The federal government’s National Labor Relations Board continues to probe the pitfalls of social media in the workplace.

The limits of workplace rules and of employee behavior are “a ‘hot topic’ among practitioners, human resource professions, the media, and the public,” noted acting general counsel Lafe Solomon in a recent report.

Business Ethics previously examined the NLRB’s social media approach last August.

The NLRB’s new year-end survey of 14 recent unfair labor practice cases cited several instances where employers adopted “overly broad” policies in attempting to police use of social media at work or online, even though, in some cases the discipline or discharge of an employee was legal.

Several cases arose from employee rants and protests posted on Facebook, where disciplinary steps were upheld because the worker’s behavior wasn’t considered “protected concerted conduct,” a common issue in NLRB cases.  Employees, the latest memo noted, have a “right to discuss their wages and other terms and conditions of employment, both among themselves and with non-employees.”

“Overbroad social media policies are high on the NLRB’s current enforcement agenda,” says global law firm Ropes and Gray.  The firm’s analysis said “employers who wish to restrict their employees’ use of social media must take care to specify the precise types of communications that will violate their social media policy, and avoid using broad, generic terms that could be understood to reach protected communication and activity.  This includes such commonplace terms as ‘inappropriate’ or ‘defamatory’ ……”

Just blowing off steam via Facebook doesn’t get much sympathy at the NLRB.  Consider:

--a bartender complained on Facebook that another bartender was “screwing over” customers by substituting a pre-made mix for more expensive premium liquor, and fretted that the practice could lose business.  Eventually, the complainer was discharged for using “unprofessional communication” on Facebook.  The NLRB legal staff didn’t think the behavior was linked closely enough to working conditions for the discharge to be illegal.

--a respiratory therapist at a children’s hospital, riding in an ambulance with a paramedic coworker, posted  via cell phone a Facebook message “indicating that it was driving her nuts that her coworker was sucking her teeth.”  After two Facebook ‘friends’ commiserated online, the therapist said “she was about to beat him with a ventilator,” the NLRB summary said.

The coworker complained to the company, and the therapist was eventually disciplined for that and other behavior.  The NLRB legal staff found labor laws didn’t offer her protection because “it did not concern terms and conditions of employment. She was merely complaining about the sounds her coworker was making, and was not even suggesting that the Employer could do anything about it.”

--a warehouse worker who was feeling ill was told by his supervisor that he could leave but he would be charged an attendance point; the worker completed his shift, but, from his car in the parking lot, posted a Facebook comment saying it was too bad when your boss doesn’t care about your health.  And he told a ‘friend’ who expressed support that he (the worker) thought the company was, in the NLRB’s words, “just trying to give him a reason to be fired because he was about ‘a hair away from setting it off.’ "

He was subsequently suspended without pay and later discharged for inappropriate, threatening, and violent remarks.  An HR manager said she interpreted the ‘setting it off’ remark as a threat to bring a gun to the warehouse and shoot everyone in it.  The NLRB concluded the employee wasn’t trying to initiate group action over sick leave policies and noted he had “characterized his conduct as ‘just venting.’ "

On the other hand, some Facebook discussions do fall under protection of the labor laws:

--workers at a popcorn packaging plant commented on Facebook about the behavior of an operations manager.  One said she hated the place and couldn’t wait to get out of there; eventually, one of the workers was discharged for the comments about the manager.  But the NLRB reviewers said the comments were “part of a discussion of employees’ shared concerns about terms and conditions of employment.”  The memo noted “it is well established that employee complaints and criticism about a supervisor’s attitude and performance may be protected” by the labor laws.

--a nurse at a hospital where a discharged employee had killed one supervisor and critically wounded another posted a series of critical messages online during a seven-month period.  He also criticized the hospital’s “management style” in a local newspaper and in other forums, and made a critical presentation to a borough assembly.  He was terminated. The NLRB staff found that many of the nurse’s remarks amounted to the sort of “rhetorical hyperbole” that is protected under labor laws.

And the NLRB memo criticized a number of rules for 30,000 employees at a large clinical testing laboratory, labeling the provisions “overbroad.”  Among them:

--Language that prohibited prohibited employees from disclosing or communicating sensitive, confidential or non-public information about the company without prior approval of senior management or the law department.

--A provision prohibiting use of the company’s name or service marks outside the course of business without prior approval of the law department.

--A prohibition against publishing any representation about the company without prior approval by senior management and the law department, including statements to the media, ads, weblogs and voice mail.

--A requirement that social networking site communications be made in an honest, professional and appropriate manner.

--A provision saying employees needed approval to identify themselves as the employer’s employees and that that social media comments must expressly be labeled as personal opinions that don’t necessarily reflect the employer’s opinions.

What do you do if in the stress of crisis you make the right decision, but execute it in a way that discounts the human impact -- which only makes the crisis worse?

Joe Paterno in 2006.

If you are a trustee of Pennsylvania State University, you discover that the window of mitigating flawed execution can close well before you are ready.

Although the child sex abuse crisis at Penn State erupted in early November 2011, and some steps have been taken to try and restore trust, a series of blunders persisted into January 2012 that continued to discount the emotional impact of crisis.

On January 20, 2012, Penn State trustees met and elected new leadership – the officers who had fired iconic football coach Joe Paterno by telephone were replaced. The trustees announced a series of actions that begin to address some of the very human issues the crisis has been about, including paying for victims abuse-related health costs, and employee training on reporting abuse.

Whether the trustees’ new chair Karen Peez, vice chairman of the Bank of New York Mellon, would have tried to enlist Paterno’s support in healing the wound of those anguished by his firing became a moot point. On January 22, 2012, Paterno -- considered the “winningest” college coach in football history -- died of lung cancer that was discovered after he was fired. The wound for students and alumni only deepened.

Going forward, re-uniting the Penn State community and rebuilding trust needs to be less about brand building (“We are Penn State”) and more focused on connecting, particularly with student and alumni stakeholders, around the concept of the university as a learning environment – admitting mistakes and what specifically should have been done differently. Statements like “All of us, including the board, with the wisdom of hindsight could have done things differently,” said by Peez at the trustee meeting January 20, miss the point.

There is a rich opportunity for real dialogue in small and large groups and in university-wide forums about what went wrong, beginning with what is obvious now, without waiting for the results of the five investigations underway (federal, state and internal) including:

-- Students and alumni already know that firing anyone by telephone is totally disrespectful; doing it to someone who was the face of Penn State for 46 years, with whom most had a greater emotional connection than with any of Penn State’s presidents, caused outrage. How the trustees own the mistake non- defensively (as opposed to their justification given January 18, 2011) is a teachable moment and a stepping stone to trust.

Penn State Athletics Web Site - January 23, 2012

-- While respecting all Paterno’s accomplishments, part of the teachable moment is his 2002 leadership failure. He didn’t follow up on information he passed on about a young boy potentially being sexually molested. In his only interview following his firing, it was clear Paterno hadn’t come to terms with the impact of what he failed to do. Understanding that even iconic leaders make mistakes and how mistakes can be avoided is an important discussion topic for students.

-- Saying your administration will stand for transparency and communication to move the Penn State community forward raises expectations you will deliver on it. President Rodney Erickson (promoted from provost to president after Graham Spanier was fired with Paterno) hosted “Town Hall” meetings attended by over 1,000 alumni earlier this month. However, their value was severely compromised when, to the irritation of alumni, he deferred the bulk of their questions, which were about Paterno’s firing, to the trustees who weren’t represented at the meeting. One alumnus commented,  "the guy that’s taking the bullets is not the guy that we need to hear from. It’s the trustees. It speaks volumes that he’s up there and they’re not."

To pass through the crisis successfully, it will be essential for the trustees, the administration, students, faculty, staff, and alumni to own the crisis without PR equivocation. During the “Town Hall” meetings, Erickson told alumni that it “grieves”  him when people talk about "the Penn State scandal." He said it should be called, “the Sandusky scandal,” after the former PSU football coach now facing more than 50 charges of child sex abuse.

Like it or not, Penn State has become another learning lab for crisis and its aftermath. It may be a year or more before the findings of all the investigations on what went wrong are concluded. The criminal trials – Sandusky’s for sexually molesting minors and two former Penn State administrators’ for perjury and failure to report child sex abuse - haven’t started yet.

In the meantime, Penn State has the opportunity to wrestle with important questions that can define whether it will become stronger because of the crisis: questions like what priority to place on the human impact (emotional intelligence and how respect and compassion play out); what is meant and expected by ethical behavior and compliance; what was there about the culture that made the crisis possible;  how to measure the football culture’s impact on the rest of the university; and how to tolerate discomfort with unflattering headlines while the focus is on trust building, not brand building.

Photos: Joe Paterno on sidelines in 2006 via Wikimedia Commons; Paterno on GoPSUsports.com.

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a thought leader on building leadership, trust, and reputation and writes The Week in Ethics.

The good news is that on-the-job misconduct by American workers may be at an all-time low, and when misconduct is detected it’s likely to be reported by co-workers.

The bad news is that whistle-blowers are being retaliated against for their truth-telling at a “shocking” rate – suggesting a “looming ethics downturn” for U.S. businesses.

Those are the primary conclusions of the seventh National Business Ethics Survey (NBES) conducted by the Ethics Resource Center, a Washington, D.C.-based non-profit organization.  The bi-annual report is based on telephone and web responses from 4,683 employees of for-profit organizations during September 2011.

The percentage of employees who witnessed misconduct at work fell to a new low of 45 percent last year, according to the survey, compared with 49 percent in 2009 and a record high of 55 percent in 2007. The leading types of misconduct cited were misuse of company time (33%), abusive behavior (21%), lying to employees (20%), company resource abuse (20%) and violating company Internet use policies (16%).

And those who reported the bad behavior they saw reached a record high of 65 percent, up from 63 percent two years earlier and 12 percentage points higher than the record low of 53 percent in 2005, according to the survey.

However, while reporting was up, the survey found that retaliation against whistle-blowers hit “alarming levels,” with more than one in five (22 percent) experiencing some form of retaliation in return.  That compares with reported retaliation by 12 percent in 2007and 15 percent in 2009.

According to the survey, these were most common forms of retaliation:

Source: Ethics Resource Center - 2011 National Business Ethics Survey

In addition, the survey found, the percentage of employees “who perceived pressure to compromise standards in order to do their jobs” climbed five points to 13 percent, just shy of the all-time high of 14 percent in 2000.

“While most U.S. workers are currently ‘doing the right thing’ by following company standards and reporting wrongdoing when they see it, we see trouble ahead,” said ERC President Patricia J. Harned, Ph.D. “Retaliation against whistleblowers and pressure on employees to compromise their ethics standards are at or near all-time highs. These are factors that historically indicate that American business may be on the cusp of a large downward shift in ethical conduct.”

“The data make a very clear case that if business leaders will take heed of these findings and make ethics a business priority, they can have a dramatic impact on the conduct of their workforce. Risks noted in this report can be mitigated,” said Dr. Harned and former Congressman Michael Oxley, now chair of the ERC board, in introducing the survey findings.

Economy and Social Media

To help explain the “co-existence of widespread retaliation and pressure with historically low mis­conduct and high reporting,” the NBES cited two factors: the sluggish U.S. economy and employees who use social media while on the job.

“Thirty percent of employees agree that bad actors in their company are laying low because of fears about the recession,” the survey reported. “As the economy gets better – and companies and employees become more optimistic about their financial futures – it seems likely that misconduct will rise and reporting will drop, mirroring the growth in pressure and retaliation that have already taken place and conforming to historic patterns.”

As for social networkers, the Center found that 11% of the respondents identified themselves as “active social networkers”– meaning they spent 30% or more of their workday on social networks, even though that was not part of their job – while another 29% of workers devoted at least 10% to 20% of their workday to social networking. A surprising finding to the survey analysts: more than half (51%) of the social networkers identified themselves as “top or middle management.”

The survey reported: “A surprising and worrisome divide exists within the workplace between employ­ees who spend substantial time on social networks and those who do not. Active social networkers report far more negative experiences in their workplaces. As a group, they are much more likely to experience pressure to compromise ethics standards and to experi­ence retaliation for reporting misconduct than co-workers who are less involved with social networking.”

However, the survey found, active social networkers also “show a higher tolerance for certain activities that could be considered questionable.”  Among active social networkers, for example, 50 percent said it is ac­ceptable to keep copies of confidential work documents in case they need them in their next job, compared to only 15 percent of their colleagues. And 46 percent of social networkers said it is acceptable to take work software home to use on a personal computer, compared to only 7 percent of their colleagues.

December 2011 brings to a close the official commemoration of the 50^th anniversary of the Freedom Riders.  While tolerance, justice and equality in American life and globally continue to beg for champions, the culture the Freedom Riders created offers inspiration on ways people can work together to foster change in society as well as organizations - using mutual respect and support to create a spirit of community united by common purpose, ingredients also found in common purpose companies.

The Freedom Riders were primarily college students, with a mix of clergy, teachers, artists, journalists, housewives, civil rights activists, and many other professions. Like other movements, a cross section of races, ages, and geography.

The distinguishing common denominator here for Freedom Riders is an overriding, compelling sense of purpose, infused with passion, courage, discipline, resilience, and a strategy of nonviolent direct action.

Their focus? The 1960 Supreme Court ruling that segregation was unconstitutional in interstate travel. From May 1961 until December 1961, the Freedom Riders traveled interstate bus and rail routes in the south to test whether desegregation was being followed.

As we’ve read about or seen in the PBS documentary Freedom Riders that aired in May, 2011 (still available to view free online)  the riders endured firebombing, savage beatings and demeaning treatment -- chronicled by national media along the routes. They also tolerated harsh prison conditions. Through all of this, they never deviated from their commitment to meet violence with nonviolence.

In November 1961, the “colored only,” “white only” signs came down; lunch counters, rest rooms, and interstate travel desegregated.

The Freedom Riders had won their battle, giving a huge impetus to the Civil Rights movement.

Mission and Community

While the tactics piece has certainly been employed since by social justice advocates, the enduring legacy of the Freedom Riders lies in something more ethereal - the possibility that an organization can create a spirit, a common purpose and passion that can infuse followers, turning them into a community capable of doing great things.

Listening to the Freedom Riders reminiscences – in the documentary and the forums that have occurred around the country – a picture is painted where mission and community inextricably became one. You can tangibly feel why they were so successful; what they built reignites inspiration 50 years later.

Glenda Gaither Davis, who became a Freedom Rider at 18, says of her experience,  “There was that underlying togetherness that stood all the tests we were put through. We sang, and we talked, and we prayed, and ... we worked together regardless of where we came from. And we had a common cause ... to make things equal for all people.”

Ernest “Rip” Patton, Jr. spoke recently at a community forum particularly for teachers and students in the Los Angeles area. It was sponsored by Facing History and Ourselves,  an organization that supports teachers in helping students link history to moral choices. Patton, who had been a student at Tennessee State 50 years ago, described how the Freedom Riders seamlessly worked together to integrate lunch counters in Nashville.

Students asked what it had felt like to face the risks he had. The large theatre auditorium felt more like a living room as he answered.

He was arrested after his ride to Jackson, Mississippi, and sent to the formidable Parchman Penitentiary. He was one of more than 300 Freedom Riders incarcerated there that summer and fall. To keep up their spirits in dealing with the oppressive guards, he said, he and other prisoners sang all the time, which had the added benefit of irritating the guards.

Freedom riders James Lawson (who taught the principles of Gandhian nonviolence), Ralph Abernathy, James Farmer and Diane Nash were among the leaders of the group. However, because the byproduct of everyone’s efforts was to create a community of mutual support and strength, everyone had a role as a leader.

Creating Common Purpose

There are many aspects of the culture created by the Freedom Riders that can inspire both organizations and companies that seek to bring out the best in their people.

• Training was a top priority. Freedom riders were taught and helped to understand and embrace Gandhian nonviolence principles. They tested themselves and were tested against the types of intimidation and degradation they anticipated. They knew how to behave. That was removed as a potential anxiety. Similar to Mary Gentiles’ work Giving Voice to Values, they had practiced and rehearsed how they would act. They had a chance to become confident and comfortable with how they wanted to show up.
• While ego is inevitable, the Freedom Riders navigated in such a way that they didn’t let personal agendas or disagreements derail their purpose. The driver of behavior was the common purpose for both white and black Freedom riders, equality for all.
• In the discipline, focus and clarity of what would be undertaken, the Freedom Riders were united by clear, common goals. They acted in a manner that we’ve come to associate with successful serial entrepreneurs. They had a defined purpose. They kept taking small steps, learning as they went, building on what they had done, moving consistently toward their goal, moving to Plan B when it was warranted.
• Respect and mutual support defined the treatment they received and gave to each other. While each person was individually exposed, they were connected to a greater whole that embraced them. They created community  that fueled them even during the worst experiences.
• They embraced a code of conduct that also became an operational strategy. For their purpose, it was nonviolence. Their tactics and strategy were consistent, made sense based on who they said they were. They knew what they wanted to accomplish and they delivered to that goal with discipline and authenticity.

Ultimately, the Freedom Riders gained strength from the clarity of their mission, how well prepared they were to go after it, and the system of support that developed in serving a higher purpose.

The Freedom Riders’ legacy is that they developed an approach they consistently and genuinely honored. Their enduring inspiration is that they lighted the way to the power of a dream fearlessly pursued. They showed what people connected by a common purpose to do good can accomplish together.

Photo by snakepliskens via Flickr.

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a thought leader on building leadership, trust, and reputation and writes The Week in Ethics.

The news about narcotic painkillers is increasingly dire: Overdoses now kill nearly 15,000 people a year -- more than heroin and cocaine combined. In some states, the painkiller death toll exceeds that of car crashes.

The head of the Centers for Disease Control and Prevention has declared the overdoses from opioid drugs like OxyContin an "epidemic." And a growing group of experts doubts that they work for long-term pain.

But the pills continue to have an influential champion in the American Pain Foundation, which describes itself as the nation's largest advocacy group for pain patients. Its message: The risk of addiction is overblown, and the drugs are underused.

What the nonprofit doesn't highlight is the money behind that message.

The foundation collected nearly 90 percent of its $5 million funding last year from the drug and medical-device industry -- and closely mirrors its positions, an examination by ProPublica found.

Although the foundation maintains it is sticking up for the needs of millions of suffering patients, records and interviews show that it favors those who want to preserve access to the drugs over those who worry about their risks.

Some of the foundation's board members have extensive financial ties to drugmakers, ProPublica found, and the group has lobbied against federal and state proposals to limit opioid use. Painkiller sales have increased fourfold since 1999 , but the foundation argues that pain remains widely undertreated.

The group says industry money has had no effect on its advocacy.

"I'm convinced with every shred of my body that our interest is improving the lives of people affected by pain," said Will Rowe, the foundation's chief executive, "and we want to do that the best way we can."

The problem isn't opioids, Rowe and other group leaders say. It's poorly trained doctors who prescribe them too easily or in excess.

Yet, critics say the Baltimore-based foundation is making it harder to address a major public-health problem.

"If you were a drug company, wouldn't it be smart to make it look like you had a patient-oriented group?" said Dr. Gary Franklin, a Washington state official who tussled with the foundation over new restrictions on high-dose painkillers.

Its funding makes the group "one and the same" with the pain industry, Franklin said.

In stories this year, ProPublica has detailed the close entanglements between pharmaceutical companies and groups representing doctors. Reporting showed that the positions of societies representing specialty physicians often reflected the views of their major funders.

The American Pain Foundation falls into a different category -- health advocacy. It harnesses the power of patient stories to sway politicians, state medical boards, judges and government health regulators, emphasizing that it represents grassroots voices.

ProPublica's review found that the foundation's guides for patients, journalists and policymakers play down the risks associated with opioids and exaggerate their benefits. Some of the foundation's materials on the drugs include statements that are misleading or based on scant or disputed research.

The group has intervened in court cases in ways that appear to counter its stated mission. In one example, it sided with Purdue Pharma, its longtime funder, to block a 2001 class-action case filed by Ohio patients who had become addicted to or dependent on the company's blockbuster painkiller, OxyContin.

And the foundation mobilizes patients to send "outraged" email messages to news organizations that run stories it believes reinforce "stigmas and stereotypes" about the risks of pain medication.

The group's board includes some patients but also doctors who are paid to speak and consult for drug companies, a researcher whose clinic has relied on their funding for survival and a public-relations executive whose firm represents them.

Last year, one board member was the lead author of a study about a Cephalon drug. Cephalon sponsored the study, and its employees were co-authors. The study found that the drug, Fentora, was "generally safe and well-tolerated" in non-cancer patients even though it is only approved for severe cancer pain.

Dr. Andrew Kolodny, a New York psychiatrist who heads Physicians for Responsible Opioid Prescribing, said the foundation has built credibility with politicians and regulators who may not be aware of the extensive industry ties.

"I don't think they realize that in many ways the American Pain Foundation is a front for opioid manufacturers," Kolodny said.

Rowe, however, said it can be hard for critics to understand the mindset of patients whose pain is so severe they are willing to risk serious side effects to gain relief.

"Policymakers can go to bed at night and say, 'Well, I protected society,'" by restricting access to a risky painkiller," he said. "The person with pain or the person with cancer could say, 'You know, I'm sorry. I'm living with this, and I want to take this chance.'"

'The System Is Awash in Opioids'

In the late 1980s and early '90s, physicians who cared for pain patients excitedly embraced opioids as a low-risk treatment for suffering.

Derived from the opium plant, opioids reduce the perception of pain by attaching to opioid receptors in the brain, spinal cord and elsewhere in the body.

"We bought into this idea that opioids would be effective and that the risk of addiction would be low," said Dr. Jane Ballantyne, a longtime pain expert and a professor at the University of Washington.

But along the way, pain doctors split. Some, like Ballantyne, began decrying the increasingly widespread use of opioids and questioned whether the drugs worked. Others, like the foundation's leaders, said the drugs were being unfairly maligned, making pain patients feel like criminals and discouraging doctors from prescribing them.

Despite the debate, sales of the drugs have skyrocketed.

Last year, $8.5 billion worth of narcotic painkillers were sold in the United States, according to the prescription-tracking company IMS Health. Enough of the drugs were prescribed last year to "medicate every American adult around the clock for a month," the CDC said.

"Right now, the system is awash in opioids, dangerous drugs that got people hooked and keep them hooked," said CDC Director Thomas Frieden in a recent news briefing.

Some of the pills have become household names: Vicodin, Percocet, OxyContin. On its own, OxyContin, an extended-release painkiller, accounted for $3.1 billion in sales last year, up from $752 million in 2006, according to IMS Health.

There's little dispute that many people endure chronic pain. In the past, many doctors, especially those providing primary care, ignored pain as a condition that warranted its own treatment.

A report from the prestigious Institute of Medicine last summer said 116 million American adults suffer from chronic pain. The report also cited legal and regulatory barriers to opioids, especially for cancer and end-of-life pain. The findings are lauded by the foundation as underscoring the concern about undertreatment.

In an email to ProPublica, however, the report's chairman said the study panel took a broad look at chronic pain and didn't examine the use of opioids with "rigor or detail."

"It does seem like the issue of opioid use is worthy of a separate study," wrote Dr. Philip A. Pizzo, dean of Stanford University's medical school.

Guides Offer Reassurance About Pain Drugs

The American Pain Foundation's website offers publications for patients, policymakers and even journalists. Each depicts the benefits of opioids, and each is underwritten by the makers of those drugs.

Its patient guide, paid for by four companies, discusses several treatments for pain. It says such pain relievers as aspirin, ibuprofen and naproxen commonly cause gastrointestinal bleeding or ulcers, delay blood clotting, decrease kidney function and may increase the risk of stroke or heart attack. And it warns patients to use these pain pills at the lowest dose and stop them unless clearly needed.

The side effects of opioids, on the other hand, are minor, and most go away "after a few days," the foundation's guide says. The underuse of opioids, it says, "has been responsible for much unnecessary suffering."

Patients, it says, shouldn't worry if they need more of a drug. They are not developing an addiction.

"Many times when a person needs a larger dose of a drug," the guide says, "it's because their pain is worse or the problem causing their pain has changed."

Another guide, written for journalists and supported by Alpharma Pharmaceuticals, likewise is reassuring. It notes in at least five places that the risk of opioid addiction is low, and it references a 1996 article in Scientific American, saying fewer than 1 percent of children treated with opioids become addicted.

But the cited article does not include this statistic or deal with addiction in children.

"I would much prefer that they would put in there something that could be substantiated by a real reference," said Dr. Leonard Paulozzi, a CDC medical epidemiologist specializing in drug overdoses. "That would present a much less rosy picture of the risk."

A recent report by the National Institute on Drug Abuse said estimates of addiction among chronic pain patients using opioids range from 3 percent to as high as 40 percent .

One Foundation-related publication this year provided a case study of how physicians could convince patients that the drugs are not addictive.

In an e-newsletter paid for by a drug company, Florida family physician Louis Kuritzky summed up the advice he'd give to a patient with knee pain: "We have learned that when patients have important pain problems like you do, they can use such medications successfully over the long term without any major risk of addiction."

This advice is contradicted by a respected medical review organization that looked at research on the use of opioids for osteoarthritis of the knee or hip. The Cochrane Collaboration concluded that "the small to moderate" benefits of opioids "are outweighed by large increases in the risk of adverse events" and the drugs should not be routinely used.

Kuritzky said he had not read the Cochrane review but believes that the downside of opioids is "very, very small" based on his experience with his patients.

"There are many issues where you will see wise men and women differ about the right answer to a difficult and important question," he said.

Rowe, the foundation's chief executive, acknowledged that some of its publications need updating. He pointed to additional materials on the group's new PainSAFE website, which include a broader description of the risks. But the foundation continues to post outdated guides and even refers to them in newer materials.

And while the PainSAFE site discusses the risks more completely, it is based on the assumption that the drugs have proven to work well for chronic pain sufferers. The site says studies have shown opioids improve daily function and quality of life for such patients. In contrast, a new guide by New York City's Department of Health and Mental Hygiene says there is "insufficient evidence" that "pain relief is sustained or function improves."

Dr. Lewis Nelson, chairman of the federal Food and Drug Administration's Drug Safety and Risk Management Advisory Committee, said he believes the foundation's guides can't help but be biased.

"If you're taking drug-company money and you're working as an advocacy group for patients, I think by definition you're biased," said Nelson, an emergency room physician in New York. "I take everything they say with a grain of salt."

Fighting in Court for Painkiller Access

The foundation doesn't just offer advice about opioids; it takes its arguments into court.

In 2005, it filed a friend-of-the-court brief in the U.S. Fourth Circuit Court of Appeals in support of Dr. William Hurwitz, a pain doctor in Virginia who had been convicted on 50 counts of drug trafficking.

The doctor had been accused of prescribing a single patient as many as 1,600 Roxicodone pain pills in one day. Hurwitz allegedly had prescribed that patient alone more than 500,000 pills between July 1999 and October 2002.

The pain foundation and its allies argued that the jury instructions in the case didn't distinguish between criminal behavior and mistakes by a well-intentioned physician. "It is not drug dealing to prescribe opioids to patients that might be 'suspected' addicts or substance abusers," the foundation and two other groups wrote in a brief.

Rowe said the foundation intervened in the case on principle, fearing the drugs would be "demonized." The appeals court threw out the conviction, but Hurwitz was retried and convicted on 16 counts of trafficking.

Years earlier, the foundation opposed several pain patients who had sued Purdue Pharma in an Ohio county court for allegedly obscuring the risks of OxyContin.

The foundation filed a friend-of-the-court brief backing Purdue, arguing that the health of all pain patients would be harmed if the class-action lawsuit went forward because doctors would become fearful of prescribing opioids.

Ohio was plagued by "opiophobia" according to a brief co-authored by the foundation and two smaller pain nonprofits. "Consequently many, if not most, of the state's residents had been deprived of adequate pain care," it said.

The Ohio Supreme Court decided in 2004 not to allow a class action.

In a separate federal case in 2007, Purdue pleaded guilty to misbranding OxyContin "in an effort to mislead and defraud physicians and consumers," according to a statement from prosecutors. The company agreed to pay $600 million in penalties. Three top officials also pleaded guilty to misdemeanors and agreed to pay $34.5 million.

Two months after the conviction, however, then-foundation chairman Dr. James Campbell praised Purdue in a statement to a U.S. Senate committee.

"I believe Purdue and its management deserve recognition for their contribution to the welfare of these many patients," Campbell wrote. Prosecuting the executives, he wrote, sent a "chilling message to those who dare to develop high-risk drugs for important diseases."

Campbell mentioned his foundation role in his remarks. Rowe said the former board chairman was not speaking for the group, and stressed that strict rules keep funders from influencing its work. The foundation is working to diversify its support, Rowe and others said.

Nevertheless, the group often finds itself on the same side as drugmakers in state and federal debates over how to regulate painkillers.

In 2009, the FDA suggested changes to address concerns about the risks of long-acting opioids, recommending that physicians and pharmacists be certified to ensure they had been educated about those risks.

Although foundation officials blame poorly educated physicians for the growing problems with opioids, the officials joined with other pain groups and drugmakers to assail the plan.

The FDA backed off key elements of its proposal last year and said doctors could voluntarily attend courses about the risks.

That move was criticized by an FDA advisory committee, which voted overwhelmingly that it wasn't enough to stem the tide of overdose deaths.

"When you look at 14,000 people dying on an annual basis, that's more than we've lost in Iraq and Afghanistan since 2001 in active duty," Dr. Mori Krantz, an advisory panel member and director of the prevention center at the University of Colorado in Denver, said during the meeting.

Little Evidence That Narcotics Work for Chronic Pain

Missing from the American Pain Foundation literature is any suggestion that the drugs don't work for many chronic pain sufferers.

Recent editorials in medical journals and scientific reviews cite little evidence of long-term benefit.

Most of the clinical trials for opioids to treat chronic pain "were small, lasted less than 16 weeks and excluded patients with a history of substance abuse, psychiatric illness and depression, who are at increased risk for opioid misuse and abuse," three physicians wrote in an editorial this year in the Archives of Internal Medicine.

"How can a therapy be considered if there's no evidence that it works and there's evidence of lots of side effects?" Dr. Mitchell Katz, one of the authors and director of the Los Angeles County Department of Health Services, said in an interview.

Rowe said he knows plenty of patients for whom the drugs work, "and their lives are together because they use them."

The foundation board's chairman and president, Dr. Scott Fishman, is stepping down at the end of the month. In a statement to ProPublica, he said his views have evolved and that he now believes opioids are both overused and addictive. But he defended the group.

"I have not always agreed with APF positions and have had disagreements with some APF leaders and patient advocates about many issues in pain management, including the appropriate place of chronic opioid therapy," wrote Fishman, chief of pain medicine at University of California, Davis.

"Nonetheless, I have always believed that patients in pain in the United States need strong patient advocacy, which APF has offered."

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

Can big business do good in the world? Can corporations contribute to a healthier planet while still turning a profit? With each new headline about bad corporate behavior, it would be easy to assume that the answer to both questions is decidedly 'no'.

But in fact, a global army is hard at work every day to answer those questions in the affirmative. They are Corporate Idealists: people who believe that business can make the world a better place and are working from within to put their beliefs into action.

Where are these Corporate Idealists? They're in China's industrial zones, working with factory owners to make sure employees are paid and treated properly. They're in Silicon Valley, collaborating with product developers to protect privacy on the internet. They're in Africa, sitting on dirt floors with village elders to make sure that mining is done without disrupting indigenous traditions. They're in executive suites in London and New York, convincing their colleagues that protecting human rights and the environment is good for business.

Why should we care about them? Corporate Idealists are the change agents we must recognize and support if we are to tackle the biggest challenges facing our world today: climate change, food and water shortages, economic disparity. Big business can either solve or exacerbate those problems; Corporate Idealists are working to make it the former, not the latter.

I know that Corporate Idealists exist because I am one of them. I've been a Corporate Idealist since my first Students for Responsible Business (now Net Impact) conference as an MBA student in 1998. I then joined BP and worked in Indonesia and China for three years, consulting with people living near company sites and setting up social programs to make sure that BP's presence didn't harm local communities.

The Deepwater Horizon disaster last year challenged my belief that companies can be good, as I watched the company I supported for so long wreak havoc on communities around the Gulf of Mexico. But while that tragedy tested my faith, it affirmed to me that we need Corporate Idealists now more than ever: My experience with BP in Asia showed me that a company can do good and operate successfully given the right staff and resources -- but that work then needs to replicated throughout a company, and beyond.

Last year more than 5,500 companies around the world issued sustainability reports, up from about 800 ten years ago. An increasing number of companies are working with nongovernmental organizations to assess their socioeconomic impacts (see Oxfam's assessment of Coca-Cola and SABMiller, done in partnership with those companies) and to tackle particular issues, from supporting factory workers to protecting free expression and privacy on the internet.

The real question is this: How do we get the efforts of individual Corporate Idealists to add up to more than the sum of their parts? In other words, how can the work of committed individuals amount to the sweeping changes that we need?

To start, we need to state our shared values. We need a Manifesto for the Corporate Idealist: an outline of the principles and actions that will help us better align the interests of business and society.

Here's my proposed starting point for such a manifesto, based on my ten-plus years working in and with big business and the experience of other Corporate Idealists I've gotten to know over the years:

1. Renounce the carbon offset model. If a company doesn't pay a decent wage and refrain from polluting, it can't redeem itself by sponsoring youth soccer teams or museum exhibits -- or even by creating beautiful, innovative products. (Apple, I'm talking to you.)

2. Learn and improve the tools of business. I didn't need the finance or accounting I learned in business school to speak with those villagers in Indonesia, but I did need those skills to translate their needs into actions for the company. We also need better models of calculating risks, costs, and benefits, that take externalities into account.

3. Listen. Perhaps it's so obvious that a company should listen to its stakeholders that executives assume someone else is doing it. When I started working for BP in China in 2002, local staff were still calling the company by its former name -- British Petroleum -- because "B" in Mandarin can sound like slang for "vagina", and "P" for "fart". Perhaps a trivial (if memorable) example, but if a company fails to heed its own employees' warnings on something as basic as the company name, will it hear concerns about human rights and the environment?

4. Build community. If you're the only one in a company fighting for better practices, it can be a lonely job. Initiatives like the Global Business Initiative on Human Rights bring together Corporate Idealists from different companies to develop tools to support their work and connect with others facing similar challenges.

5. Share stories. Spreadsheets are important, but at the end of the day we're talking about people, not numbers. We have to keep reminding ourselves that every decision we make affects a worldwide supply chain of real human beings.

To be sure, simply following these five steps won't solve the world's problems: Regulators, consumers, and investors need to demand better company behavior. But we need Corporate Idealists and we need to help them succeed. Consider this Manifesto for the Corporate Idealist the beginning of a conversation we must all have, about how to align the needs of business with the needs of society.

Are you a Corporate Idealist? What's your Manifesto? Tell Christine Bader on Twitter: @christinebader.

Christine Bader is a Nonresident Senior Fellow at The Kenan Institute for Ethics, Duke University.  This article was first published on The Huffington Post and is republished with permission.

Watch Christine's TEDx talk, Manifesto for the Corporate Idealist.

A new study by analysts at J.P. Morgan concludes that “impact investing” – which is intended to generate social good as well as financial return – could represent a highly-profitable trillion dollar market over the next decade.

Women at water pump in Mozambique

“The market opportunity for investment is vast,” the study (PDF) says, “As this movement gathers steam, we recognize the potential for impact investments to attract a larger portion of mainstream private capital and anticipate that more investors will seek to generate positive social and/or environmental impact when making investment decisions. In fact, we believe that impact investing will reveal itself to be one of the most powerful changes within the asset management industry in the years to come.”

Impact investing, according to the study, can target and benefit different populations: the so-called “base of the pyramid” (BoP), which has been defined by the World Resources Institute as people in emerging markets earning less than $3,000 a year; a broader “base of the pyramid” which includes low-income populations in developed markets; and the broadest group, “which can include those impacted by income-independent factors such as climate change.”

Applying its methodology only to the first of those groups - the BoP population in emerging markets – the study identifies five business sectors - housing, rural water delivery, maternal health, primary education and financial services – with potential over the next 10 years for total invested capital of $400 billion to $1 trillion and profit of $183 billion to $667 billion.

The BoP market opportunity exists, the study says, because ““markets at the base of the economic pyramid are typically under-served by traditional business, which may exclude this population from being considered part of its potential customer base.”

Impact investing is attracting a wide variety of investors “including development finance institutions, foundations, private wealth managers, commercial banks, pension fund managers, boutique investment funds, companies and community development finance institutions,” according to the study.

While these investors have varied expectations regarding financial returns, the study says, increasingly “entrants to the impact investment market believe they need not sacrifice financial return in exchange for social impact. Indeed, many have a regulated, fiduciary duty to generate risk adjusted returns that compete with traditional investments.”

The report notes that J.P. Morgan is a co-founder – along with the Rockefeller Foundation and the U.S. Agency for International Development – of the Global Impact Investing Network, which aims “to accelerate the development of an effective impact investing industry.”

Among other signs of growth, the study says, “large-scale financial institutions such as J.P. Morgan, Citigroup, Prudential and Africa’s Standard Bank are positioning themselves to grow impact investing businesses beyond their minimal regulatory obligations.”

Photo: World Bank

Yesterday (11/28), federal judge Jed Rakoff slammed the Securities and Exchange Commission for making a toothless settlement with Citigroup over financial crisis misdeeds, arguing that it obscured the basic facts of what actually happened. Today (11/29), Bloomberg has an important story by Richard Teitelbaum that, from a very different vantage point, demonstrates the same infuriating point: Despite the economic wreckage we are still trying to repair, we have yet to have an adequate accounting of how the financial crisis happened, what caused it, and who knew what when.

Former U.S. Treasury Secretary Hank Paulson (2006).

According to the story, on July 21, 2008, then-Secretary of the Treasury Hank Paulson met with "a dozen or so hedge-fund managers and other Wall Street executives" and discussed "a possible scenario for placing Fannie [Mae] and Freddie [Mac] into 'conservatorship.'" That's a fancy term for a government seizure that would have allowed the entities to keep operating, but would have caused severe adverse consequences to holders of the Frannies' equity and, possibly, debt. A fund manager told Bloomberg he was "shocked that Paulson would furnish such specific information -- to his mind, leaving little doubt that the Treasury Department would carry out the plan." After the meeting, this manager consulted a lawyer, who told him to cease trading immediately in the Frannies, lest he later be accused of - here's the rub - insider trading.

The Bloomberg story cites law professors to say that Paulson did not break the law. But the story's implicit allegation is that the former head of Goldman Sachs was so clueless - or contemptuous - of his role as Secretary of the Treasury of the United States of America that he engaged in a clubby tête-à-tête with his former peers and handed them what Bloomberg says "amounted to inside information."

It's actually worse, because as Bloomberg also reports, Paulson was publicly playing down the possibility of dramatic government action -- practically the opposite of what he confided behind closed doors to those elite traders.

Paulson didn't comment for the Bloomberg story, and his spokesperson referred questions to his book, On the Brink: Inside the Race to Stop the Collapse of the Global Financial System - which, Bloomberg points out, doesn't mention the meeting.

There are limits to what a reporter can get - starting with whether any of those powerful and canny Wall Street sharks profited on the information. They may have shorted the Frannies, but, as the Bloomberg story points out, "tracking firm-specific short stock sales isn't possible using public documents." We need a more powerful entity - perhaps a Congressional committee? - to find that out. And, here are a few more questions that cry out for answers:

1. What is the justification for such a meeting? Former St. Louis Federal Reserve bank president William Poole suggests that the Treasury needs to be able to prep the market with information.

Fair enough. A Treasury Secretary should talk to smart market participants, and needs to know how the market might react to any given action.

But there's a difference between meeting to receive information and telling a chosen few market-moving plans. Hank Paulson and now Timothy Geithner should receive information from all types of parties. If they want to float a trial balloon, they have to float it in such a way that doesn2019t give select participants market sensitive information.

2. Why did Paulson meet with these people specifically? The Bloomberg piece notes that Eric Mindich, a hedge fund manager who is a former Goldman Sachs employee, hosted the meeting. Several Goldman Sachs executives attended.

If the Treasury secretary is going to hold meetings with market participants, the attendees should be chosen based on - you are going to laugh here - merit, not connections. And they should be transparently disclosed at the time.

3. How many other meetings like this were there? As Felix Salmon recalls, Andrew Ross Sorkin in his book "Too Big To Fail" revealed that Paulson met with the board of Goldman Sachs in June 2008 in Moscow -- a month before the meeting Bloomberg has revealed -- and discussed market conditions, and even contemplated that Lehman Brothers might fail.

Here's how Sorkin wrote about this:

For the nearly two years that Paulson had been Treasury secretary he had not met privately with the board of any company, except for briefly dropping by a cocktail party that Larry Fink's BlackRock was holding for its directors at the Emirates Palace Hotel in Abu Dhabi in June.

Anxious about the prospect of such a meeting, [Paulson Chief of Staff Jim] Wilkinson called to get approval from Treasury's general counsel. Bob Hoyt, who wasn't enamored of the "optics" of such a meeting, said that as long as it remained a "social event," it wouldn't run afoul of the ethics guidelines.

Still, Wilkinson had told Rogers, "Let's keep this quiet," as the two coordinated the details. They agreed that Goldman's directors would join him in his hotel suite following their dinner with Gorbachev. Paulson would not record the "social event" on his official calendar.

One possible defense for Paulson floating government conservatorship of Fannie and Freddie is that by the time of his July meeting with traders and executives, the market was widely anticipating the government would take that action. But what if the market only anticipated this because there were other, previous meetings between Treasury officials and well-connected investors in which such plans were floated?

4. What did this meeting do for the Treasury?

My sense of Paulson's approach - act first, act boldly, move on and dwell no more - is that his actions weren't well thought out at all.

But let's concede, arguendo, that Paulson and the Treasury held this meeting as part of a carefully thought-out strategy to prep the market for the Frannie conservatorship. What did that get the government? If anything, the prepping only would make the investors more likely to extrapolate and short or sell other financial stocks.

If preparation was indeed the rationale and justification, then Paulson and Treasury needed to have a contingency plan for investor reaction. Which they almost certainly didn't, since Lehman then failed and they were forced into a series of desperate actions. Over the next weeks, they scrambled to create the Troubled Asset Relief Program, or TARP, and then remake it into the preferred equity-buying program (rather than the toxic asset purchasing program).

Without a full and convincing accounting, we are left with a picture of a Treasury Secretary who took care of his buddies while allowing the system to blow up. This is the kind of thing that a crony capitalist system - and only such a corrupt system - would allow.

Photo: U.S. Treasury

Jesse Eisinger is a senior reporter at ProPublica, covering Wall Street and finance.  In April 2011, he and Jake Bernstein were awarded the Pulitzer Prize for National Reporting for a series of stories on questionable Wall Street practices that helped make the financial crisis the worst since the Great Depression.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

When the Securities and Exchange Commission struck a deal with Citigroup over a failed security that the bank sold to investors, we asked whether regulators had handed Citigroup too sweet of a deal .

Today in Manhattan, U.S. District Judge Jed Rakoff appeared to reach that very conclusion: "If the allegations of the Complaint are true, this is a very good deal for Citigroup," Rakoff wrote as he refused to sign off on the $285 million proposed settlement agreement.

While the full opinion is worth a read, here's a summary of the judge's objections:

The allegations brought by the SEC don't match the charges.

The SEC, in its complaint, alleged that Citigroup knowingly misrepresented or failed to disclose to investors key information about the CDO, known as Class V Funding III. We first reported on Class V last year, in our story on CDO self-dealing, noting that the CDO contained risky pieces of other Citigroup CDOs.

Specifically, the SEC charged that Citi put risky assets into the deal, bet against it, and then didn't disclose that to investors. According to SEC, "Citigroup knew it would be difficult" to sell the CDOs if it disclosed all that to investors.

Judge Rakoff concluded, "This would appear to be tantamount to an allegation of knowing and fraudulent intent."

But in the end, the SEC only charged Citigroup - and one low-level exec - with negligence 2013 a lower standard of proof than intentional fraud. Charges were also not filed against other, more senior Citi execs who, according to the SEC, also knew details of the deal.

The boilerplate language in the settlement that forbids future violations by Citigroup is essentially meaningless.

"By the S.E.C.'s own account, Citigroup is a recidivist," wrote Rakoff, who noted that the SEC had not sought to enforce that prohibition for at least a decade.

The context here is more than adequately explained by a recent New York Times article that found that Citigroup had agreed on at least four other occasions not to violate that same anti-fraud statute, only to continually break that promise.

The fine is too modest to have a deterrent effect.

According to Rakoff, the fine in this case is so mild that it's more or less "pocket change to any entity as large as Citigroup" and starts becoming just a cost of doing business.

Rakoff loathes the longstanding tradition of reaching settlements without any admissions of wrongdoing.

Sure, it's standard in these types of settlements, and judges have routinely signed off on such language, but Rakoff has signaled in the past that he has serious qualms about these non-admission, non-denial settlements.

For one, he says the deal with Citi shortchanges investors, who according to the SEC lost more than $700 million: With no mea culpa from Citi, private investors have a much harder time bringing their own lawsuits against the company - which for Citigroup is precisely the point.

Rakoff also argues that the tradition cheapens judicial power, which must be used in conjunction with "cold, hard, solid facts."  A non-admission of guilt but agreement to pay, while in keeping with established tradition, denies the court of established facts on which to decide whether the settlement is reasonable, he said.

The truth should come out

Finally, Rakoff argues that especially when it comes to the financial sector - and especially now - the public deserves to know the truth:  "In any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth."

One thing Rakoff didn't touch on? A discrepancy we raised last month: Citigroup seems to believe this deal with the SEC would have settled all of its potential liability over CDOs - something the agency denied.

The SEC's response

The SEC issued a statement today defending its settlement:  "We believe that the proposed $285 million settlement was fair, adequate, reasonable, in the public interest, and reasonably reflects the scope of relief that would be obtained after a successful trial," said Robert Khuzami, the SEC's head of enforcement.

Khuzami pointed out that Rakoff's objection to the lack of admission of guilt "ignores decades of established practice throughout federal agencies and decisions of the federal courts."

That response is in line with what Khuzami has said in the past - that securing corporate confessions from companies like Citi, while ideal, would slow down the agency's investigations.

"No one disagrees with the sort of abstract notion that you'd like to have admissions in your cases," Khuzami said earlier this month. "One has to make choices between competing demands."

The agency has also argued that taking banks to costly trials would divert scarce resources toward their other securities fraud fighting efforts, and be counterproductive.

What's next?

The case has been scheduled for trial next year - something Citigroup would presumably like to avoid, given the mountains of evidence in the SEC's possession that would become public should the case indeed go to trial.

But a trial is still not a sure thing. Rakoff initially rejected a proposed SEC settlement with Bank of America, but he eventually approved the deal last year after the agency came back with a bigger fine. It's unclear if the SEC will try to do the same this time around.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

Recent crises at University of California Davis (UCD), Syracuse University and Penn State University - from campus police using pepper spray on peaceful protesters, to sexual molestation allegations, to child sex abuse charges - raise questions about the role of risk management on campuses.

Police pepper spray demonstrators at UC Davis Nov. 18, 2011 (via YouTube)

Not surprisingly, a recent survey by the Association of Governing Boards (AGB) indicates comprehensive risk assessment - a fairly standard practice at large companies - is not an automatic function of university governance. Only about one-third of the boards surveyed had a formal process for risk assessment. AGB says further improvement is needed.

The issue isn’t just how widespread risk management is on campuses but whether the standards for effective programs are adequate to the challenges inherent in their mission. Penn State was early to the party with what was considered a comprehensive risk management function and yet it failed to protect the university’s reputation. It is a failure that impacts every aspect of the institution, the measurable and the unquantifiable. Moody’s has placed Penn State’s revenue bond rating on review for possible downgrade in the midst of its $2 billion campaign.

College leaders are facing an ever-growing list of emerging issues not in their playbook, as well as challenges posed by insular sports departments that are economic drivers in their own right. The more narrowly risk is defined, the greater the likelihood that managing it can ignore or minimize the powerful role an institution’s culture plays in preventing, creating, or escalating crises. Culture risk is organic, given texture by those in power and those being led. And in the viral world in which we live, local missteps take on global footprints in seconds.

The pepper spraying of Occupy Davis protesters November 18, 2011 was immediately captured on YouTube.  Eleven students were treated at the scene or taken to a hospital; 10 were arrested. The president of the University of California system has said he was "appalled" and will do an assessment of law enforcement procedures on all 10 UC campuses.

After seeing the video, UCD Chancellor Linda Katehi, said the use of pepper spray was “chilling” and “raises many questions about how best to handle situations like this.” She announced the creation of a task force to look into encampments. Meanwhile, the UCD Faculty Association has called for her resignation citing “a gross failure of leadership.”

Should university presidents have anticipated that the Occupy Wall Street protests would quickly move to college campuses? For that matter, should university leaders with star power football or basketball programs, TV rights, and wealthy boosters anticipate problems with transparency, fiefdoms, and where loyalty is owed? Even when the problem is anticipated, knowing how to address it to circumvent unintended consequences becomes the key.

AGB, a leading source of information for trustees and presidents, identifies four risks institutions might face: operational (fire, weather, strike, power plant accident), legal and regulatory, (compliance failures), financial, and political and reputational.

In 2007, AGB co-hosted a summit on Enterprise Risk Management (ERM) to begin to develop a sustainable ERM model with roles for presidents and others. UCD and Penn State were among the 40 leaders participating, including several people responsible for Penn State’s risk management and recently-fired President Graham Spanier. In this forum, culture was pegged to one of eight tactical components (like event identification) that should be looked at in its strategic, operational, financial, and compliance aspects.

Culture needs a much bigger focus in university risk management. That point will undoubtedly become clear in the findings of the avalanche of investigations planned at Penn State (from one led by trustees to others by the U.S. Department of Education and the National Collegiate Athletic Association).

Acting President Rodney Erickson made clear he was trying to usher in a culture change, when he announced a commitment to transparency and hiring an ethics officer to report directly to him. In the process, risk management is bound to broaden and perhaps find a new home there. Under Spanier, risk management was housed in the Privacy Office, reporting to the corporate controller, who reported to the former Sr. VP for Business and Finance, now accused of perjury in the scandal.

The more risk management is about compliance and not also about raising the difficult questions when competing values come into play (like issues of perceived safety versus right to dissent), the less a university is protected. The problem is that in juggling 100 balls, leaders often don’t have practice thinking through how their values, and those of the institution, will come into play in a variety of different potential situations.

It is the nature of universities that we expect them to figure out how to handle dissent without pepper spray, engage in dialogue, and create teachable moments that often occur outside classrooms.

What better setting than a learning environment to apply a variation of the Giving Voice to Values approach created by consultant and educator Mary Gentile for teaching business ethics to students – and to use it for administrators? (Over 100 universities from Harvard to Penn State to University of Cape Town use the approach in classrooms.) The approach is easily adapted to leaders – creating a safe environment to practice how to address “what would I say and do if I were to act on my values?”

Answering that question would have the greatest possible impact on risk management and protecting the university.

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a thought leader on building leadership, trust, and reputation and writes The Week in Ethics.