society. The ERC's 2005 survey--the fourth iteration of its National Business Ethics Survey since 1994--showed double-digit increases in the use of ethical codes, ethics training programs and ethical information channels by business over the past decade. The problem is that the codes, programs and channels don't seem to have made business much cleaner.

Says ERC President Patricia J. Harned, "If you're looking at whether employees are behaving better than five years ago, we have not seen those outcomes changing substantially." For example, though more than half of employees have seen misconduct in the workplace, fewer than half who saw it blew the whistle and reported it to management. That's a 10 percent drop from the previous survey, and puts the whistle-blowing level as low as it was in the year 2000, just before the sleaze dam burst and the dirty truth about Enron Corp., Tyco International and other business frauds, cheats and scams gushed into the headlines.

Some critics say that the only way to break business from its allegedly bad ethical habits is to keep beating up on it. "The problem we have here is there are relatively few prosecutions," says Richard Cebula, Shirley and Philip Solomon's Eminent Scholar in the economics department of Armstrong Atlantic State University in...