It’s been some time since I served as Chair for DePaul University’s Institute for Business and Professional Ethics. However, business ethics and ethics in general continue to be of great interest to me.
Despite the multitude of universities that have integrated ethics courses into both undergraduate and graduate courses, and the vast number of companies and governments (local, state, and federal) that have drafted and redrafted ethics and conduct statements, the number of unethical cases seems to occur with increasing frequency. We track these at IPM on a regular basis and use the case studies as part of new employee onboarding and annual refresher courses on ethical deliberation and decision-making.
Complacency or Complicity?
So why is it that despite all these efforts, there is hardly a day that passes that does not include a story about a major ethical breach? I believe that we have become extraordinarily complacent and accepting of individuals and organizations that betray our trust. Unless we are directly and personally victims, rarely is there outrage. When was the last time you saw or read about a large-scale demonstration protesting unethical practices? Instead of outrage, there is apathy, and the perpetrators know it.
Recently, I had the opportunity to ask several C-level individuals a simple question as part of a larger survey endeavoring to gain insight on industry trends, opportunities, and challenges. I asked if they considered suppliers’ and partners’ ethical dispositions, legal histories, and reputations (related to conduct and values) important. Not surprisingly, each person affirmed that these considerations are very important. However, no one was able to provide examples of how this “character scrutiny” is being incorporated within their procurement processes. The simple truth is that it is not being done.
In IPM’s proposals, we incorporate a Professional Conduct statement: “To maximize the benefits and synergy of the relationship between Client and IPM, it is imperative that the relationship be established and maintained through mutual trust, cooperation, and respect. To this end, the parties will strive to conduct business and every interaction with the underlying goal of producing measurable value in an honest and ethical manner…”
Believe it or not, some clients view this statement as overly restrictive. On more than one occasion, I was told directly that the client could not guarantee everyone in the organization would be compliant, and therefore, it represented a potential liability.
In my own industry, there have been many instances of unethical, and in some cases illegal, conduct by well-known firms, often resulting in penalties imposed by regulators. These penalties could not be described as “hefty,” for in most cases they equated to a rounding error when compared to the firms’ overall revenue and profit. Other than exceptional cases (e.g., Arthur Anderson), one might reasonably argue that the reward for unethical actions was worth the penalty.
Bring Back Ethical Deliberation
The examples of unethical conduct across the spectrum of organizations are numerous, but what does that mean for your business and what can you do about it?
Remember, conduct, especially at the leadership level, influences culture, and culture either inhibits or enables organizational performance. Unethical conduct within an organization does not need to be, nor is it typically, newsworthy. Small infractions ultimately lead to rationalization and justification of greater infractions that, with time, become more acceptable.
Consider taking the following steps:
- First, lead by example and hold yourself accountable. Have you clearly defined your uncompromising values, those influences that will drive your ethical deliberation?
- Consider whether your personal values align with those of the organization to which you contribute precious time and talent. If the organization’s values haven’t been defined or are ambiguous, take the initiative to bring this to the leadership team.
- Determine whether your leadership’s behaviors and decisions are consistent with the organization’s espoused values. Is conduct being assessed and considered equally important to work contributions?
- If you are in a leadership role, define your organization’s values as part of the strategy development process. Values, more than anything else, determine organizational alignment. Hold yourself accountable for demonstrating these values in words and actions. Continually enforce compliance and promotion.
- Consider the ethical consequences of decisions, even the small ones. It is too easy to be overly influenced by options that may generate near-term benefits but create long-term negative impacts on people and the organization’s sustainability.
- Have the courage to call out unethical behavior. This may not be easy in a highly political environment that has confused and diluted values.
- If you cannot influence change, find an organization whose values align with yours. This requires significant due diligence, as what you see and hear initially may be misleading.
The Survival of Capitalism Relies on Ethical Leadership
In conclusion, I want to challenge you to be ethics warriors. It is critically important that we stem the tide of dishonesty, greed, and corruption that has created an ugly scar on capitalism, the only system proven through history to raise the economic standard of the masses.
October 2, 2024
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