| Tue, 05/04/2010 - 9:10am | |
| Erica O'Grady | Joe Smith, a fellow CCIFP, was recently hired to be CFO of a large construction company named XYZ. Joe had previously worked as Controller for a small mid‐western contractor that was struggling to keep the doors open. The president of XYZ thought highly of Joe and offered him a compensation package higher than the industry norm, in addition to paying moving expenses to move his wife and four kids across country. Three weeks into the job, Joe overheard a discussion between the President, the VP, and some of XYZ’s clients. The discussion implied illegal activity including collusion and kickbacks. Joe asked the President about the discussion and he replied, “This is how the construction industry works in this city, if you don’t play the game you can’t survive.” Joe was shocked. During the interview process, the company had showed Joe its ethics policy and explained that integrity was one of its core values. Joe felt betrayed and did not want to be associated with a company that tolerates such activity. He made up his mind to leave XYZ, but he decided to find another job first so he could be sure to provide for his family. Two months have gone by and Joe has been unable to find any job leads considering the difficult economy. Joe calls you for advice. Do you have an ethical obligation to advise Joe in a certain way? Is there a duty on the part of either party to report XYZ to authorities? Do you have an obligation to report Joe to ICCIFP for a violation of the Code of Ethics if he continues to tolerate illegal activity at XYZ? Since you are not directly involved, do you have any ethical obligations? How relevant is the condition of the economy when making ethical decisions? What would you do if you were in Joe’s position? |
| Thu, 05/06/2010 - 11:22am | #1 |
| Dana Jensen | Erica, You ask a number of good questions; but I'll try answer none of them because I've got one of my own. We get the impression that Joe has done a reasonable amount of due diligence prior to accepting the position. What, if anything, could Joe have done in the hiring process to give himself a fall-back position? |
| Wed, 05/05/2010 - 1:26pm | #2 |
| John Corcoran | Joe should read the article that appeared in "BUilding Profit" a couple of years ago regarding the impact on a CFO in an unethical situation. He should "get out of Dodge" ASAP. |
| Tue, 05/04/2010 - 12:41pm | #3 |
| John Dees | This is an interesting presentation of the classic "being as ethical as one can afford to be". I think there is not only an ethical consideration but a real risk of criminal liability if there are payments to officials to acquire contracts (especially for a CFO). I think it would take more evidence than an overheard conversation to report to authorities (either ICCIFP or civil) and certainly more than a casual conversation with a friend for the other. But I suspect Joe will see evidence in short order that will require such a disclosure. He needs to find a way out of there soon. |