Here's a suggestion for the government's upcoming economic bailout package. It won't require special appropriation beyond what congress has already approved; it won't set up bad precedents for the future; and it will encourage the right kind of economic behavior.
Get ethical!
Alex Brigham is the Executive Director of the Ethisphere Institute, a research, rating and media organization designed to develop, drive and reinforce profitable ethical business practices, www.ethisphere.com. In a recent article, (http://foxforum.blogs.foxnews.com/2009/02/08/brigham_obama/), he pointed to the waste in government spending that comes from poorly supervised government contracts that go to people with political connections and lobbying ability rather than those with the best economic outcomes for the public. He estimates that more than 50% of government contractors can't show compliance with even the most basic ethics requirements of the government's contracting laws. If the waste is only 10% of this 50% it still comes to more than $18 billion.
That's a lot of money.
However, it's already the case that companies actively engaged in federal procurement and contracting, particularly those who receive contract awards in excess of $5 million, have to develop and maintain compliance plans, business ethics training, and related internal controls under rules that amend Parts 2, 3 and 52 of the Federal Acquisition Regulations (FAR).
Every organization actively engaged in federal contracting! So the 50% who can't point to their interal controls are out of compliance and shouldn't be receiving federal contracts.
How about if some of the economic bailout money went into investigation and compliance programs. It probably wouldn't cost $18 billion, and with the improved efficiency and ethical compliance it would probably end up being cost neutral if not revenue positive. Even if it wasn't, it would be a positive step toward getting organizations to what they are supposed to be doing anyway.
That would be a good use of the money, and probably one of the better bailout measures.
Of course, if you want to be ahead of the game, you could make sure you have your ethics and compliance program in place, (including your code of conduct, internally publicized reporting hotline, internal control system that prevents violations of law, periodic reviews, and procedure for self-disclosing of violations). I'm sure you can find a consultant who could help you with that.
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