French rogue trader Kerviel found guilty,

This paper will focus on the ethical ramifications surrounding the case of one Jerome Kerviel, who worked for the French bank, Societe Generale.   Kerviel was recently sentenced to five years in prison and fined $6.75 billion in damages on charges of: forgery, breach of trust, and unauthorized computer use.   The business ethics problem in this case was that Kerviel made risky, negligent trades with the bank’s money ($61 billion worth) without the bank’s knowledge.   Kerviel claims his superiors were aware of all his trading and that they covered for him.   He further believes that his managers made a lot of money off his trading, and therefore, allowed the risky transactions to occur.   Societe Generale denies having knowledge of his actions.
In thinking about the ethical dimension of this case, I found it helpful to use the “Ethics Check”, as described by Blanchard/Peale in their book, The Power of Ethical Management.   The first question asks, “Is it legal?”   In this case, it is not.   The second question asks, “Is it balanced?”   In this case, no again because the bank lost so much money.   The last question asks, “How will it make me feel about myself?”   I can’t imagine any of the parties involved in this case feel proud of themselves.   So now that we know an ethical problem is established, there may be a solution.   On the company level, a Code of Ethics policy should be in place for all employees to adhere to.   Because companies compete with other companies, they must find a way to get competitive results while maintaining ethical principles.   To do this, I would implement Blanchard/Peale’s “Five P’s of Ethical Power”, which are core principles in ethical decision-making.
The first “P” is Purpose – “something toward which you are striving.”   Purpose in organizations is the vision of the organization from the top.   In crafting a solution to Societe Generale’s ethical problem of rogue trading, I would have the...