Alumnus: Culture is key to business success and accountability
By Natalie Murphy
Whether you’re managing a small startup or are CEO of a global organization, corporate culture plays a vital role in ethics and accountability, according to Michael Kerner ’86.
“As current and future business leaders, the people in this room should be very concerned about the lack of trust in business,” Kerner said. “Underlining it all, you need a corporate culture that encourages the right behaviors.”
Kerner delivered his talk on the practical implications of accountability at the 28th Annual Abraham J. Briloff Lecture. Kerner, senior advisor and former CEO of general insurance for Zurich Insurance Group, addressed ethical dilemmas in the actuarial profession as well as the overarching business world.
Kerner described how business ethics should be integrated into a company code of conduct through guidelines, rules, accountability mechanisms, and systems of public and private sanctions. He also emphasized that compliance training helps employees understand the legal and ethical boundaries within which an organization operates.
“Even with the right systems and processes of business in place, you still need that last piece: a corporate culture,” Kerner said. “Culture is critical. And it’s the most difficult part of establishing an organization that embraces accountability.”
The lecture also paid tribute to Briloff, presidential professor of accounting and ethics at Binghamton University, who died in 2013. Briloff started the on-campus lecture series in 1985, bringing academic, accounting and business leaders to campus to discuss ethics in society.
“Abe’s vision and foresight had a significant impact,” said Upinder Dhillon, School of Management dean and Koffman Scholar. “We are continually reminded of the importance of this lecture as society continues to deal with ethical failures.”
According to Kerner, financial crises such as the Great Recession and Volkswagen emissions scandal could have been prevented if companies created and maintained corporate cultures with a focus on ethics.
“The culture needs to promote speaking out and speaking up early without fear,” Kerner said. “Culture – my view – is the things that happen when nobody is telling employees what to do.”
Kerner said companies must be “deliberate in establishing their culture” through public relations campaigns, internal communications and employee recognition systems. He also stressed that management activity needs to align with organizational values at all times.
With new technology and the advent of social media, Kerner said corporate ethical activity is scrutinized by government and consumers – as well as broadcasted – at unprecedented rates.
“The topic of accountability is as relevant today as it was when these lectures started,” Kerner said. “But today in business, the public and other stakeholders have both a microscope and a megaphone.”
With the intensified pressure for managers and corporations to embed and maintain ethical responsibility with their organizations, addressing accountability should start in business school.
“The role of ethics remains a focus of business education and really one of critical importance to society,” Dhillon said. “It is events such as the Briloff Lecture and the ethical thinking it promotes that make the Binghamton education special.”
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