Jerry Landers, the Vice President of Business Development for Aspire Indiana, makes some very interesting remarks about corporate America in a recent blog post. He refers to recent controversies like Enron, WorldCom, and most recently Lehman Brothers. He talks about ineffectiveness of the Sarbanes-Oxley Act, an act put in place after the Enron scandal to increase transparency in a corporation thus to put accountability on the shoulders of the administration. The problem is that Lehman Brothers went bankrupt after the act was passed which shows that it did not accomplish the thing it was supposed to in the first place. What Jerry Landers proposes is that the corporate culture must change. Corporations are so afraid of accountability and its effect on the future of their stock. Therefore, the only way for corporations to become truly responsible is for them to actually want to be accountable for their actions and operations. However, how does one accomplish this? Landers suggests having corporate compliance officers that only report to the board of directors, but what about the actual administration of the corporation? In my opinion, the accountability of the corporation rests in the hands of the administration as much as the board of directors because they ultimately are the ones making executive decisions that effect the shareholders alike.
The main issue lies in the method of causing this change in corporate culture. Corporations are large expensive systems that continuously gain and lose capital depending on the situation, but if a corporate executive and other admins are ever able to avoid debt, how would you convince them not to? It would be like asking someone to start hating money. Though it is very difficult, I feel that the only way the corporate culture will change would be if they are forced to due to some form or legislation. Accountability is such an important component to social responsibility in a corporation, but change will not occur overnight. It must be forced upon the corporations or else they will continue cutting corners when they are in the dark.