Birth of the Ethics Industry

For many big companies, complying with Sarbanes-Oxley (SOX)
legislation has caused only headache. But for the burgeoning ethics
industry, SOX has been the root of recent success.

James C. Hyatt reports in Business Ethics that a host
of firms are profiting from bringing corporations up to speed on
ethics.

According to Hyatt, ‘Corporations are rushing to learn ethics
virtually overnight.’ And to help with their cramming, they’re
turning to consultants who specialize in instructing employees on
laws and ethics. They’re subscribing to ‘ethics hotline services’
that allow workers to file complaints or offer tips anonymously
without fear of retribution. And they’re gobbling up ‘compliance
management software.’ Such trends have created an ethics business
boom fueled not only by SOX, but also by corporate re-prioritizing
in the wake of the Arthur Andersen and Enron investigations.

Expansion in the ethics industry has created scads of job
openings. Hyatt’s search for the word ‘Sarbanes’ in job
descriptions listed on Monster.com turned up more than 1,000 hits.
But, as he points out, a number of the listings aren’t for
specifically ethics-related jobs; SOX legislation also dealt with
‘accounting control systems,’ so many of the slots are in the
accounting field.

On Wall Street, several firms recently hired chief compliance
officers to fill prominent roles. In the past, such officers were
typically relegated to the background of corporate culture. Now,
they’re getting pay hikes. Their increased salaries account for
just a portion of the money spent on SOX compliance. Lowballers
project that $6.1 billion will be spent by ethics-happy companies
this year alone.
— Archie Ingersoll

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Birth of the Ethics Industry

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