Remind me again how we got here? Heading off unethical behaviour before it’s too late

Sara Bice“Those are my principles. If you don’t like them, I have others.”

Oh Groucho Marx, you were so, so funny. Until we realised what you were really doing was ironically pointing out our deep, deep flaws. Then the humour stung a bit (or became blindingly misogynist, but that’s another blog altogether).

The flexibility of moral principles and the lack of skilful awareness in identifying ethical issues before they become ethical scandals are central contributors to the global public’s decline in trust in the banking industry. Or in what the global head of Citigroup,  Vikram Pandit, calls the widening Wall Street-Main Street gap.

In defending monolith financial instituions, Pandit asserts that it is not the size of the firm which fuels unethical behaviour, but “the culture of how the institution is run.” Speaking to the Australian Financial Review (paywalled) recently, the leader of one of the world’s largest banks about to mark its bicentennial, said that financial institutions must rebuild public trust. “You have to start by completely acknowedging that trust has been broken,” he said.

But just how did so many massively significant financial (and arguably social) institutions end up embroiled in scandals, which, in hindsight seem utterly obvious as the type one would wish to avoid?

While there is no easy answer, might I humbly suggest that ethical issues are often extremely difficult to identify. Or as ethicists Linda Treviño and Michael Brown write, “Rarely do decisions come with waving red flags that say, “Hey, I’m an ethical issue. ThinkRed flag about me in moral terms!”*

Without oversimplifying, concerted ‘moral awareness’ and an understanding of the likely ethical hurdles we may face can certainly help to both identify and avoid unethical behaviour and the potential public shaming and loss of trust which can follow.

Here, for your learning pleasure and with thanks to ethicist Manuel Velasquez* are some of the most common ethical hurdles you’re likely to face in the course of your career. Know them before they know you.

Euphemistic labelling

“Collateral damage” anyone? Sometimes corporate (or government, or military) speak provides an easy means of downplaying the human or moral significance of an issue. Next time jargon is invoked in your workplace, take a moment to question how this makes you think about the issue at hand. Would you think differently if you referred to people as ‘neighbours’ rather than ‘stakeholders’?

Rationalising our actions

Since Aristotle, human beings have focused on arguing that we’re all rational. And it is therefore only natural (perhaps) that one of the most common reactions to decisions about which we feel uneasy is to put up what seems at the time to be logical reasoning for the actions we’ve taken. One way to avoid false rationalisation: Try imagining yourself in a position radically different to your own. Decision still rational? Well done. Now thank Emmanuel Levinas.

Diminishing comparisons

Ever ‘take home’ (note: euphemistic labelling) a few office supplies while telling yourself, “Hey, it’s not a Porsche”. Welcome to the slippery slope of diminishing comparisons.

Displacement of responsibility

We’ve seen it at Arthur Anderson, Enron, Goldman Sachs and in notorious events throughout history. Displacement of responsibility by claiming that the buck stopped with someone higher up, with someone with more authority, or that you were just doing what you were told, is perhaps one of the most difficult but also most common ethical hurdles to address. It takes a courageous employee to speak out or to stand up when your job or even your livelihood may be at stake.

Disregarding or distorting harm

Ever see that great episode of Mad Men (ok, so any episode with Jon Hamm is great) where Don Draper totally sells Lucky Strike on the notion that their tobacco isn’t unhealthy, it’s ‘toasted’? Disregarding or distorting harm can seem like an ok thing to do when it’s on behalf of your clients or when it’s seen as protecting your business’ bottom line. It’s not.

Dehumanising the victim

Further to euphemistic labelling, simple terminology can go a long way towards helping us turn off morally uncomfortable situations. Labelling women and men being put out of a job as ‘necessary retrenchments’ or talking in terms of ‘staff cuts’ or even ‘human resources’ can distance us from the very human implications of our actions.

Redirecting blame

No one wants to be caught out in poor or grievous behaviour. But it is often the CEOs or government leaders willing to admit and accept blame and rectify behaviours who ultimately gain greater public trust. In time. A willingness to take responsibility and redress grievances can be a corporate strength, but it requires strong internal support and an understanding that the public is likely to be more forgiving than you might expect.

No one ever said being ethical is easy. But being mindful of ethical hurdles before you stumble upon them can be a helpful first step. For the big banks, as Vikram Pandit says, ethics starts by looking outward. “[Trust] has to be addressed by banks serving clients in the real economy, and not serving themselves.”

Dr Sara Bice is a Senior Consultant with ACCSR. She is passionate about corporate governance, business ethics and the uplifting properties of boldly changing hair colour.

*Treviño and Brown (2004). Managing to be ethical: Debunking five business ethics myths’, In: Academy of Management Executive, 18:2,69.
*Velasquez, M. (2012). Business Ethics: Concepts and Cases.
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