This week the rating agency scandal was in full bloom before the public's eyes in Congressional hearings. It showed a colossal and appalling failure of business ethics that materially contributed to the global financial system meltdown that is now threatening to turn into global recession and that is having profound adverse impact in untold ways in the lives of tens of millions of Americans, not to mention around the world.
Is the rating agency scandal the Katrina of the business ethics industry? Is there going to be soul searching by the industry concerning how all its work, efforts, systems, studies, and conferences did not prevent the rating agency scandal; and to ask what went so wrong, and what can the industry do in order to better accomplish its mission of inculcating ethical business conduct by corporations?
For more than a year I have been pushing on the ECOA that the law undermines the business ethics industry in the prosecution of its mission in a manner that I have explicated in my writing Does the Law Undermine Business Ethics?. I have urged the ECOA to explore this with its members in the ECOA's conferences and other educational programs with a view to deciding what the ECOA thinks and whether the ethics industry can do anything about it if there is a problem. Thus far I have been unsuccessful, as I reported to ECOA members in this letter.
I hope the rating agency scandal is a Katrina for the business ethics industry that will lead to more openness on the part of the ECOA in considering my proposition that the law undermines the industry and the industry ought to take a stance on the matter.