Speech by SEC Commissioner:
Remarks at the Commission Open Meeting
Regarding Corporate Ethical Behavior

by

Comissioner Roel C. Campos

U.S. Securities & Exchange Commission

Washington, D.C.
October 16, 2002

One of my duties as a Commissioner is not only to support and implement the securities laws, but also at times to urge practices that go beyond the letter of the law. I believe that this is such a time.

I am sure that I speak for the Chairman and my fellow Commissioners in observing that it is not enough for reporting companies simply to have a code of ethics. No matter how well or beautifully the language of the code of ethics reads, if the code is relegated to the back of a policy manual or a cluttered website, it is of no use. I submit that having a code of ethics that is not vigorously implemented is worse than not having a code of ethics. It smacks of hypocrisy.

We all know that having rules in life is not enough. Indeed, if it were enough, the existence of the Ten Commandments would ensure proper conduct among human beings. For this reason, I urge all CEOs and senior management of reporting companies to live and practice on a daily basis the principles contained in their codes of ethics.

Senior management should make it clear to employees through their words and conduct that ethics matter. Senior management and boards of directors should establish practices that acknowledge and commend acts of honesty and ethical behavior.

Just as good deeds in life create unforeseen blessings, I believe it is fundamental that honesty and integrity will ultimately create business success. Creating an ethical business culture should not be viewed as a sacrifice. Indeed, it is good business to be open and honest with your shareholders. It is good business to have fair dealings with your business partners. It is good business to reward employees for being honest and ethical. It is good business to be known as a company that deals fairly in its business transactions. It is good business for shareholders to know that a company not only has a code of ethics but that the code is followed every day. It is also good business to select CEOs and Presidents largely based on their integrity and commitment to ethical behavior.

Separately and equally important is the education provided to the executives and counselors of tomorrow. I would strongly encourage business schools and law schools to elevate their offerings on ethics to a level of prominence and importance in their core curricula. Students should learn during their education that ethical conduct will be the single most important contributor to their future success.

In conclusion, if companies live and practice their codes of ethics, our nation will prosper and integrity and good ethics