Everybody sees it, nobody wants to talk about it, and it stinks.

Ethics in business is the moose on the table, said Thomas Donaldson, professor of legal studies at the Wharton School at the University of Pennsylvania.

Donaldson, who spoke at a University of Richmond seminar on ethics and leadership yesterday, said corporations often deal with illegal and unethical behavior three ways: by avoidance, pocketing the information or obfuscating.

Avoidance: Some corporate environments avoid unethical or illegal situations even though they are obvious, such as the subprime mortgage crisis.

"Who didn't know zero down is no way to finance a mortgage?" Donaldson asked several hundred people attending the Donchian Symposium on the Ethical Challenges of Leadership.

Pocketing: In some situations, only a few people may have knowledge of unethical or illegal behavior -- but not the people who can stop it.

Obfuscating: Other corporations cloak illegal or unethical behavior to obscure the true value of the failing company, as in the accounting Enron used.

Donaldson suggested that contact between different levels of a corporation is one solution. "Management by walking around is a powerful tool," he said.

Another speaker, Ray C. Anderson, chief executive and chairman of Atlanta-based Interface Corp., a carpet manufacturer, spoke of his determination to make his company environmentally ethical and profitable. He said he hopes to have a carbon-neutral company by 2020.

"We must make peace with the Earth," Anderson said, "and not war on the environment. We must teach it in our schools, home and workplaces."

Contact Linda Dunham at (804) 775-8126 or ldunham@timesdispatch.com.