Introduction

The word “ethics” frequently arises in the daily routine of many businesses.  Companies today have almost universally incorporated the ethical mantra into their mission statements.  Corporate social responsibility reports extol the benefits of a particular company’s business practices, environmental sustainability, and broader societal concern.  Organizations tout their code of conduct policies, and extol their honesty and commitment to integrity in their normal business practices.

In spite of this we are routinely confronted with numerous examples of public and business figures engaged in behaviours that are shameful, irresponsible, and potentially even illegal.

As I write this, the United States is about to embark upon a significant election, perhaps the most important one in its history.  That being said, both of the major candidates’ campaigns are shrouded in reports of tax evasion, using public office to secure favours, and allegations of inappropriate behavour.  Here in Canada, our current Prime Minister has been involved in not just one but three ethical investigations since 2015.   Both the WE controversy and the SNC Lavalin case have consumed considerable public attention while raising serious questions about the professional judgment and ethical conduct of those in positions of responsibility.

Business is not immune from this either. One only has to mention the phrase “Dieselgate” to recall how the conduct and behaviour of executives with one of the largest automobile manufacturers negatively impacted the company’s corporate image.

If society places so much emphasis upon ethics why don’t employees act more responsibly?  Or, to put it another way, why aren’t employees walking the ethical talk?

Where to start

What is Ethics?  In its simplest form ethics are moral principles.  They represent the cumulative values and beliefs one adopts which guide our behaviours and actions.  One hopes that the training provided by parents, grandparents, schools, teachers, friends, churches, synagogues, etc., would leave an indelible imprint on the young, and that this influence would deter them from acting inappropriately, and by extension, resisting temptation and abiding by the law.  Sadly, this isn’t always the case.

Where the Good turns Bad

One of the courses I teach is Human Resources Management.  A few years ago I used a case study as the basis for a discussion on ethical business conduct.  The central premise of this case was a Human Resources Manager who is approached by a neighbour who asks him to hire her nephew for a warehouse job at the HR Manager’s company.  The neighbour, a prominent local real estate agent, knows the HR Manager is looking to relocate to a larger home.  In return for hiring her nephew she offers to sell his house and forego the real estate commission.

I asked my class what would they do in these circumstances.  I thought the answer would be glaringly obvious; namely, for the HR Manager to politely reject the neigbhour’s overtures and not hire her nephew.  To my surprise, those advocating for hiring the nephew and those saying they wouldn’t were almost evenly split.  Those in the former group saw nothing wrong with receiving favourable treatment in return for providing a benefit.  My jaw dropped when one student suggested, in total seriousness, that he would hire the nephew, accept the neighbour’s offer to sell the house without commission, and then terminate the nephew before the expiry of the three months probation period.

 

thical training is important, but is it really effective?

Photo courtesy of nappy from Pexels

The $64,000 Question

So…why don‘t employees and people in positions of responsibility walk the ethical talk?  Having worked in compliance during the latter stages of my professional career I would submit the following are some of the major reasons:

  1. The risk is worth the reward.  Sometimes, the potential advantages that could be derived from turning a blind eye, or committing a certain act, are so great that employees believe the risk is worth the ultimate reward.  This behaviour is then rationalized on the basis of it being a “one time only” occurrence.
  2. No one ever suspects they will get caught. Most employees think they are impervious and can get away with it.  They never suspect that someone may be watching or checking.
  3. Employees don’t connect their actions with consequences.  Several times in my career I was required to investigate incidents of employee misconduct. Invariably, when issues were brought to the attention of the employee they often defined it differently, or minimized its impact.  Denial became commonplace.  Simply put, no one assumed responsibility for their actions.
  4. The ethics training employees often receive isn’t realistic.  From experience I can tell you that most ethics and compliance training is laughable.  Concepts such as “conflict of interest” or “fiduciary trust” are presented as abstract, theoretical concepts rather than practical standards that must be followed.  Solid, relevant examples of what is and isn’t acceptable behaviour are lacking.  If companies can’t provide realistic examples to explain ethical and unethical conduct they shouldn’t expect employees to “connect the dots”.
  5. Fear of Failure.  A fear of failing, or a belief that coming up short may result in disappointment or disapproval, can often drive people to act unethically.  You see this a lot in the school system where the pressure to succeed today is unrelenting, and causes students to take risks and cheat in order to gain a competitive advantage.
  6. Retribution.  Sometimes employees will cheat in order to extract revenge on another employee or their supervisor.  Whether it is fudging budget estimates, padding expense reports or stealing supplies from the supply locker, a lot of people do it on the guise that somehow their employer “owes them”.

A Final Thought….

Ask 100 people if they are honest and I suspect the overwhelming majority will respond “yes”.  But honesty isn’t necessarily an absolute.  Like any value or characteristic it exists on a continuum.  There are varying degrees of honesty, and sadly, the threshold at which some will compromise their principles or act without probity is lower.

There are some psychometric tools available on the market now that, purportedly, can measure a person’s degree of integrity or honesty.  I’m not knowledgeable enough to offer an intelligent opinion on their merits.  What I do know is that there has been a noticeable decline in the willingness of employees to accept personal responsibility.  Until people accept that their actions and conduct define them, and until they are prepared to assume direct accountability for their behaviours, then talking the ethical talk will continue to be a lot more common than actually walking it.