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Ethics

Every now and again our moral backbone takes a blow. Given the day to day challenges we face many things are an uphill challenge. Most of us welcome a challenge; we work to live, to house our families and to educate our children. Everything else is probably an extra – such as holidays, fast cars and other material trappings. The vast majority of us endeavour to perform these life enriching tasks within the laws of our society and within an acceptable moral code. The recent phone hacking scandals have shaken most of us. There is probably not an adult in the civilised world who is unaware of the recent events with News International, the Metropolitan Police and parts of our Government in the UK. We are only recovering from the Banking crises which impacted the global economy and put to rest, in part probably, the outrageous expenses scandals of many of our political leaders and politicians. I hate to think what would be revealed were a similar exercise performed in the European parliament but I would lay some hefty odds that it would be at least as profound and probably worse. So this is the background against which we normal, law abiding citizens have to work and bring up our children. There is something profoundly rotten with our leaders, our leadership and the behaviour of those we entrust to make and uphold our laws. Clearly there are many upright and principled police officers, politicians and journalists. However, that is not the point. The point is that so many people in high places either were guilty of malpractice or condoned the unethical practices of others.

A good question is, ‘Where did all this start to go wrong?’ My view is that much of this was seeded in the ‘good years’ of bull markets when nobody looked under the carpet or behind the couch while revenues were running high and profits were there for the taking. So is all of this related to ‘money’? Clearly a substantial part of the scandals above are indeed related to money – to personal gain or business growth. Now we are straying into the murky waters of ethics and ethical behaviour. In order to regain some integrity and trust with the electorate, the taxpayer (whose money is often being embezzled) and the employee, ‘enquiries’ are set up with the great and the good presiding and huge budgets to cover the extensive work required. It seems that here in Britain we are establishing a world class competence in ‘Enquiries’. We certainly know how to close the barn door when the horse has well and truly bolted.

Since the WorldCom and Enron scandals every Business School has been required to address the subject of Ethics. It is somewhat surprising how few addressed it before the scandals. We have extremely interesting debates on our Leadership programmes around this vital topic. What is more surprising is the number of delegates who would be prepared to ‘push the envelope’ in order to enhance profits or injure a competitor for financial gain. So we can happily have a wide ranging conversation about ‘right and wrong’ with all the attributable social and theological soundbites. I can see almost everyone in the room visibly growing in self righteous stature. It is only when profits and financial gain situations are introduced to this pious body do we see the visible cracks in the outer casing. The audience becomes quite polarised. Those who would not move across the ‘line in the sand’ and those who clearly would – provided they didn’t get caught! The minute these fiscal ingredients are introduced suddenly the debate changes. Without encouragement nearly all participants are prepared to share some ‘hairy’ practices that are currently happening within their organisations today. So clearly these issues or scandals are not secrets – they are known and condoned.

The adverse consequences of these situations are considerable if they come to light – like Enron and WorldCom. Bribing police officers to feed information to journalists is a pretty damning statement – even more damning when admitted by a Chief Executive in a House of Commons select committee. It is quite amazing that when this was first announced nothing was done about it; no investigation commenced and not even the usual British default of an Enquiry. Nothing. So the great and the good, albeit apparently shocked, stood by and did nothing.

On the face of it, therefore, Ethics seems to be a relatively simple issue. We know what is right and what is wrong and we simply believe that there are enough people at the top of our organisations whose personal values are sufficiently robust to ‘do the right thing’ and report wrong doing. Sadly we have been naïve. Although these issues will continue to remain in the limelight over the coming months I can see no obvious remedy. We simply have to believe that right will out wrong eventually - and that may be as best we can make it. But surely there have to be onerous sentences for people who defraud organisations and the taxpayers or those who commit crimes? I would have thought we have sufficient laws on the statute books already to deal with these situations. Does it need more legislation? I would have thought not. Perhaps we have to examine the sentence fitting the crime and ensure that our judiciary take a strong line on sentences when people are found guilty in a court of law? Ethics has to be taught from an early age. Maybe it is not only a subject for Business Schools and perhaps it should find its way onto school agendas? It would probably add more value to the students than some of the nonsense that does find its way onto today’s curriculum in something loosely called General Studies.

In the world of commerce there have to be more questions asked by senior leaders and main board directors of how business is being conducted. I was always taught that if I knew of a wrongdoing and did nothing about it, then I was guilty of condoning the practice and was in effect an assessory to the fact. Turning a ‘blind eye’ to unethical behaviour should also be treated with a degree of harshness by the courts. Surely this would help in some way? We cannot continue to rely on the courage of whistleblowers who are finally prepared to put their careers on the line in order to comply with their consciences. People who do this are often hounded out of their jobs and some, as in the case of several ex NHS people, have to leave the country. So much for the ethical leadership of those at the top of the NHS and their government masters.

We have to look to our parentage abilities and the teaching in our schools and colleges if we are going to arrest this decline in ethical standards. If we look to our leaders I fear we will be sadly disappointed. Ethics and values have to be on every Board agenda and taught throughout the organisation. No longer can companies get by with a few pious words about ethics in the Annual Report or create an Ethics Committee populated with faceless suits. This has to go to every dark corner of the organisation and touch everyone. This is not about rules and processes and a few ‘tick boxes’. This is about mindset and the very soul of the business. If there is not a training initiative at every level of the organisation to address these issues then you run with a considerable risk – and even then there will always be some risk. This is another show that never ends.

David Ankerson

MANAGING DIRECTOR

INCITE® MANAGEMENT CONSULTING

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