Christopher Bauer's Ethics Nexus

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.

GREAT Ethics Video Clip From The Los Angeles Schools!

It's gotta be tough figuring out how to make a commentary video on the importance of ethics education actually be cute, let alone cute and effective at the same time. However, the Los Angeles Unified School District has made it happen. I gather that this has been out for a while but I just stumbled onto it now.

Give it a look... Great stuff, I thought!

Has The Global Financial Crisis Helped Change Corporate Ethics For The Better?

The question I seem to be getting over and over these days is whether or not I feel that the global financial crisis has yet had a positive impact on corporate ethics. The best answer I can give is that I only wish it were so.

Despite the perpetual wringing of hands, statements of grave concern, and well-publicized vows of better controls, I can't say that I've actually seen much change. In fact, things remind me more and more of the period following the Enron collapse. Then, as now, ethics were on everyone's lips and bold commitments were made to shore up badly needed repairs in the corporate fabric. Though we got Sarbanes-Oxley out of it here in the U.S., the reality on the front lines was that not much else had really shifted. The primary change, as I have maintained ever since, was that there was a dramatic increase in the number of folks professing to be concerned about the ethics of their companies and industries. Otherwise, most things were pretty much business-as-usual on the front lines. 

Even when post-Enron professions of interest in better ethics were heartfelt, in most companies they never actually translated into much. In fact, we have seen ethics problems move back to pre-Enron levels in a variety of industries as I have posted about previously. Sadly, it's been a dismal showing all-in-all and, of course, we have the current global financial crisis as yet another flamboyant measure of that.

Being the pathological optimist that I am, I continue to hope that the current global financial meltdown will have significant, positive, and lasting impact on corporate ethics. However, at least to date, no matter whom one asks, ethics continue to always be someone else's problem rather than the problem of the individual or entity with whom one is speaking. Until that shifts, I'm afraid that we haven't got the remotest chance for positive changes, let alone lasting ones.

Edelman's 2009 Trust Barometer - A Reflection of Ethics and the Global Economic Crisis?

Edelman has released it's 2009 Trust Barometer and, as always, it is essential reading. 

It can't come as a surprise that trust in corporations is at an all time low and it certainly doesn't seem like a stretch to suggest that this lack of trust is simultaneously a cause and effect of the current global economic meltdown.

As always, there is a lot of good reading to be done through reviewing the entire document but a few of the highlights (or, perhaps, lowlights...) are that:

• there was a 20% plunge in their sample's trust in businesses to do what is right. Mind you, that would be a huge enough issue but remember that the figure was already at an alarming 58% previously. Now it sits at a terrifying-but-hardly-surprising 38%. 

• Only 27% of their sample felt that information coming from a government official was credible and 29% felt it was credible coming from a corporate CEO. (That latter figure drops to a mere 17% when looking at the U.S. sample of 35 to 64 year olds.)

• Globally, 62% of their sample said that they trust corporations less in the last year than the year before and remember, this is relative to the year before. We're talking about a level of trust that was already heading south out and has simply continued to fall.

Though these figures shouldn't be big surprises, sometimes it's helpful to have some specific support and metrics for what we simply presume to be true.  

As one of the innumerable steps needing to be taken to somehow quell the current economic crisis, trust in companies needs to be restored. Mind you, this was already a problem of significant magnitude prior to the meltdown but it's now gone from being a really good idea to an essential component of the equation. The foundation for increasing that trust? A fundamental shift to cultures of unbending ethics in those companies. Among so many other things, this means not just promoting corporate social responsibility as a PR tool but a true, systematic and system-wide shift in how these companies do business. (And, of course, this also requires coming to the realization that CSR, in itself, in no way means that there is a culture of ethics. CSR programs are an extension of corporate ethics - and an entirely optional one at that - not a substitute for them.) 

Will all this be easy to do? Certainly not. But it'll beat the pants off of going under which is what so many of these companies face doing unless they make the shift to to functioning with highly, conspicuously, and persistently ethically-based operations.

PR's Role In Ethical Business and CSR: Tips for Consultants of All Kinds

Nice article in The Firm Voice (a publication of the Council of Public Relations Firms) on PR's role in reinforcing the need for ethics and CSR in communicating with their clients. Though I was appreciative that they quoted me, the strength of the article is in the range of views from a variety of PR experts (unlike myself...) who do a nice job of collectively providing both tips and rationales for keeping a frank and persistent discussion of ethics in the conversation with clients. Even though the piece is geared towards PR professionals, the ideas in the piece feel like a great fit for experts - and perhaps particularly consultants - in all fields.

Though I'll strongly suggest reading the entire article, one quote that particularly stood out to me was from Ann Subervi of Utopia Communications who said:

"Too many agencies use CSR, ethics and reputation management as buzz words to close a sale. They would do well to make sure they are internalizing these concepts before they look to sell them to others. Few agencies actually do true ethics training, and fewer still enforce ethics among the rank and file—or their clients."

Amen on all counts, I'm sorry to have to say. All-the-more unfortunate is that her comments hold true for so many companies in so many different industries with whom we all seem to deal every single day.

More Information on Ethics Programs for Social Workers, Counselors, Case Managers, and Psychologists

I wasn't expecting quite so much email on the announcement of my offering ethics training programs for behavioral health and rehabilitation professionals. It's been terrific to know that there is so much interest, though! To provide more detail, I've put up a page on my website with information specifically on these programs. If you'd like to be on the notification list for upcoming programs - or if you might be interested in arranging an in-house program for your clinic or agency - you can use the information request form right on that page.

For the few of you who wondered if I'm moving away from my other ethics programs for businesses and associations - not at all! As always, information on those programs can be found at www.bauerethicsseminars.com. In the coming year, it is my hope to start doing a larger number of in-house programs. If you happen to know of a department or company who might be interested in fine tuning their ethics program, I hope you'll suggest that they check out the bauerethicsseminars.com website to see if one of my programs might be a good fit for them.

A Rare Commercial Announcement...

I don't often use this blog as a platform form for selling stuff but now and then I understand that folks may see things they'd like here. So, here's one of those rare commercial announcements in case you're not a subscriber to the Weekly Ethics Thought, where these opportunities have already been announced.

First, let me say that the new product surveys have been extremely helpful! Thanks to all of you who responded. (If you haven't filled one out, it's not too late to let me know which new products and services you'd like to see in the coming year. The very quick survey can be found here.)

 

Here's what the greatest number of you have asked for so far and what will be coming up soon in '09:

 

1.) An audio version of Better Ethics Now: How To Avoid The Ethics Disaster You Never Saw Coming (Second Edition). I expected there would be some interest in this but had no idea there would be so much! (Glad I did the survey!) - It will be $14.99 (USD) + shipping/handling.

 

2.) Ebooks, ebooks, ebooks. The greatest interest so far has been in a collection of quotations on ethics, integrity, and values-driven business. It's already in the works and will hopefully be out before too long. After that, I'll get cracking on several of the other most requested titles. Looks like these are likely to be available for $11.99. (And, of course, they're ebooks so there won't be any shipping changes to deal with. Yeah!)

 

3.) I'm really excited about this one! I don't often have the opportunity to provide more people with more value for less money but this is one of those times. (Hooray!)

 

This will be a major revamping of the expanded audio versions of the Weekly Ethics Thought. Right now, CDs are selling by subscription for $15 + shipping/handling per week. That's $60 - $75 per month and is waaaaay more than many folks afford and, frankly, it's getting to be prohibitively labor-intensive for me. So, with one small change and some economy of scale, everyone win. Here's how this will work:

 

There will be one monthly CD with the entire month's Weekly Ethics Thoughts + significantly enhanced content. In other words, there will be even more content than before, just delivered on one CD rather than four or five. There will be fewer CDs for you to fuss with and far less work for me to create, duplicate, and ship. That extra time is worth a lot to me and I can pay CD subscribers back several times over.

 

Here's how...

 

In addition to the muuuuuuuuch cheaper price for the CDs, subscribers will now also get: 

• A free softbound copy of Better Ethics NOW: How To Avoid The Ethics Disaster You Never Saw Coming (retail value of $14.95) simply for subscribing.

• 10% off any of my books and ebooks as they become available.

• A monthly call-in day where I'll be available for half hour one-on-one consultation or coaching via phone or Skype. This is a value of several hundred dollars in itself. 

How much will this all cost?

 

The first month will be just $5.95 (USD) to cover a portion of the shipping fees for the CDs and the book. Stay in the program - with the various perks and benefits listed above - and at the end of the second month you'll also get another free book (Conversations on Success - It's a book of interviews with a wide range of management and leadership experts and it retails for $19.95).

 

Why all the incentives? I really want this to work for all of us and I hope that making it so easy for you to want to sign up will mean that there will be well more than enough subscribers to make it worth my awkwardly expensive time.

 

So, in the first two months, you'll be getting CDs valued at somewhere between $120 - $150 (USD) before shipping, two books worth $34.90 before shipping, and potentially several hundred dollars worth of one-on-one consultation or coaching. The monthly cost to continue to get those $120 - $150 worth of CDs each month plus the free coaching/consultation calls? $39.99 including all shipping charges. Even if you only use the phone-in opportunity a time or two, you will already have well more than paid for an entire year's subscription. And, that will be before the value of the books, CDs, and other perks. I'll be proud of this one if I can pull it off. So, I believe, will you.

 

Just want the monthly CDs without the other perks? I can still do that too. $19.95 per month (plus a flat shipping charge of $2.00 worldwide) debited to your charge card.

 

Like I say, I'm excited about this one. If you even might be interested in either of these services, please let me know so that I can keep you posted on their status. It can't happen without enough subscribers to provide some economy of scale but we're almost there and I love it that we can all come out ahead on this.

 

Changes in the free Weekly Ethics Thought? Nah. The overwhelming majority of you told me on the survey that you'd like me to keep it just as it is. Done!  :)

 

Again, Happy New Year and here's to a better year for us all!