Ethics Group Hears of Corporate Struggles

By: Randall Turk

Transcript Business Editor

York International’s Unitary Products Division, headquartered in Norman, had serious ethical and financial problems until it was rescued by its own reforms, a York executive said Wednesday.

Becky Payton, York’s vice president of human relations, said a new chief executive officer, “an addict on ethics,” turned the company around and made integrity a companywide policy. “I’ve been in this business [human relations] with four companies since 1976,” she said. “I’ve seen a tremendous change in corporate ethics in recent years.”

Payton discussed the new emphasis on standards of conduct and moral judgment, and how the need for them influences business, at the inaugural meeting of the Norman Chapter of the Oklahoma Business Ethics Consortium.

Ethics, “ the conscience of the organization,” is the most complicated aspect of business dealings, Payton said. The absence of ethical considerations with previous employers moved her to make changes in her career, she said.

Payton, whose first job was with a tire manufacturer in 1976, said she was approached to deal with company’s previously poor ethics. “They wanted me to become a purchasing agent. They were firing their existing purchasing agents because of their bad ethical practices.”

She said she worked for a company in the ‘80s, “ a company with a multitude of ethical problems. The company was hiring an unethical president, and I was asked to do some things I didn’t feel were right. I quit my job with no job…You can’t be scared in those situations.”

Payton became a human relations officer with an Oklahoma division of major manufacturing corporation.

“The only way for a person to get a raise there was to threaten to quit,” she said. ”Back in the late ‘80s, that’s the way the company ran itself.”

She joined York in 1998, as human relations manager and became a vice president in 2001.

“Some terrible things had happened at York,” she said. “We lost $16 million one year. We turned that into an $80 million profit by 2004.” Company integrity is now the standard emphasized most among York’s 1,200 Norman employees, she said.

While good business ethics can increase profits, such standards can result in “making some very tough calls,” Payton said.

The Sarbanes-Oxley Act of 2002, the government’s police force for corporate ethics “ has been cumbersome and expensive for York’s, costing the company $200,000 just this year, Payton said.

The law established tougher accounting guidelines for publicly held companies and made corporate leaders liable for misstated financial reports.

The government “overdid” Sarbanes Oxley, and the costs will be passed on to consumers, Payton said. “As time goes on, they’ll get rid of some of the Sarbanes-Oxley Act. It gives companies an excuse not to do things in a creative way. But we have to protect shareholders.”

The Oklahoma Business Ethics Consortium was founded in late 2003 by Shannon Warren, a human relations consultant. The group began in Oklahoma City, and another chapter was formed in Tulsa.

About 30 attended the Norman Chapter’s first meeting, held at Moore Norman Technology Center. Luncheon meetings are scheduled the third Wednesday of the month. Information is available at www.okethics.org.

York International’s core values are now displayed prominently throughout the company, Payton said. “We have a code of conduct booklet that includes a tool-free phone number to report complaints. At first, we had a rash of reports and firings.

“We don’t have nay sacred cows at York, but it took us years.”