News at Smith

Ernst & Young Chief Ethics and Compliance Officer Visits Smith School

Nov 03, 2008
Experiential / Reality-based Learning

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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.

Jeff Hoops (Ernst & Young) leads students in a simulation of an ethical dilemma in the workplace.

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

About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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