The 10-year-old settlement between the manufacturing and security conglomerate Tyco International and the state of New Hampshire has resulted in $7.1 million in funding for business ethics programs at Saint Anselm College and the University of New Hampshire (UNH), according to a news release from Saint Anselm College.

The board in charge of the fund has finally determined how the settlement money will be used, with $5 million going to UNH and the other $2 million to Saint Anselm College. New Hampshire is the location of Tyco’s headquarters in the United States.

In 2002, Tyco signed an agreement with the State of New Hampshire Bureau of Securities Regulation to resolve their investigation into Tyco’s previous management and the allegations of business misconduct. The agreement gave the state $5 million to establish a corporate governance program within the University System of New Hampshire. After several years of investing the settlement money by the state of New Hampshire, the endowment has grown to $7.1 million. Saint Anselm College and UNH submitted proposals to the board in charge of the fund.

UNH will use its $5 million of funding to start the Responsible Governance and Sustainable Citizenship Project, which is designed to promote ethics and principled leadership at the university.

Saint Anselm College will spend its $2 million on developing the Ethics in Governance and Investor Education Program. This program will engage the public through online resources, seminars and videos that deal with the issue of business ethics and accountability in governance. In addition, Saint Anselm will work with New Hampshire-based Wall Street Journal contributor Jack Falvey to create an online educational program for the public.

Tyco International was the center of one of the largest business ethics scandals in history. The company’s former CEO Dennis Kozlowski and former CFO Mark Swartz were convicted of falsifying business records, taking $120 million in unauthorized bonuses and several other crimes related to unethical business practices. Unethical business practices that have taken place in large companies such as Tyco International have raised concerns about the ethics training in business schools. Secretary of State Bill Gardner, Chairman of the Board, said that schools should consider ethics training to be a “paramount consideration” in teaching business students because they will be the future business leaders. “The establishment of these programs is a major step to accomplishing that goal,” he said.

The University of New Hampshire Foundation will manage the endowments for the schools, which are both located in the state of New Hampshire. The Foundation was started in 1989 with the aim of building private financial support for the University of New Hampshire. The remaining $100,000 of the settlement money will be used to pay for program start-up costs.

 

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