We Sell Trust in Public Companies

zEthics is the first of its kind; we sell trust in public companies.

In order to sell trust in public companies, zEthics must first demonstrate that the public company is trustworthy.  To accomplish this, zEthics makes use of the public company’s most valuable asset – its employees. 

Employees have the highest success rate for uncovering fraud, according to the latest research by Alexander Dyck, Adair Morse, & Luigi Zingales (Financial Economics, Feb 2007, “Who Blows the Whistle on Corporate Fraud”).  The majority of employees is honest and loyal, and can provide a wealth of information about the business practices of the company and its executives.

The recent financial crisis has raised serious questions about the effectiveness of boards of directors in exercising their fiduciary duties. Corporate governance requires that the board be a check and balance on the CEO and the executive team. The obvious question is whether directors of public companies properly oversee management and ensure management’s actions are in the best interests of shareholders?

What’s the best way to embarrass a board into doing the right thing?

Answer: disclosure.

To the board, information is knowledge, and knowledge is power.  How can anyone expect the board to oversee management if the executive management team is allowed to filter and manipulate the information they receive?

Corporate governance reform will remain illusive until public companies expand their board-level reporting to include timely information about the business practices of the company and its executives from an independent third party.  The board-level audit and governance committees should use this information as a check and balance with disclosures made by not only the executive management team, but also the outside auditors and consultants.

Employees have an opportunity to anonymously disclose information about the business practices of their company and its executives to an independent third party to ensure management’s actions are in the best interests of shareholders. Comprehensive board-level

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About zethics
CEO and founder of zEthics, Inc. Thirty years of experience with finance and accounting background in public private sectors.

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