Do Ethics And Consulting Mix? Article - Business Ethics Articles

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Do Ethics and Consulting Mix?

After a string of companies failed over ethical breaches, it can be easy to forget this. The government thought we could remedy these failures through the enactment of Sarbanes-Oxley.

Author: Barry Calogero

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The answer is yes, Over the past week, we’ve learned that it is impossible to regulate business ethics in a legal sense; however this does not mean the consulting world is devoid of ethical behavior.

Over the past seven years, Huron Consulting Group has become one of the leading healthcare consulting firms and one of Fortune 100’s fastest growing companies. A recent scandal regarding accounting errors related to improper treatment of earn-out payments resulted in several top executives to resign without severance pay. Immediately, Huron’s stock price plummeted 70%, the SEC launched an investigation, and several class action suits were filed.

The question becomes, why would a successful company jeopardize everything that was built over seven years? The answer is unclear. Whether it is greed, human error, or fraud, a consulting firm that promises to manage complex accounting transactions demands a moral compass that is beyond reproach, and that is where Huron has failed its shareholders, its customers, and its employees.

Consulting firms play an important role in business. We develop strategies, improve operational processes, implement technology, change cultures, and manage accounting principles. We bring crucial, specialized expertise to make their supply chains work better, increase growth, and reduce risk. Many consulting firms act in a responsible manner, but we all get affected when a scandal hits a firm like Huron.

There are times when we as consultants need to be honest brokers. It takes guts to tell a client news that might jeopardize a project but that separates good consultants from sycophants. In consulting, our words are our most powerful tool. When a client needs to hear difficult news, or be told ‘no’ about questionable accounting transactions, that is the time culture makes a difference. They trust us to be honest. This trust is a result of transparency, open communication and accurate reporting. In the world of consulting, where a firm’s single biggest asset is its reputation; there is no room for actions like those committed by Huron.

At Tefen USA, for example, we have built a firm that is grounded in five core values: Integrity, Trust, Dedication, Professionalism, and Fulfillment. While we have not enjoyed the exponential growth that Huron has experienced, our values ensure that we are around for the long-term. In addition, they serve as a guarantee for our clients. They know our ethics are beyond reproach.

I believe it is important for clients to look beyond methodology and experience. These are the minimum requirements for being a solid consulting firm. Clients need to understand the underpinning of the firms they work with, the values they adhere to, how they enable those principles, and the strength of their conviction. This is how true value is created by consultancies. It is time for customers to start putting more weight on these traits when making buying decisions for consultant support. If they do, there is no doubt that they will never have to wake up and question the authenticity of the advice they have received. What a refreshing way to do business in consulting.

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http://www.tefen.com

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Do Ethics and Consulting Mix?