What Are Some Examples of Bad Business Ethics?
Examples of bad business ethics include criminal activities such as fraudulent accounting practices, tax evasion, larceny and securities fraud, according to Forbes. There are also bad business ethics that are not criminal acts but can lead to civil penalties, such as falsifying a performance review, notes Scott Thompson of Demand Media.
Fraudulent accounting practices are intentional manipulations of accounting rules, according to Forbes. A high-profile example of accounting fraud is the 2001 Enron scandal, where a group of high-ranking company officers manipulated accounting data to mask Enron’s massive losses and significant liabilities. This false data inflated Enron’s stock price, profiting the company officers who perpetrated the fraud.
A notorious example of tax evasion is the 2002 case of former Worldcom CEO Bernard Ebbers. Ebbers took payments from Worldcom that were disguised by fraudulent accounting, allowing him to avoid personal income tax. He also sought personal gain by attempting to increase Worldcom’s stock price with fraudulent claims, according to Forbes. Also in 2002, Dennis Kozlowski, a former CEO of Tyco International, committed both larceny and securities fraud when he raided company coffers to pay for personal luxuries, such as lavish parties and jewelry.
Though falsifying an employee’s performance review is not criminal, it can land a company in civil court, as often occurs in cases of illegal discrimination, retaliation, libel and defamation of character, according to Thompson. Supervisors writing performance reviews should avoid unnecessarily subjective or factually inaccurate statements.