Question

Explain several ways that companies ‘walk the walk’ and ‘talk the talk’ when it pertains to corporate environmental issues.

Answer 1

Solution

Companies must vigorously instill an exemplary code of conduct at every level, not only because it’s right to do so, but — in the current political environment in which governments and their regulatory agencies are becoming increasingly aggressive and less tolerant of violations — it’s simply good business. Companies must not just talk the talk; they must walk the walk by implementing strong internal controls and establishing an ethical environment for conducting business. We have seen — with Enron and others — how quickly an unethical environment can destroy value for innocent stakeholders, as well as how swiftly a company can crumble.

The roots of a fraud rarely can be traced to a single unethical individual operating maliciously in a vacuum. A fraud is perpetrated when that person meets a specific environment. Companies can control those environments by defining both formal and informal rules and by understanding the mostly unseen, unexplored ecology of their organization. More than ever before, that understanding is not a “nice to have”; it’s a “must have.”