The Bottom Line Andrew Duff April 15, 2006 It has been my experience that in most companies, the people ? from the front-line employee to senior management ? want to do the right thing. Unfortunately, we do not always adequately define what ?the right thing? is. This is not for lack of trying. Businesses operate in a world with many shades of gray, and little that is black and white.However, we are not excused from this work because it is difficult. In fact, it is one of the key responsibilities of every corporate leader to set and vigorously uphold a set of ethical guiding principles for his or her organization. Without this, ethical problems are far more likely, if not inevitable. Companies work years developing client relationships and building a public reputation. Unethical acts can undo all of this overnight.Often we try to prevent situations like this by instituting rules and regulations. Sometimes those regulations are put in place at the macro level. In the securities industry we are bound by many rules restricting trading practices, requiring certain disclosures and more. Beyond these regulations, we typically implement rules at the micro level within our individual companies ? so that employees understand our commitment beyond what is required. We incorporate these messages in our leadership communications, setting the right tone for the organization. We enhance our ethics guidelines; we roll out focused training.All of these efforts are important. They serve as guardrails, ensuring we have an understanding of what is considered legal. But we all know that what is legal and what is ethical are not always one and the same.All of us will be confronted with ethical dilemmas at one or many points during our careers. In many industries conflicts are inherent in the business model. In the securities industry, we act as agent between buyers and sellers, each of whom has a competing interest to maximize value (which in turn is related to the revenues we generate by acting as agent). We must manage these inherent conflicts of interest as a core component of our business model, which will enable us to be a trusted agent and adviser to clients over many years.The most important thing we can do is create corporate cultures in which employees feel safe raising potential ethical issues, where we debate these issues willingly and consider them from every possible angle, and where we have the courage to stand by our convictions even when others in our industry are pursuing a different course.At Piper Jaffray, when we have an issue to resolve, we start the conversation by asking what is in the best interests of our clients. This helps ensure we are focused on the right outcome from the beginning.As business graduates, you are likely to be the next generation of leaders in many corporations. The business acumen you bring to the table may help your company open new markets or develop new products. But the ethical standards you set and uphold will safeguard your clients? trust and your organizations? enduring brands. And there are few assets a company has that are more valuable.