In February 2007, health products giant Johnson & Johnson disclosed that some of its foreign units might have made improper payments related to the sale of medical devices. By voluntarily disclosing the information to the Justice Department and the Securities and Exchange Commission, pledging full cooperation with the agency investigations, and accepting the early retirement of the executive responsible for the business units involved, the company may face lighter penalties and limit damage to its reputation. And that’s the good news.

The bad news is that even a company with a longstanding reputation for ethical conduct and responsible behavior can get ...