Ernst & Young Chief Ethics and Compliance Officer Visits Smith School
On Monday, October 20, 2008, Smith students learned an important lesson about
ethics: “Do the right thing, and when you are not sure -- consult.” This was the
central message from guest speaker Jeffrey R. Hoops, Ernst & Young’s Ethics and
Compliance Officer for the Americas as well as the Chief Privacy Officer. Hoops
has worked for Ernst & Young since 1974, and for most of that time advised
clients on tax matters. In 2005, he was appointed to his current role, in which
he originated the first ethics and compliance program at Ernst & Young.
“Most everyone wants to do the right thing. But in pressure situations,
it’s tempting to rationalize small ethical compromises. Unfortunately, small
lapses often lead to big problems,” Hoops told the student audience, mostly
composed of accounting majors. He spoke of his efforts at Ernst & Young to
create a culture that encourages people to do the right thing, and to consult.
“With a firm this size, it’s impossible to avoid all individual [ethical]
lapses, but you can remove systemic problems.”
Hoops demonstrated some real life ethical situations from his experience,
using students from the audience in role play simulations. He illuminated the
types of conflicts employees might face in dealing with disclosure and biases.
He also showed how the corporate structure needs to include a culture of
consultation, where employees feel comfortable raising their ethical concerns.
The highlight of the evening was a sneak peek into a new ethics training
program currently being developed for Ernst & Young employees. Hoops shared
clips of his recent interviews with David Myers, Controller at WorldCom during
the massive accounting scandal of 1999-2002. Myers was sentenced to a one-year
prison term for his involvement in the $11 billion accounting fraud, and he
spoke with Hoops after completing his prison sentence. Although Myers indicated
he was not the mastermind behind the massive overstatement of earnings, he made
it clear to all his future listeners that “doing what your boss says doesn’t
hold up in court” if your actions are unethical or illegal.
At the end of the lecture, it was clear that even in high pressure economic
times, “doing the right thing” is still the best course, both for the company’s
stability and to keep yourself out of prison.
The Smith School has been making ethics education a major priority for many
years. Stephen E. Loeb, a Smith School professor in the accounting and
information assurance department, is the organizer of the ethics lecture series.
He serves as Academic Integrity Officer for the Smith School, and has been
involved with the school’s ethics education programs for a number of years. As
Academic Integrity Officer, Loeb brings speakers on ethics issues to campus
several times a semester. Loeb has involved students in other
business-ethics-related educational experiences to reinforce the importance of
ethical business practices. In the past, the school sent full-time MBA students
to visit federal prisons, where they attended presentations by inmates convicted
of white collar offenses. Loeb used the opportunity to teach students that “when
you make the wrong decision it can have serious consequences.”
Timothy D. Lewis, MBA Candidate 2010