Disclosures of Codes of Ethics on Corporate Websites: A Pre- and Post-Sarbanes-Oxley Longitudinal Study

Abstract

Until recently, corporate ethics was not a topic of major concern. In the United States, it changed with the WorldCom scandal and Enron catastrophe. The effects of unethical decision-making took its toll on consumers’ confidence and portfolios, resulting in a desire for more transparency and increased ethical conduct. The study uses the top 100 US-based and top 100 Internationally based corporations from the 2001 Fortune Global 500. We examined whether companies had a published corporate code of ethics on their websites in July 2002, January 2003, March 2003, and July 2003. We found that there was not a significant difference between the number of US-based and Internationally based corporations for the first two observation dates. However, there was a significant difference between the number of US-based and Internationally based corporations for the March 2003 observation date that coincided with the implementation date of the Sarbanes-Oxley Act. Finally, while the rate of change dramatically decreased for Internationally based corporations after the implementation date of the Sarbanes-Oxley, US-based corporations continued to make their codes of ethics more accessible at a higher rate.