Maybe it is the media’s tendency to unearth new chapters of the same story that fuels headlines about organizations running afoul of the law or making mistakes that harm their clients or employees. As more ethical breaches and blunders come to light, the news can be disheartening.
Yet there have been many positive, if unheralded, moves in recent years. In the nonprofit world, for example, colleges and universities — DU included — are adopting new best practices or improving existing ones in a number of arenas. They go beyond the standards of fiduciary conduct required of public corporations by the Sarbanes-Oxley Act of 2002, which enhanced financial disclosure laws and mandated tighter controls over auditing of public corporations. Even more than the new federal law (which doesn’t apply to nonprofits), the will to do the right thing is responsible for the moves that universities like DU have made.
The trend is gaining momentum. In a recent national survey of more than 450 four-year colleges and universities, just under half had an institution-wide ethics or compliance program in place, while nearly 80 percent felt they should have such a program.
Last year, DU’s Board of Trustees approved two new policies and updated another. One of them spells out the rigorous process for certifying departmental financial reports.
Managers must now “sub-certify” in writing that each report has been carefully reviewed. Then, the senior business officer, the controller and I formally certify the University’s financial statements, which are distilled from the departmental reports.
New guidelines also are in place regarding conflicts of interest. Every trustee, officer, dean and director must complete the University’s conflict of commitment and interest disclosure annually. The Board of Trustees’ audit committee and I ultimately review all disclosure statements. Conflicts of interest can arise when any University official or employee has a significant financial interest in, or a consulting or employment arrangement with, another business that receives funds from or provides goods or services to DU.
Our focus on best practices goes beyond matters of money and accounting. The University’s compliance and auditing staff methodically combs through our practices and advises improvements in safety, efficiency, record keeping and property management.
It is a lot of work. However, just as corporations are accountable to their shareholders, the University answers to students and parents, faculty and staff, alumni and donors. Showing them that we are acting with integrity and doing everything possible to protect the University is the right thing to do.
Beyond assuring them that our own house is in order, these practices constitute an important source of trust — the foundation of every lasting relationship. They are also compatible with our institutional character, which places notable emphasis on ethics and integrity.
Of everything our students learn here, ethics and integrity matter most. It is gratifying to see the University of Denver becoming known for exactly that. For example, the focus on ethics is one of the factors the Wall Street Journal used to rank our Daniels College of Business among the world’s top five schools for producing graduates with high ethical standards.
Some people question whether ethics and integrity can be taught. I believe the answer is yes, but only when the culture of the institution is consistent with what it teaches. At DU, faculty and staff model ethical behavior and integrity in their interactions with students, and the University practices the same in its interaction with the larger community. It is our intention to graduate students whose ethical standards and integrity set them apart and prepare them to make a difference in an imperfect world.
As always, I welcome your comments.