Christopher Bauer's Ethics Nexus

Great Research (And Some Good News) From The Ethics Resource Center

The Ethics Resource Center has released this year's study of ethics in the workplace. It is no surprise that, as usual, it appears to have been an extremely well done piece of research. It is a surprise, and a pleasant one, that their findings show some unexpected positive progress in workplace ethics in the last year or two.

As usual, they mine their data well and their commentary deserves close attention. (In other words, the summary I'll provide here is really just the tip of an iceberg well worth exploring in depth if you have an interest in the state of corporate ethics in the U.S.) That said, here are some of the key findings, primarily as summarized in their executive summary...

Based on 2009 interviews with 2852 employees in the U.S. private sector, changes observed over the last two years include:

1. Seven percent fewer employees observed misconduct in the workplace.

2. Five percent more employees reported misconduct once observed.

3. Two percent fewer employees felt pressure to engage in misconduct.

4. (The one significant negative finding.) Three precent more employees perceived that they were retaliated against in some manner because of their having reported misconduct.

Again, these are simply a summary of their key findings and a thorough reading of the study provides a great deal more depth. 

Among their warnings? That these findings may well represent a transient improvement and that companies need to pay close attention to passive or active pressures to return to 'business as usual' (i.e. a reversal - or worse - of the current findings.)

Among my warnings? It's great that these overall improvements have been reported. However, let's all remember that the above findings are relative to past findings and that many of the numbers, outside of that context, remain dismal at best. For example, in the ERC's sample, only 26% of employees perceived their top management's transparency to be "strongly open and informative", only 41% felt that all management levels in their organization were "strongly accountable", and in the ERC's extensive list of specific forms of misconduct observed by percentages of the workforce, few significant changes appear to have been made in the last two years. (Although, thankfully, most of the changes were in a positive direction, all but a few were only one or two percentage points different and it is not clear whether or not those changes, however positive looking, are actually statistically significant.) 

As always, the ERC is to be commended on their great work of which these reports are but one component. Also as always, however, we need to stay well aware that even the positive changes shown by the current study are less heartening than we might like and that they may be entirely transient if we don't continue to work to improve both private and public sector sector ethics, not just in the U.S. but worldwide.

City Government Ethics - What's Wrong With Them and What Can Be Done?

Over the last few years, I have had the pleasure of providing ethics programs for a wide range of city, county, state, and provincial officials as well as their staff members. These folks are often the target, rightly or wrongly, of accusations of every imaginable type of ethics problem. Unfortunately, the widespread findings of confirmed corruption among such officials and their offices make them an ever-more easy target. Within this wide group of officials, however, city officials seems to be accused far more often than the others. (I am, admittedly, not certain whether this is due to an actually higher incidence of ethical problems at the city level or simply because there are a whole lot more city officials than there are county, state, and provincial ones. In either case, though, the number of city officials finding themselves in hot water over ethical issues is persistently staggering.)

Despite the high rate of ethics problems among city government officials and their staff, these are usually hardworking and caring people with a strong commitment to public service. So what could the problem possibly be?

The most frequent explanation I hear is that power corrupts. In this particular case though, I don't buy that, especially where anything other than criminal corruption has occurred. Why not? For starters, far too many of these folks simply don't have all that much power by which to be corrupted. Though a counter-argument could be that power is relative and any government position, by definition, provides some level of 'corruptable' power, I just don't see that happening in most of the cases of which I become aware. In fact, in at least some of these cases, the problem occurs when an official is trying to get a job done for which they have the responsibility but inadequate power and so they 'over-step' in some way to try to get the job done in the absence of having the actual authority to do it in the way in which it is supposed to be done. In the alternative, sometimes they act inappropriately in response to their frustration with the limits of their abilities to get the job done. None of this makes their inappropriate behavior acceptable, obviously, it just means that 'power corrupts' isn't really the issue in nearly as many cases as many folks want to assume.

So what is the problem with city government officials' ethics? In my experience, the problem is usually a whole lot simpler that it might seem. These aren't criminally-prone folks out looking for a way to use their jobs as a way to make a quick buck. (At least, there are no more of them doing that than in any other line of work.) Rather, they are folks under particular scrutiny, with positions of significantly-greater-than-average public trust, and whom are usually given no better training on ethics and values than any of the rest of the world. 

True, in many states, city and county officials are taken through a basic 'always-do-this-and-never-do-that' review of the rules. However, those are typically brief, broad, generic, and without any follow-up. In other words, little guidance - or, at least, little really helpful guidance - is given that can effectively help shape the ethical thinking of new or returning officials or their staff. Instead, most city and county employees are simply told, in essence, "go out there and get a ton done and, oh-by-the-way, remember to always do the right thing ethically", all with the virtual absence of training on what it really means to do the right thing.

Like in any other field or industry, a little bit of well-conceived and well-implemented ethics and values training - coupled with appropriate oversight and coaching/mentoring - can help city officials do a far better job with ethics. Don't just tell them the rules, have them sign off on having received a copy of the ethics code, and leave it at that. Help them learn what the values are on which the rules are based and then show them clearly, carefully, and comprehensively how to focus on those values in their day-to-day decision-making. This isn't a complicated process but it's one that needs to be done in cities and counties of all sizes to help officials do a better job of building and maintaining their professional ethics. Once done, if done well, city and county officials will be able to far more consistently do the right thing ethically and, in turn, both earn and maintain the essential trust we all want to place in them.

Why Truly Successful, Ethical Companies Rarely Talk Much About Integrity

I was writing an upcoming Weekly Ethics Thought on integrity and found myself struggling to find examples of great, ethical companies who talk much about it (integrity). It seemed like an odd paradox to me until it occurred to me that so many of the organizations I admire don't really need to talk much about integrity - they're too busy modeling and reinforcing it their behavior both internally and with their customers and communities.

When one looks around, though, integrity is seemingly on everyone's lips these days as the 'it' business word of the moment. In those too-rare companies with values statements, integrity is usually trumpeted at the top of the list and integrity shows up more and more often in employee performance reviews. As it turns out, I think these are lousy and destructive trends. Here's why - it's not that I'm somehow 'anti-integrity' but, rather, that few people can actually tell you what they think it means.

Ask around and I'll bet you are likely to find the same thing I have which is that most people in business define integrity more or less in the "I-can't-really-define-it-but-I-know-it-when-I-see -it" style. That gives employees nothing of value to work with for the same reasons we are all admonished not to use phrases like "bad attitude" on performance reviews. If you can't give explicit behavioral examples of what you want and expect from employees, they have no basis on which to either modify or evaluate their behavior. 

It seems to me that unless you can give employees clear, specific, relevant, and meaningful examples of what you mean by integrity, it has no place in your corporate lexicon. Period.

Look at the leaders, managers, companies, and associations you admire. Do they really say all that much about integrity? My money says that, if they even use the word much at all, they probably spend waaaaaay more time talking explicity and persistently about what it actually means in real, live observable, 'do-able' terms.

Ethics and Social Networking: Can You Afford Not To Have A Policy?

The age of Twitter, Facebook, LinkedIn, Friendster, and myriad more social media and social networking sites has opened a whole new range of opportunities for ethical problems on the job. Inappropriate comments and disclosures of every imaginable type are just a few easy keystrokes away and employees seem to have become desensitized to the visibility, 'searchability' and longevity of their online words and images. Libel and non-disclosure violation risks are problematic with social media and social networking while reputational risks - for companies and individual employees alike - are both constant and extreme.

Despite the above omnipresent risks, most companies seem to be yawning their way through the many very real ethical and legal risks presented by social media/networking sites all day, every day. In fact, "all day" may be a poorly chosen phrase since those same risks extend to what employees are also posting all night, away from the job, through those same networks.

Here are a few frightening figures from Deloitte's 2009 Ethics & Workplace survey:

• Only 22% of executives in their sample said they had formal policies regarding employee use of social networking.  
• 24% of their employee sample did not know if their company has a policy for social networking use on the job and another 11% believed that their company has a policy but did not know what it was. 
• Although 74% of employees surveyed believed that a company's reputation could be damaged by social media posting, 53% still felt that their posts were none of their bosses business. (!) 

There are plenty of other interesting (and disturbing) data in that study but I think you can get the general drift from these few findings above. For what it's worth, the Deloitte findings are entirely consonant with the anecdotal reports I hear day after day from frontline employees and executives alike.

To make matters worse, many of the companies who have, in fact, developed social networking policies have created ones that are either overly ambiguous or absurdly strict and unenforceable. Neither can reasonably be expected to accomplish what a well-conceived and appropriately implemented policy should (i.e. reduce the risk for ethical and legal problems).

It seems to me that this really isn't rocket science...

For starters, why would you ban the use of social media and social networking on the job? Used appropriately, effectively and ethically, they can be among of the most powerful tools currently available for building your reputation and brand alike. Employees need to know how and how not to use them, not find themselves prevented from using them. (Besides, if you think your employees aren't using them, you are - at best - fooling yourself. Get over that delusion and, instead, use your time to help employees harness social media in a manner that is positive for your company as well as for both their professional and personal reputations.)

Like with any other policies and procedures worth writing, make sure that your social media policies are clear, enforceable, and that you can and will hold all employees to them, no matter how high or low their stature or role in the organization.

Something else to think about... Consider the possibility that problems with social media postings represent real problems in the organization and not just poor judgment on the part of those posting. Just because something shouldn't be posted in public doesn't mean that it shouldn't be taken seriously. If a post suggests a serious issue, don't punish the person making the post - look into the problem! (Mind you, you may also need to counsel the person doing the posting about other, more appropriate ways to report problems but that's a different and necessarily separate issue.)

Also, consider that inappropriate use of social networking and social media sites on (or about) the job might be more a reflection of your hiring, training, and supervision practices than a problem with your social media policies or lack of them. If you are hiring and training with an ethically-attuned agenda, you really shouldn't need to be telling employees much about what to say or not say online. That doesn't mean that a well-written policy isn't still a good idea, just that - at least ideally - it should only need to be a formality. Perhaps needless to say, dealing with social media/networking use on the job should really be no different than handling most any other potential ethical and legal risks in your business. Meaning? Ultimately, the most effective risk reduction will always come from your company's culture and not a rule book.

So, can you afford not to have well-conceived, well-implemented, and appropriately enforced social media and social networking policies? Sure - but only if you happen to have developed a culture that effectively provides whatever those policies would have stated had you, in fact, developed them. (Such cultures do exist, of course - Zappos.com comes immediately to mind.) What you can't afford to do, though, is blandly ignore either the significant ethical and legal risks - or, for that matter, the significant potential business benefits - these social networks so easily provide.

Are We Losing Our Legal and Moral Protection?

Politicians have long been the butt of jokes about integrity to the point that we largely yawn when yet another corruption scandal emerges. When our eyebrows raise, it's usually because the offender was such a vocal advocate of fighting corruption or a similarly vocal advocate for moral values, however defined. Elliot Spitzer comes to mind as an example of the former and examples of the latter are legion and ever-growing.

Religious leaders have their own history of fallen scoundrels from the middle ages up through modern times, even long before factoring in allegations of sexual abuse in various churches.

Given all of the above, it should be no surprise that we are subject to a seemingly nonstop parade of greed, avarice, and corruption from all quarters, including from those who are presumably charged with guarding our legal, ethical, and moral fiber. Yet, even despite my moderate state of jadedness about such matters, I found myself catapulted past my comfort zone yesterday when I read in short order first about politicians and rabbis caught up in a major New York and New Jersey money laundering/bribery/you-name-it-and-it-happened scheme (Body parts are alleged to have been sold for cryin' out loud!) and then about Deborah Duffy, a corporate chief compliance officer who has now entered a guilty plea to charges of money laundering, securities fraud, and conspiracy. Maybe it was simply a matter of seeing too many charges for too many people in too many positions of trust, all in rapid order, but somehow it got to me.

Maybe I'm actually not as jaded as I have come to believe. Or, maybe the age of instant, worldwide news simply makes us more aware, more quickly of how many lapses in our protection have been occurring right along but without our catching either their numbers or breadth. Or, maybe we really are dropping - notch by notch - into times where the number of proverbial foxes guarding our legal and ethical henhouses is climbing. 

Frankly, I don't care for any of these options. (Well, okay, maybe it wouldn't be so bad if I were a bit less jaded...) However, my fervent hope is that the last option is by far the least likely of the three. Time, I suppose, will tell.

Why Behavioral Safety Is Boring and Why It Matters To Us All

Over the last couple of years, I've been called on to provide a few behavioral safety programs - not because I consider myself a safety expert but because I've made the case that ethics are fundamentally intertwined with safety promotion concepts. (The tie-in being that both speak to how folks can learn to do the right thing rather than simply what is easy or convenient at the time.

Here's what I've learned as a relative outsider to the field of behavioral safety training... It's borrrrrrring! Not because it needs to be. In fact, it needs to not be boring so that individuals and entire companies alike will get engaged and enthusiastic about the process of promoting safety.

Yet, the programs I've seen are remarkably like the business-world ethics programs in which I often find myself. They are dry, academic, coma-inducing affairs that provide information which is difficult to actually apply. Now granted, I've been in precious few safety programs so there is always the chance that my observations are the result of sampling error. In fact, I'm certainly hoping so.

If my observations are an accurate image of the norm, though, it is both sad and frightening. Companies unable to create a culture of safety not only increase the illness and injury risk to their employees but to the public they serve as well. 

The solution is actually pretty simple, it seems to me - at least from a conceptual standpoint. The first requirement is for companies to focus more on developing cultures of safety than on simply pounding the rules into employees' heads. There are plenty of great examples out there of how to do that. Just observe how any number of truly values-driven businesses do their stuff. The second requirement - and this should be the simpler of the two - is to create safety training programs that are unforgettable, interactive, instructive experiences. They don't necessarily need to be fun though that has considerable advantages. Fun or not, though, they need to be both experiential and engaging - not yet another PowerPoint program droned from the front of the room. Not sure how to do that? Bring in someone who can! The costs for that will pay off many times over in increased employee engagement and improved safety. (It seems like a no-brainer in my mind but maybe that's just me...)

Once we can get employees truly engaged in their learning about safety promotion, it will be a safer world not just for them but for all of us who come into their working environment.

Bernie Madoff Sentenced To 150 Years: Is That Enough?

So, to not too many folks' surprise, Bernie Madoff has been sentenced to 150 years of prison time for his record-breaking Ponzi scheme. Is that sentence long enough? I realize that such a question can inevitably only appear to be either facetious or based on a retributive motive. However it is neither. Is is rather, an honest question having to do with what such a sentence actually means to whomever cares to analyze it.

Whenever such sentences are handed down, regardless of the crime, I find myself wondering what the message is that we're trying to send. Madoff's sentence is, of course, actually one of life in prison - so why don't we call it that? Does "150 years of jail time" deter more prospective fraudsters (or whateverers) than "life in prison"? Does a sentence of 150 years of jail time deter a third more criminals or prospective criminals than does 100 years? If the intended message is - as I presume it to be - that 'we will prosecute you to the fullest extent of the law', then what message do we send when only the most egregious of crimes really see prosecution to the fullest extent of the law, and frankly, rarely even then?

Sentencing, aside from punishment or rehabilitation, is intended to send a strong message to others who might tread on the same illegal paths as those receiving the sentencing. Fair enough. So then isn't it time we looked at what message we are really sending and then align our fines, jail time, and efforts at restorative justice with those intended messages? Many, of course, will say that we have done exactly that by developing systems of specific, enforced sentences for certain crimes. Others will say that we're simply doing the best that we can with a difficult system of justice which, nonetheless does its best to be both fair and equitable. However, sentences like those for Bernie Madoff seem to always lead me to question whether or not we have really gotten very close to figuring any of that out. No matter how you cut it, 150 years feels like an oddly arbitrary amount of time.

So, is Madoff's sentence too short? Too long? Only the partial appropriate response to his crimes? The wrong response to his crimes altogether?

I won't pretend to have the answer to these questions but I think that we are all remiss if we don't struggle a bit with answering them - both as individuals and as governments - as well as we may be able.

Thoughts?

Interestingly, several hours after the above post was written, the transcript of the Madoff sentencing hearing was released. So, if you'd like to know the sentencing judge's answers to the questions I posed, they can be found right here - near the bottom - in the Madoff sentencing hearing transcript.

Is Your E-Discovery Strategy Modeled After Ostrich Behavior?

In preparing for an upcoming edition of my Weekly Ethics Thought on electronic records and communications essentials, I talked with several executives about their e-discovery strategies, policies, and procedures. While I wasn't surprised to hear that they are getting ever-changing and often-contradictory information about how best to develop relevant and appropriate policies and procedures, I was surprised to hear how many of them have no clear strategy at all simply because they felt that the case law hasn't yet clarified enough of the relevant issues. This strikes me as extremely dangerous. As always, sticking one's head in the sand is neither legally nor ethically defensible.

At the absolute very least, even the experts who are at war on everything else seem to agree on some essential basics so those can be a starting point for any set of policies and procedures:

• If you wouldn't write it, sign it, or initial it on paper, don't write, sign, or initial it electronically. Even though it's true that case law continues to emerge in this area, the trend clearly points the way towards all electronic communications carrying the same responsibilities as hard copies have.

• If you wouldn't throw out a paper version, don't delete the electronic version.

• Assure that electronic communications can be safely stored for as long as required by current mandates and good judgment, the latter sometimes supporting the case for longer retention than the former. 

• Develop systems allowing both easy and effective searches of your electronic data so that accurate and complete data can be located quickly, confidently, and securely.

• Makes sure that everyone with access to electronic communications is fully trained in your policies and procedures pertaining to those communications. (I know that probably sounds obvious but, as is true with so many other kinds of training, many companies seemingly arbitrarily decide who will get essential training and who won't...)

Will your policies and procedures need to change as ethical and legal mandates become more clear? No doubt, just as they will need to continue to evolve as electronic communication and related technologies continue to evolve. If your company is waiting for either one of those to slow down before developing a strategy, though, you'll never have one - and that spells all kinds of trouble down the line.

Ethics Training: Are We Expecting Too Much From It or Too Little?

One of Chris MacDonald's ever-thought provoking blog posts ("What's More Important: 'Social Responsibility' or Basic Honesty?") quoted and led me to Peter Foster's recent post ("Trading Honesty for 'Social Responsibility"). Though admittedly not the central idea of Foster's post, the quote that caught my eye was this:

"It is surely also intriguing that the current financial crisis should have come after an explosion in the business ethics industry and the steady rise of the corporate social responsibility movement up the corporate hierarchy. You would be pushed to find any financial institution involved in the current debacle who was not dedicated to the very latest in independently monitored and internationally benchmarked governance practices, complete with high-sounding “codes” and commitments to carbon neutrality and fighting child poverty. And wasn’t the regulatory side of corporate governance meant to have been rendered cast iron by Sarbanes-Oxley? "

Of course there is plenty to ponder in this comment - as well as the rest of the article - but what stuck out to me was the recently-familiar implication that ethics and compliance training programs are simply not an effective piece of the response to the ever-rampant ethics problems to which we seem to see no end.

I think we all know by now that Enron had what could reasonably be called a model ethics code and that Sarbanes-Oxley hasn't miraculously made corporate fraud a thing of the past. Okay. But does that really tell us anything about whether we are expecting too much from ethics programs? I don't think so...

So, are we expecting too much from ethics training programs? Absolutely - if you think that these programs are supposed to somehow keep criminally-minded fraudsters from plying their trade. No ethics training program I know would have kept Bernie Madoff from being Bernie Madoff any more than they would have kept Al Capone from being Al Capone. However:

1. I know of no credible ethics training program that claims to magically convert the criminally-minded into the saintly. (And if you know of one, I'd suggest that their own ethics need some serious adjusting...)

2. A well-conceived and appropriately implemented ethics training program ought to help those wishing to do the right thing to be more easily and persistently able to do so.

3. Such a well-developed ethics training program ought to also help those honest folks more easily recognize and respond to the inappropriate actions of others, thereby reducing the potential impact of wrong-doers, whether or not that wrong-doing was intentional or a matter or either poor training or bad judgment..

4. The how-can-a-company-attending-to-ethics-still-have-Enron-like-problems question doesn't really wash in the fist place. Why? Because research shows repeatedly that the percentage of ethical problems caused by truly criminally-minded folks is barely even a blip on the statistical screen. A number of those folks will always be out there and, true, ethics training or a "high-sounding code" is unlikely to do a lot about them. However, for the overwhelming majority out there who really want to do the right thing, an appropriately conceived and delivered ethics training program can be extremely beneficial. Don't buy it? Look at the research from the Association of Certified Fraud Examiners, the Ethics Resource Center, and others showing - over and over again - that companies with ethics programs sustain dramatically lower fraud loss costs, etc. Quibble if you like that most of the data are correlational but I don't believe that significantly dampens the findings - it still makes the case that attending to ethics is related to improved employee behavior.

So, are we expecting too much from ethics training? Sure, if you want it to do more than it reasonably can. However, I think the far bigger problem is companies who merely give it lip-service or, perhaps, a half-hearted effort at implementation because they see it as either irrelevant or probably ineffective. With that attitude going in, any program's effectiveness will be hobbled right from the start. Once organizations see the the huge ROI of programs that are actually well designed, appropriately targeted, and fully implemented, I think they often come to see that they've actually previously been expecting far too little from ethics training.

Your thoughts?

Who's Responsibility Is Corporate Social Responsibility?

I don't focus much on corporate social responsibility (CSR) in this blog. Now and then, though, issues in CSR find their way into my thinking about business ethics in general and the updating of a recent Weekly Ethics Thought on our over-reliance on 'tone at the top' got me thinking about a parallel issue in corporate social responsibility.

It seems I'm reading more and more complaints from consumers and employees alike, all feeling angry that corporate leaders are not 'allowing' CSR to flourish as it should. While I share their distress in large part, I find myself chafing at comments suggesting this lack of corporate support for CSR within organizations somehow prevents those complaining from fulfilling their personal vision of what CSR is all about. It seems to me that this attitude fundamentally means that they're bailing on their personal responsibility for promoting the values they espouse.

1. As for employees - as with all things ethical - a lack of 'tone at the top', however unfortunate, never prevents local action within an organization. There can be departmental initiatives and there can be individual initiatives and all can create tangible results . Obviously, neither of these ought to reduce one's efforts to promote better corporate citizenship on the part of the larger organization. My point is simply that we need to not use poor organization-wide policies or practices as an excuse to avoid making a difference where we can.

What can you do in your particular role and in your particular company? Beats me because we all work in different capacities and in different types of industries. BUT, my money says that you're fooling yourself if you think that you can't figure out how to make some kind of tangible difference with a little thought. Hopefully your efforts will light others up and have some degree of viral impact. However, it seems to me that the only real measure of success is whether or not you are persistently working at ways to bring your stated values - and your business' stated values - to life. Anything beyond that is simply a wonderful bonus.

2. As for consumers - vote with your activism and wallet. Will you make a difference as a single voice? Again, beats me. However, at worst you'll sleep better at night knowing that you've been true to your values and, in all likelihood, you will have actually been a part of a larger movement that will hopefully have a collective impact on the business or industry about whom you are concerned.

Is an appropriate 'tone at the top' hugely helpful in creating and sustaining appropriate CSR efforts? Obviously so. However, to use the lack of such tone as a reason not to work towards a smaller scale difference strikes me as being essentially similar to complaining about the government but refusing to vote.