Archives For Ethics

Why Business Ethics?

April 9, 2013

I’ve been making my way around Atlanta speaking to various groups on the subject of business ethics. My talk is entitled Business Ethics – Why the Bother? In it, I make the case that a company can benefit in multiple ways from adhering to high ethical standards. Indeed, I believe it is well worth the bother to be known in the marketplace and society at large as an ethical entity. After all, with the mere summoning of Google and the avalanche of information that can follow, who wants to do business with a shady, ethically challenged company?

Making my way from writing a novel to speaking on business ethics isn’t quite a straight line, is it? While my novel Dare Not Blink is a business thriller, it also deals with ethics. The book’s protagonist, Dave Paige, is a business executive of high character who becomes embroiled in a nasty power struggle with others of another, lesser sort. So does the ethical guy win in the end? Well, for no less than the sake of the American system of capitalism, let’s hope so.

I exaggerate, I confess. That a novel would have a discernible bearing on the survival of American free enterprise is a bit of a stretch, to be sure.

But in real terms the idea of the ethical guy winning in the end has everything to do with our free-market system either flourishing or fading away. Americans are fast losing confidence in many of our long-standing institutions, to include government, the press, the public school system, the church, and business. Some in the political class, who themselves are regarded in a now famous survey as only slightly more preferable than cockroaches, have made a sport of bewailing the behavior of many business leaders, especially those on Wall Street. The criticism is not entirely without merit, in all fairness.

That’s why I’m speaking up. The vast majority of the men and women I dealt with in my business career were virtuous, conscientious people who tried to do the right thing for their customers, employees, and suppliers. Of course they weren’t perfect, but they were guided by an ethical code that drove them to do the right thing. They are the good and righteous nucleus, the backbone of the business profession.

Much work still needs to be done at the executive levels in adopting and then maintaining a rigorous code of ethics in their respective companies and industries. Leadership is critical here, and there is little chance of regaining the trust of the public without the broadly positive examples that only leaders can provide.

Additionally, students of business should be exposed to ethics in a far more intensive way. These are our future business leaders, and the global, ultra-competitive, cutthroat arena they will enter will be fraught with ethical challenges. They should be made to understand that a profession with little appetite for policing itself will bring about the ubiquitous and ruthless regulation from the outside, the cumulative results of which will resemble death by a thousand cuts.

We have lots of challenges ahead of us as a nation. Political, economic, and cultural issues abound, many with implications that could alter our society in ways that we can’t yet foresee or even understand. But our free-enterprise model has done so much for so many, and has so much potential yet unrealized, that its healthy continuance should be central. We should relentlessly seek to improve upon it, but never apologize for it. As far from perfect as it is, it’s still the best economic system in the world. And it’s up to us to make it better.

That’s the reason I advocate for business ethics.

Are you sometimes confused by the meaning of the word integrity? Is it a complicated set of principles that can vary according to a particular moral consideration or a specific set of circumstances? Or is it simply doing the right thing because it is the right thing to do?

Ralph Waldo Emerson wrote that, “Character is higher than intellect.” What does integrity have to do with character? Can you have one without the other?

Think of integrity as the quality of having high moral principles, of being reliable and trustworthy. It does not mean you are nearing perfection as a human being, but rather that you can be trusted with words and deeds. Doing the right thing because it is the right thing to do? Of course. If you are described by others as a person of integrity, would it also follow that you have high character? Yes, absolutely.

Now think of groups of people who are presumed to have integrity. Judges, doctors, military officers, and ministers come to mind. True, we can point to examples in each of the preceding groups of dishonest, immoral, and perhaps even criminal behavior. As with any group—business, politics, sports, education, journalism, etc.—we don’t need to search far and wide to discover similar failings. Indeed, it is our human nature to err.

Next, think how hard it would be for our society to function if trust and honesty were the exception rather than the rule. Samuel Johnson noted that, “Integrity without knowledge is weak and useless, and knowledge without integrity is dangerous and dreadful.” As a group, our elected leaders are losing the confidence of the American populace precisely because we are becoming conditioned by their saying one thing and doing another, sometimes blatantly and defiantly.

Business leaders who shamelessly enrich themselves at the expense of their customers, stockholders, and employees reflect poorly on their firms and industries. Judges who take bribes and teachers who sexually abuse their students give us all pause, and disappoint us greatly.

Why? Because they failed to do the right thing.

It need not be any more complicated than that.

For you, if integrity means doing the right thing, even if nobody knows or notices, then you understand the concept. If you behave consistently and use moral principles, reliability, and trustworthiness as your guiding lights, you can rightfully be described as a person of integrity.

It is a description that is earned, and one that should be prized. If you have it, guard and nurture it. If you don’t yet have it, pursue it zealously. It’s certainly worth the change in behavior you will have to make to earn it.

Finally, my latest novel That Deadly Space deals with integrity and ethics in a very substantive (yet fictional) way, albeit in wartime. The novel’s main character, Conor Rafferty, struggles with his share of moral and ethical decisions. He does his best to be a leader whose integrity becomes his guiding light, and his example underscores the above comments. You can find the book here.

Are you a leader who aspires to set an example of ethical leadership in your organization? If so, you are headed in the right direction.

An organization’s leadership is responsible for influencing others to perform an action, complete a task, or behave in a specific manner. Leaders must be people-oriented, decisive, and bold, with a well-developed ability to inspire and motivate. They must also be able to do what is sometimes inconvenient, unpopular, or perhaps even temporarily unprofitable. Leaders must do all of the above, and those leaders who are viewed as ethical and honest will have a far greater chance of gaining and keeping the loyalty of employees and others. To be viewed as otherwise is indeed a slippery slope.

The following steps may be useful in establishing an ethical-leadership model:

  • Set high ethical standards and meet (or exceed) them. Standards should be established and promulgated for both professional and personal conduct. Those standards should be maintained and monitored, with the leadership team always setting the proper example. Drive a culture of ethical behavior by constant reinforcement and demonstration, and clearly establish that partial or non-compliance from anyone is unacceptable.
  • Openly share information. Transparency should be more than a promise or a slogan. Make sure your employees understand that you share information with them because you trust them, and thus you expect them to make the right decisions because of their being well-informed.
  • Be fair in all personnel decisions. Merit and fairness should always factor disproportionately in decisions affecting employees. Never assume that employees can’t detect favoritism or prejudice; they can. Always assume that examples of unfairness will do great damage to the fabric of your organization; it will. Know that fairness will help gain and maintain trust; it does.
  • Keep your word. This should be common sense, right? Often, however, it’s uncommon practice. Your word is truly your bond. The more your employees can count on you to do what you say, the stronger the bond. They can count on you, you can count on them–there is a direct correlation.
  • Treat everyone with respect. An ethical leader leads in a manner that respects the rights and dignity of others, both within and outside the organization. It is critical that this behavioral characteristic starts at the top; it is not a bottom-up process.

The above steps can help establish in everyone’s mind the importance of ethics. It is the leader’s responsibility to build the trust, set the example, and drive a culture of high ethical standards in an organization.