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The Laws and Ethics…. Who’s Kidding Who?
By
Paul Shearstone
Years
ago I read an article by a renowned psychologist wherein he wrote his
studies
found one percent of all human beings would never lie, cheat or
steal.
One percent would always lie, cheat or steal and given the right set
of
circumstances, the rest of us would likely lie, cheat and/or steal.
I
mention this to highlight the fact that, if we can buyoff on this one
principle
– sobering though it may be – we have then, a benchmark from which
to
begin to at least try to understand the denigration of ethics that lead
to
outcomes like Enron and WorldCom.
Most
believe morality walks hand-in-hand with unquestioned ethics. A quick
look-up
in a dictionary for Morality reveals words like, ethical, good,
right,
honest, decent, proper, honorable, just, principled and so on. All
good
words, no doubt. Words too that describe what most of us – including
Enron
Exec’s - see in ourselves, Morally Upstanding.
Nevertheless,
there is no shortage of those who climb high upon their perch
in
an attempt to [dare I say] distance themselves from the great unwashed by
proclaiming
their undaunted commitment to honesty and ethics all the while
engaging
in activities to the contrary. Foyer walls of most companies
utterly
ooze words of benevolence and righteousness – there only for others
to
see, but in practice, never to be followed.
To
be fair, the great unwashed are not sacrosanct from unethical behaviors
or
from a reluctance to take ownership for actions deemed untoward. Even if
it’s
something as simple as misusing the Internet or pinching office
supplies
from the company stockroom.
The
fact is, the Enrons and Worldcoms have not cornered the market on
unethical
behavior. Like it or not, moral degradation is systemic in today’s
society.
In
an attempt to enlighten us on the realities of true ethical behavior, USA
Supreme
Court Justice Potter said, [Ethics] “…is knowing the difference
between
what you have a legal right to do, and, what is the right thing to
do”.
Omniscient
words to say the least! Words that in theory make a whole lot of
sense.
In practice, however, one may point out to his Honor, when he is
seated
on the Supreme Court bench and asked to adjudicate anything, his
moral
and ethical position, is and will always be, compromised by one
factor
– in the end, what is LEGAL… what is the LAW?
Climb
any pedestal he wants, in practice, his dedication to ethics are only
words,
like so many words used to make up so many smarmy Corporate Mission
Statements
that run juxtaposed to routine.
The
Judge in this case, should not be criticized for knowing the
fundamentals
of true morality / ethics or for advocating the benefits
therein.
Neither should he be allowed to stand apart from anyone when
clearly,
in reality, he too is handcuffed by the very principle that
challenges
the rest of us - the thing that governs
the outcome of most
every
ethical business decision – IS IT LEGAL?
The
decision to lay-off 1-100-1,000 or more employees; we can do it – but is
it
legal? The decision to withhold commissions, payables or taxes in order
to
weather corporate economically challenging times – Q: What are the legal
ramifications?
The
ethical dilemma regarding whether to cut back on contracted services to
improve
the bottom line and appease the shareholders – Ethics be damned – Q:
What’s
our legal position?
It’s
not a pretty world and it serves no purpose in kidding ourselves by
attempting
to extirpate our own involvement by blaming the Business-Barons
from
the likes of WorldCom. Let’s agree, when faced with most ethical
dilemmas,
we all hide [if we can] behind the skirt of the lady who holds the
scales
of justice.
…………………………………………
The
question still remains, however, how do the Enrons and WorldComs get so
out-of-hand?
The
answer is not all that mysterious, especially if you buy-off on what was
written
earlier - ... given the right set of
circumstances, nearly all of
us
[from time-to-time] will take the wrong path.
It’s
shortsighted to believe high-level executives get out of bed each
morning
thinking about how they can swindle the world, take unfair advantage
or
act unethically. Just the opposite! That’s not to say, however, just like
in
Supreme Court Justice Potter’s case, there are circumstances beyond their
control
that may unequivocally govern decisions, which may challenge their
innate
moral commitment to ethics.
For
example; who among us cannot think of a boss we once had [have] who said
to
us something like, “I don’t want to hear how you’re NOT going to achieve
what
I asked and the company EXPECTS…. I only want to see RESULTS!”
In
many cases like this and in practice, the decision we are left to make
is,
is our ethical position more important than keeping our job and putting
food
on the table for our family? It’s a tough world out there for those
without
a good job. So suck it up soldier! You’re only doing what you’ve
been
ordered to do! It’s not your decision! Somebody else will have to take
responsibility
for your unethical actions if the doo-doo hits the fan.
….
And we all then fall a little deeper onto the sword of ethics…
…………………………………………
Everyone’s
for corporate and personal liability to include financial
recompense
and/or jail terms especially for those at the top entrusted by us
to
always do what is right. We must be careful tough. To level our sights
only
on CEOs or CFOs is to miss the real perpetrators by aiming too low.
Like
us, CEOs have bosses too. They report the Board of Directors. Granted,
Boards
have shareholders to whom they are ultimately accountable, but in
practice,
the buck stops at the Board level where ethical decisions – bad or
good
– are made.
In
the book, Built to Last: Successful Habits of Visionary Companies, Jim
Collins
and Jerry Porras speak to this issue by highlighting the [Board’s],
“explicit
emphasis on Fair return rather than Maximum return”.
Again,
I must point out, fine words we can all embrace because they
altruistically
revolve around the Golden Rule of fairness. In general,
however,
they are not always practiced. Sadly, we live more today, an
aberration
of author *Ayn Rand’s existential position - there is no room for
altruism
in business.
Understand
a CEO’s ethical dilemma when challenged with a
take-it-or-leave-it
Maximum return challenge. In the end, an executive’s
lifespan
is predicated on one thing: ‘carrying
out’ or being ‘carried out’.
…………………………………………
My
observation should in no way be construed as an endorsement for the
illegalities
engaged in by Enron / WorldCom or others still to be
discovered. The point is, what they are accused of
didn’t just happen
overnight.
Given the right set of circumstances, the right amount of time,
the
right global competitive business climate, the right protection under
the
law, these large companies evolved – learned to become what they are
today.
Does
that make them any less culpable? No! But it should serve more as a
lighthouse
warning that, a) This problem is more far-reaching - insidious -
than
we might once imagined, and, b) It Must be corrected – Quickly!
…………………………………………
On
a positive note, there are and have been many reputable studies done on
the
positive impact of ethics in the workplace for example **Harvard
Business
School Professors John Kotter and James Heskett who studied the
performance
of 207 large firms over an 11-year period.
In their findings
they
wrote:
Corporate
culture can have a significant impact on a firm’s long-term
economic
performance. They found the firms with cultures that emphasized all
the
key managerial constituencies (customers, stockholders, and employees)
and
leadership from managers from all levels outperformed, by a large
margin,
firms that did not. Over an 11-year period, the former increased
revenues
by an average of 682% versus 166% for the latter, expanded their
work
forces by 282% versus 36%, grew their stock prices by 901% versus 74%
and
improved their net incomes by 756% versus 1%.
The
net-net of this demonstrates companies that paid attention equally to
customers;
stockholders and employees outperformed those that didn’t and
over
an 11-year period garnered a net growth income factor of 756%. Ethics
Pays!
…………………………………………
On
the other hand, all the positive studies in the world will do little to
stop
the dismantling of morals and ethics as long as those who engage in
unethical
behavior are allowed to continue. It’s time Governments and
law-enforcement
agencies bring more pressure to bear on those who sit back
comfortably
at a distance [Corporate Boards] creating policies that stretch
the
boundaries of law and fan the flames of ethical undoing.
Stronger
laws and penalties with teeth – financial and criminal – are needed
to
bring needed consequences to already financially comfortable Board
Directors
who, I think we’ll find out quite quickly, will be more willing to
re-embrace
the “Do Unto Others” principle that keep business strong and
elevates
the collective!
· *
Ayn Rand: Author Atlas Shrugged
· ** Jeffery L Seglin: Author The Good
the Bad and Your Business
--------------------------------------------------------------------------------
Paul
Shearstone aka The ‘Pragmatic Persuasionist’ is one of North America’s
foremost
experts on Sales and Persuasion. An International Keynote Speaker,
Author,
Writer, Motivation, Corporate Ethics, / Time & Stress Management
Specialist,
Paul enlightens and challenges audiences as he informs,
motivates
and entertains. To comment on this article or to book the
Pragmatic
Persuasionist for your next successful event we invite to contact
Paul
Shearstone directly @ 416-728-5556 or
www.success150.com
or paul@success150.com .