The unethical behavior appeared to run rampant, which prompted public outcry and forced government intervention. In 2002 congress passed the Sardines-Solely Act in response to the publics demand to regulate the behavior of corporate executives and leaders of the financial industry. Senators Michael Solely of Ohio and Paul Sardines of Maryland had co- written the bill to enhance standards that would corporations and their employees accountable and responsible for financial practices and corporate governance (“The Sardines-Solely Act’, n. D. ).
The Sardines-Solely Act is arranged in eleven titles that established regulatory measures that include he reporting and auditing of corporate finances, changes in a corporations management, and penalties for violations and noncompliance (“The Sardines-Solely Act”, n. D In 1991 the United States Sentencing Commission established the Federal Sentencing Guidelines for Organizations (FOGS) to establish ethical guidelines and compliance programs. FOGS was designed to deter unethical behavior form corporations and their employees by encouraging business to form effective ethical and compliance programs (“FOGS”, 2012).
Consumer Financial Protection Bureau (CUFF) was established with the assign the Dodd-?Frank Wall Street Reform and Consumer protection Act 2010 in response the 2007 financial crisis (Fowler, 2013). The purpose of the CUFF is to be an independent consumer agency that receives and investigates consumer complaints about financial institutions and their products (Monticello, 2011). CUFF protects consumers from dangerous financial products financial institutions and corporations. Prior to the CUFF there was limited oversight and almost no enforcement on how financial institutions provided financial products to consumers.
The irresponsible, cackles, and unethical financial practices of many financial institutions, such as predatory lending, led to a global financial crisis beginning in 2007. CUFF collects, investigates, and enforces regulations pertaining to financial products (Monticello, 2011). The implementation of legislation, stricter enforcement, and formation of a government agency to regulate financial institutions and corporate governance has been beneficial in improving ethical practices.
Hanna (2014) quotes Cravings assessment of the Serbian- Solely Act as providing more information about companies so better assess heir financial standings and managerial process, and that the means of testing those measures is becoming more cost effective. The FOGS has provided guidance and regulatory measures which have, which have helped deter many corrupt corporate practice for the past twenty years (“FOGS”, 2012). Consumers who in the past had no strong advocate against aggressive and predatory financial institutions no can report abuses and dangerous financial products to the CUFF.
In a 2003 publication “Corporate Meltdown” C. Conrad cites three reason that led corporations to be involved in unethical behavior; free market individualism, the new economy, and the CEO as the secular savior (Govern, 2008). For decades corporate leaders understood and felt that their ethical and social responsibility was to make their organization profitable. This drive to create wealth for themselves, and/or their organization led them to make decisions that ignored, and excluded ethical practices.
These corporate leaders failed to recognize their responsibilities to the organization’s employees, and the general public. When entering the twenty-first century many scholars and practitioner posed the question if we ere living in a “new economy. ” That living in a new economy would mean that rules, ethics, obligations of social responsibility of the “old economy would no longer apply (Gave, 2008). This mentality would explain why many corporate leaders felt they no longer were bound to established codes of corporate ethics in the early 20005.
Many corporate leaders formed inflated and larger than life egos flamed by their name recognition, rank, and title within their organizations. Many corporate executives consolidated their organization power in that they held dual titles such as CEO, chairman of the road, and president Of their respective organizations (Gave, 2008). Often these corporate leaders felt they were infallible and responsible to no one. This self-gerrymandering can be observed in such individuals as Martha Stewart, Ken Lay, Jeff Killing, and Bernie Beers (Gave, 2008).
The turn of the twenty-first century awakened the American public to the unethical practices and corporate corruption through a series of scandals. Law makers reacted to the misbehaver of corporate leaders by enacting legislations that established ethical boundaries and strengthened corporate oversight and enforcement. The regulatory measures have since made business practices more transparent and hold business more accountable to reduce future occurrences unethical behaviors.