People Must Find Moral Compases

DON GEHRING We find ourselves in the worst economic crisis since the Great Depression. It is the economic equivalent of 9/11. Most assuredly, there is plenty of blame to be shared by both government, for its failure to provide adequate oversight, and the private sector, for its catastrophic bad judgment and greed.

While that much is clear, solutions to the crisis we find ourselves in are much less clear. Reasonable minds differ on the Obama administration's stimulus package. The economic "experts" are all over the lot in terms of their "solutions." For the average American the complexities of our economic system are befuddling and arcane. In fact, most of us are still reeling from the reality of what we have lost over the past several months. We are afraid to open our financial statements because we have come to expect only bad news.

How do we move forward from here? Obviously we have to jump-start the economy, get credit flowing again, and restore a sense of trust in the economic system. That is, of course, easier said than done. No one, despite protestations to the contrary, has a tested roadmap out of this very complicated economic quagmire. But before we leave the solutions to the politicians and economists, let's focus for a minute on what got us into this mess and what commonsense changes can help get us out of it and keep us out of it.

WHAT GOT us here is unbridled greed, credit decisions and practices not grounded in prudent and time-honored business principles, and a disregard for stockholder and employee well-being. In short, the moral compass was lost -- or perhaps more accurately, thrown away. Unless we effect a fundamental change in corporate culture and values, no stimulus package will have lasting positive impact.

No meaningful change can begin until accountability is restored. Accountabiity has to be fully embraced by the corporate community. And how is that accomplished? First and foremost, boards of directors have to do more than collect a check and stock options. It is their responsibility to make sure an incentive system is in place that rewards honesty, ethical conduct, and profitability equally. Profits cannot be earned at the expense of unethical or borderline illegal practices.

Boards have to hire executives who share these values and who will hold their own executive teams to the same standards. And they have to make it clear that they will not tolerate or reward leaders who do not meet these standards. This is the kind of change in corporate mentality and culture that will lead not only to long-term financial stability and growth, but also to a rebirth of public confidence, which is sorely needed.

There is also a critical role for our colleges and universities to play. At a minimum, every institution of higher learning should have an ethics graduation requirement for undergraduates, graduate students, and first professionals, i.e., medical and dental students. The more students are exposed to ethics training, the more likely it is that their decision-making will be properly grounded.

WHILE WE can hope that government officials and agencies will approach their regulatory and oversight functions with renewed vigor, it is quite often true that government rules measure the extent of transgression more than actually prevent prohibited conduct. Taken seriously, a change in corporate values and reward systems can have a dramatic positive effect on this country's economic vitality.

At the end of the day, maybe at least part of the solution to our current financial crisis is much less complicated than it appears. It's time to find the moral compass and use it. --- Don Gehring is VCU's vice president for government relations and health policy. He can be reached at .