In a recent post, Mark Suster commented on about the latest sexcapade involving Les Moonves, CBS Chairman/CEO.

Leaders in all industries need to stand up and say that this kind of behavior will not be tolerated. Future emerging leaders in companies need to know that this kind of behavior will not be tolerated and a spotlight will be shined when it does.

I was going to comment, mentioning what happens when a power is toppled, but LaVonne Reimer (fourth comment) beat me to it.

She cited the story of Mike Cagney, who was fired from online lending company Social Finance last September after an investigation by the board of  over accusations of sexual misconduct and lying.

Powerful men getting fired for harassment and/or sexual misconduct is all too common these days, but that wasn’t Reimer’s or my point.

Our point is the aftermath — or total lack thereof.

Yet just months after Mr. Cagney departed SoFi, two venture capitalists who had been on the company’s board and knew many details of his actions invested $17 million in his new start-up, called Figure. Since then, Mr. Cagney has raised another $41 million from others for the lending start-up, which will open soon.

Suster’s idea that “Leaders in all industries need to stand up and say that this kind of behavior will not be tolerated.” means nothing as long as there are no real consequences.

Obviously, losing their jobs did not equate to losing their power.

And it’s the power that matters, not the job — because there is always another job.

Therefore, no consequences.

Image credit: Hiking Artist

It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.

Golden Oldies are a collection of what I consider some of the best posts during that time.

This post was written in 2009, but could just as well have been written yesterday based on currents events. There’s no question that whether it’s in business, politics, religion, or our personal relationships people in the US and the rest of the world are suffering from a major shortage of ethics.

However, what’s missing and what’s needed to correct the problems depends on your point of view. (And perhaps the image should be updated to read ’22nd Century’.)

Read other Golden Oldies here.

Last Friday I wrote that ‘right’ and wrong’ were moving targets.

With the large number of companies that have been destroyed or severely damaged by behavior ranging from stupid through unethical to downright illegal there is a call for more ethics to be taught at ever level.

Everywhere you turn you hear people saying that we need more ethics, but ‘ethics’ have never been clear cut.
Actually, I think they’ve always been situational, fluid and simultaneously contradictory. Look at the definitions from dictionary.com

1. (used with a singular or plural verb) a system of moral principles: the ethics of a culture.
2. the rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, etc.: medical ethics; Christian ethics.
3. moral principles, as of an individual: His ethics forbade betrayal of a confidence.
4. (usually used with a singular verb ) that branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions.

All of the descriptions use words with no absolute concrete meaning; sticking to my usual example, murder has always been considered wrong, but the definition of murder, even today, keeps changing and often isn’t agreed upon even within the same society, e.g., the pro-choice/anti-abortion war.

Now look at the first four definitions for moral, the usual synonym,

1. of, pertaining to, or concerned with the principles or rules of right conduct or the distinction between right and wrong; ethical: moral attitudes.
2. expressing or conveying truths or counsel as to right conduct, as a speaker or a literary work; moralizing: a moral novel.
3. founded on the fundamental principles of right conduct rather than on legalities, enactment, or custom: moral obligations.
4. capable of conforming to the rules of right conduct: a moral being.

Same thing, there are no absolute terms with which to define it.

Perhaps, then, ethics should be defined by current law, but that certainly hasn’t worked. It’s far too easy to adhere to the letter of the law and totally ignore the spirit of it. That keeps you out of jail, but certainly doesn’t make you ethical.

As a friend said the other day, “An ethical man knows it’s wrong to cheat on his wife; a moral man doesn’t cheat.”

Further, there can be conflicts between personal ethics and law, where adhering to one violates the other. Should law prevail or personal ethics? Whichever you choose, it’s because you agree on a subjective level.

People say that those decisions should be made for “the greater good.” Again, by whose definitions? I’m sure that Hitler believed his actions in “purifying the races” were for the greater good—as he saw it—however I, and a large number of other people, don’t agree.

But even though this example seems so black and white, you’ll find people who still agree with Hitler’s reasoning and work to carry it forward.

In 2007 research from Harvard Business School showed the wide gap between what we think/say and what we actually do.

In that light “more ethics” becomes somewhat problematical.

What do you think the answer to being “more ethical” is?

Image credit: Samuel Mann

Have you ever watched the propaganda film from the 1950’s titled, “Reefer Madness”? 

It was put together by the US Government with the intent to scare the population about the dangers of Marijuana.

Most of what they presented as negative aspects of using the drug were not particularly true, but they were effective.

However, this post isn’t about drugs, it’s about paranoia.

I live in Florida and you may have heard that there is a MASSIVE storm headed our way. Obviously with Harvey in the news people are taking it seriously. However there is a certain amount of panic as well.

Grocery stores are empty of water and canned goods. Gas stations are without fuel and the roads have started clogging up with people exiting the state.

To a certain degree this is rational behavior on the part of the individual, but when taken in aggregate it becomes more of a prisoner’s dilemma.

That may be a charged statement, but as I am watching my fellow man I start to see the cracks in civilized society.

People seem to be in a rush. They cut in line. There is a general “me first” attitude of self preservation.

My perception is that this is a natural state before a storm. Once the storm passes and we are left with the after-effects you see folks band together in harmony.

I’ll keep you posted whether this happens.

Now, what did I do as a rational consumer? I loaded up on water and food, more than what I need. I filled up all my vehicles with gas. And I am preparing to leave.

I have little ones and cannot risk them to chance.

But I did let someone in front of me in the water line out of kindness, a way to balance it all out.

Image credit: NOAA Satellites

According to a post in Forbes by Gregory Unruh, citing one at Motley Fool, many corporations include “ethical waivers” in their corporate Ethical Codes of Conduct, including Goldman Sachs, ExxonMobil, Citigroup, Altria and many others.

Waiver clauses leave the door open for companies to violate their own code of ethics if executives and the board decide it’s a “good” idea. In effect, waivers are a “code of ethics safety valve,” the metaphorical opposite of a blow-out preventer. Why have them? Waivers will just cause problems; a corporate code of ethics is created and designed to limit management decision options to ethical choices. Usually it’s not a problem, but ethics can sometimes impinge on profits. Corporations and their shareholders don’t like to miss out on profits, so the safety valve allows them to sacrifice their ethics if the price pressure is high enough.

Why am I not surprised?

Both authors do an excellent job lambasting the idea that if it pays enough ethics can be waived, so I’m not going to restate the obvious.

Granted, it does take Board approval to use the waiver clause, but that doesn’t seem to be a problem.

Enron’s Board waived the Code of Ethics that prohibited self-dealing by corporate officers and approved off-balance sheet “special purpose entities” and we all know the result of that.

Again, no surprises; not when so many companies put profits, share price and looking good ahead of everything.

What did surprise amaze flabergast, me was that the Goldman Board has issued no waivers.

Confronted about this waiver, a Goldman spokesman responded to blogger ZeroHedge by saying: “The ethics code, including waiver provision, was required under [Sarbanes-Oxley] (Note: It’s not.). No waivers have been requested.”

Isn’t it nice to know that Goldman considers all their actions over the last few years to be ethical.

Wow! I’m not just surprised, I’m speechless.

Flickr image credit: http://www.flickr.com/photos/saeba/3479264260/

Fudge, fib, prevaricate, lie.

“Liar, liar, pants on fire!“

Kids hate liars, but rarely turn in the culprit since that would be snitching, yet that doesn’t stop them from glorying when the liar is caught.

But what about when they grow up?

Fudge, fib, prevaricate, lie.

We’ve seen so much of it the last couple of years, more than in the past—but is that accurate? Or is more just coming to the surface?

In 2007 the Ethics Resource Center found that ethical standards had nose-dived back to where they were in 2000.

According to the 2007 National Business Ethics Survey®

“Over the past year, more than half (56 percent) of employees surveyed had personally observed violations of company ethics standards, policy, or the law. Many saw multiple violations. More than two of five employees (42 percent) who witnessed misconduct did not report it through any company channels…”

According to Dr. Patricia Harned, President of ERC,

“Employees at all levels have not increased their ‘ethical courage’ in recent years. The rate of observed misconduct has crept back above where it was in 2000. And employees’ willingness to report misconduct has not improved, either…”

The good news is that the rate of misconduct is cut by three-fourths at companies with strong ethical cultures, and reporting is doubled at companies with comprehensive ethics programs.”

Got that, “strong ethical culture”—not exactly the type of culture prevalent on Wall Street or in companies whose focus is making the numbers no matter what.

In fact, the only ‘no matter what’ that should be a part of your culture is along the lines of “we will adhere to both the letter and the spirit of the law and make ethical and moral decisions at all times no matter what.”

Image credit: giopuo on flickr

Image credit: Kate_A

Corporate culture is the darling of today’s pundits, toasted and blamed for enhancing, allowing, enabling or contributing to every success and failure when it hits the media—and for good reason.

But is corporate culture also at the bottom of the amazing number of ethical lapses that have come to light over the last decade or so?

In a talk on ethics Bradley Preber, Grant Thornton’s partner-in-charge of its Forensic Accounting and Investigative Services practice commented that “Any company that continues having pervasive and systematic behavior problems with its employees must look at its culture to see if it could be partly what drives that unethical behavior. And if the recurring problem stems from upper management then this will have repercussions for the rest of the company. He added that culture is a factor that can be used to predict fraud and evaluate a company’s ethics.”

Moreover, the ethical breaches that surface shouldn’t come as a surprise.

According to Marianne Jennings, author of The Seven Signs of Ethical Collapse and professor of legal and ethical studies in business at W. P. Carey School of Business, “All unethical organizations are alike; their cultures are identical and their collapses become predictable.” Moreover, there are seven warning signs for which you can watch,

1. “pressure to maintain numbers;
   
2. fear and silence in the ranks and leadership;
   
3. young and inexperienced executives and a bigger-than-life CEO;
   
4. a weak board;
   
5. conflict;
   
6. pressure to produce constant innovation; and
   
7. a penchant for philanthropy that assuages guilt for questionable decisions.”

Just don’t expect this checklist to be posted in neon in your office or offered up on the company wiki.

Plus, there’s an entire gray area that although the actions may not be illegal they are unethical. It’s your responsibility to keep your head out of the sand, your eyes open and to recognize when you’re in that gray zone.

Just as you know that when something is too good to be true it probably is, know that if you’re wondering if something is unethical it probably is.

Do you see any of the seven signs in your company’s culture?