Business Ethics and Compliance Timeline

This page follows the development of business ethics through six decades, examining:

  • Ethical Climate
  • Major Ethics and Compliance Issues
  • Ethics and Compliance Program Developments

Scroll down to view the timeline or select a decade:
1960s - 1970s - 1980s - 1990s - 2000s - 2010s

1960s

Ethical Climate
Social unrest. Anti-war sentiment. Employees have an adversarial relationship with management. Values shift away from loyalty to an employer to loyalty to ideals. Old values are cast aside.

Major Ethics and Compliance Issues

  • Environmental issues
  • Increased employee-employer tension
  • Civil rights issues dominate
  • Drug use escalates

Ethics and Compliance Program Developments

  • Companies begin establishing codes of conduct and values statements
  • Birth of social responsibility movement
  • Corporations address ethics issues through legal or personnel departments

1970s

Ethical Climate
Defense contractors and other major industries riddled by scandal. The economy suffers through recession. Unemployment escalates. There are heightened environmental concerns. The public pushes to make businesses accountable for ethical shortcomings.

Major Ethics and Compliance Issues

  • Employee militancy (employee versus management mentality)
  • Human rights issues surface (forced labor, sub-standard wages, unsafe practices)
  • Some firms choose to cover rather than correct dilemmas

Ethics and Compliance Program Developments

  • Foreign Corrupt Practices Act of 1977
  • Business ethics as a discipline is in its infancy
  • Increased discussion of ethics and the importance of being "values centered" instead of merely adhering to the law

1980s

Ethical Climate
The social contract between employers and employees is redefined. Defense contractors are required to conform to stringent rules. Corporations downsize and employees' attitudes about loyalty to the employer are eroded. Health care ethics emphasized.

Major Ethics and Compliance Issues

  • Bribes and illegal contracting practices
  • Influence peddling
  • Deceptive advertising
  • Financial fraud (savings and loan scandal)
  • Transparency issues arise

Ethics and Compliance Program Developments

  • Creation of the U.S. Code of Ethics for Government Service (1980)
  • General Dynamics establishes the first business ethics office (1985)
  • Defense Industry Initiative established (1986)
  • Some companies create ombudsman positions in addition to ethics officer roles
  • False Claims Act (government contracting)

1990s

Ethical Climate
Global expansion brings new risks. There are major concerns about child labor, facilitation payments (bribes), and environmental issues. The emergence of the Internet challenges cultural borders.

Major Ethics and Compliance Issues

  • Unsafe work practices in third world countries
  • Increased corporate liability for personal damage (cigarette companies, Dow Chemical, etc.)
  • Financial mismanagement and fraud

Ethics and Compliance Program Developments

  • Federal Sentencing Guidelines for Organizations (1991)
  • Class action lawsuits (e.g., Pacific Gas & Electric, Tobacco Master Settlement)
  • Professionalization of ethics function; launch of Ethics Officer Association (EOA) in 1992
  • Transparency International releases its first annual Corruption Perceptions Index in 1995.
  • ERC conducts first national survey of state of ethics in US companies.
  • In Caremark Delaware Chancery, court rules board members can be held personally responsible for lack of oversight of organization's ethics.
  • IGs requiring voluntary disclosure
  • Royal Dutch Shell International begins issuing annual reports on their ethical performance.
  • Global Sullivan Principles (1999) engage corporations in fight for human rights and social justice.

2000s

Ethical Climate
Unprecedented economic growth is followed by financial failures. Combination of excessive risk-taking and lack of effective controls destroys high-profile firms. Personal data is collected and sold openly. Hackers and data thieves plague businesses and government agencies. Acts of terror and aggression occur internationally, including 9/11 in the US. Great Recession takes a toll on faith in U.S. economy and institutions. Workers, whose parents experienced layoffs 20 years prior, are less loyal to companies and frequently change jobs, resulting in knowledge loss and increased competition from rival firms.

Major Ethics and Compliance Issues

  • Cyber crime
  • Privacy issues (data mining)
  • Financial mismanagement
  • International corruption
  • Challenge of negotiating ethics standards of numerous cultures in increasingly global business climate
  • Intellectual property theft
  • The role of business in promoting sustainable development

Ethics and Compliance Program Developments

  • Anticorruption efforts grow: OECD Convention on Bribery (1997-2000); UN Convention Against Corruption (2003); UN Global Compact adopts 10th principle against corruption (2004)
  • Business regulations mandate stronger ethical safeguards (Federal Sentencing Guidelines for Organizations; Sarbanes-Oxley Act of 2002)
  • Stronger emphasis on corporate social responsibility and integrity management
  • Thompson Memo issued by US DOJ requires prosecutors to consider corporate ethics and compliance programs when making charging decisions.
  • Revised Federal Sentencing Guidelines for Organizations (2004)
  • Merging of ethics and compliance functions. Ethics Officer Association becomes Ethics and Compliance Officer Association (ECOA).
  • ERC research proves that strong ethics and compliance programs drive the development of ethical corporate cultures and the two together reduce ethics risk.
  • E&C field works to articulate best practices for chief ethics and compliance officers (CECOs).

2010s

Ethical Climate
Increasing distrust and cynicism of corporate America. Occupy Wall Street and growing frustration over income inequality and pay gaps between C-suite and rank-and-file workers. Unprecedented level of workplace diversity. Higher expectations for transparency from companies and corporate leaders. Millennials, largest work cohort in history, are savvy about and connected to technology and social networks; less tied to particular employee or career paths; more comfortable with diversity and with ethical ambiguities.

Major Ethics and Compliance Issues

  • Appropriate use of big data
  • Social media and networking as agents of positive change and new areas of vulnerability
  • Tension between increasing transparency and loss of privacy
  • Identifying common standards and values in increasingly diverse workplaces
  • Responsible use of technology and social media in the workplace
  • Facilitating productive relationships in multigenerational workplaces
  • Responsibility to shareholders and responsibility to larger society
  • Best strategies for hiring and retaining talented employees in increasingly fluid labor market
  • Extent to which business should be responsible for environmental sustainability

Ethics and Compliance Program Developments

  • OECD issues Good Practices Guidance for anti-bribery compliance programs
  • Passage of Dodd–Frank Wall Street Reform and Consumer Protection Act