Source: Diane Swanson, 785-532-4352, swanson@k-state.edu or dswanson6@cox.net
http://www.mediarelations.k-state.edu/WEB/News/MediaGuide/dswansonbio.html
News release prepared by: Keener A. Tippin II, 785-532-6415
Wednesday, September 14, 2005
K-STATE PROFESSOR SAYS CONSUMERS SHOULD RETHINK ROLE OF BUSINESS, CORPORATE LEADERS IN WAKE OF WESTAR CONVICTIONS
MANHATTAN -- The convictions of former Westar Energy executives David Wittig and Douglas Lake for looting the utility of millions of dollars should cause members of society to rethink the role of business and the kind of corporate leaders they want to be in charge of our scarce natural resources, according to a Kansas State University business ethics expert.
Diane Swanson, a K-State associate professor of management and von Waaden business administration professor, said it is particularly distressing to consider the facts of the Westar case, given that energy is essentially a public good and therefore in need of special protections and stewardship.
"The case of Westar is not about the pilfering of a firm that sells a luxury good to the top strata of society," Swanson said. "It involves a commodity needed for the basic functioning of all in society. In that respect, this case is particularly troublesome."
Wittig was convicted on 39 counts of federal violations for conspiracy, wire fraud, money laundering and circumvention of internal controls. Lake was convicted on 30 of the 39 felony charges filed against him.
Each was charged with one count of conspiracy, 14 counts of circumvention of internal controls, seven counts of wire fraud and 17 counts of money laundering. Lake was acquitted of one count of circumvention of internal controls, one count of wire fraud and seven counts of money laundering.
Swanson, who is spearheading a national campaign to emphasize the importance of ethics in business education, said that as society considers the proper role of corporations, it must also consider the role of top executives.
"A true steward not only conserves scarce resources and directs them to their proper ends, but he or she also gives back to society," Swanson said. "Sadly, this sentiment has been lost over the years. Business schools bear some of the responsibility for this, as even in the aftermath of the corporate scandals many have cut back on ethics courses or are resisting the idea of adding even one course on ethics or corporate social responsibility to the curriculum. In this way, the message of greed and selfishness gets perpetuated among business students and in society at large."
According to Swanson, business scandals such as Westar, Enron, WorldCom, Adelphia, Tyco and Arthur Andersen, are "sad" in that they have caused the public's faith in business to decline dramatically. She said perhaps an even bigger scandal is that business schools at large have not stepped up to the plate to do their part in educating future business leaders in their responsibilities to society.
"The most recent statistic I have seen is that only one-third of accredited business schools offer an ethics course -- and presumably even less require students to take one," Swanson said. "This, too, should be a headline in newspapers across the nation. Business schools should stand trial along with the convicted executives.
"I hope that Westar is now on the right track, given the stakes for the public, but I also hope for vigilant government oversight," she said.
Swanson believes that one of the lessons of the last wave of corporate scandals is that a countervailing check on business is needed.
"Business operates with power and privilege because society grants it special standing to do so," she said. "Part of the arrangement is that proper oversight is needed so that the public good, not vested interests, is served."
