Business And Ethics Can Coexist, Sec Official Tells Cda Crowd

With a third of the nation’s wealth invested in the stock market, it’s critical that corporate leaders practice the highest ethics, said Lynn Turner, chief accountant for the Securities and Exchange Commission.

Ordinary Americans have entrusted their hard-earned savings to the market.

And they’re counting on it for their retirement, he noted.

That’s why incomplete earnings reports and early leaks to analysts are so disturbing, Turner told executives at the Coeur d’Alene Resort.

“It’s an incomplete picture for the very people you’re working for - your stockholders,” he said.

Turner spoke at a business ethics forum sponsored by Gonzaga University. The three-day forum, which drew about 80 executives from around the region, ends today.

Turner cited surveys indicating that chief financial officers are often asked by business executives to misrepresent financial figures. Other CFOs are asked to use accounting rules to put a better spin on the numbers, he said. Both instances are disturbing, Turner said.

“When a new graduate goes to work and sees the CEO and CFOs managing the numbers, that graduate has learned a lesson,” he said.

“We teach the future business leaders of this country that nods and winks are acceptable.”

In response to audience questions about Social Security, Turner said he had a “gut instinct” that the nation’s retirement fund should be invested in the stock market.

However, difficult issues would have to be resolved before such a scenario could take place, he said.

Turner opposes government management of stock market funds - given the potential for political influence through campaign contributions and political action committees. Yet, if individuals are allowed to invest their future Social Security payments, there’s no guarantee their funds will provide earnings when they need them, he said.

Gonzaga officials are planning to make the business ethics forum an annual event. It is part of an effort to elevate the discussion of ethics in the community, said Leonard Doohan, dean of GU’s graduate school and conference coordinator.

“Years ago, people saw business’ role primarily to maximize profits for the benefit of the stockholder,” Doohan said.

“Nowadays, there’s a different approach,” he said. “People understand they need to be responsible to their customers, to their employees and to society.”