Leaders, Check Your Ethics at The Door?

A client recently asked me to explain the difference between Business Ethics and Non-Business Ethics.

“There is no difference,” I replied. “Either we choose to live according to a standard of ethics or we don’t.  We cannot select a different set of values to live by at work than at home.”

Perhaps a better question to ask is this:

Why don’t businesses have a code of ethics that mirrors the values their employees live by as individuals?

There are many who claim that the sole focus of business is to make a profit. They have created a misconception in the minds of some that to facilitate making a profit, business is exempt from the ethics that individuals are expected to uphold. The essential flaw with this ethical exemption theory is that it overlooks the fact that businesses are run by people.  Some people, when given the chance to act in an unethical way where their actions will have no consequences, will give in to greed and corruption.

Examples of what can happen when businesses adopt this relaxed ethical mentality can be seen in the series of scandals beginning with those at the helm of Enron.

Tumbling Dice

The result of the Enron executives’ greed and corruption was the destruction of a company’s reputation and a $63 billion bankruptcy filing. An example that followed Enron was the WorldCom scandal where leaders engaged in corporate securities fraud and accounting violations resulting in a $103 billion bankruptcy filing.

Some other examples of “relaxed ethics” spiraling out of control include Arthur Andersen consultants agreeing to hundreds of transactions for several major companies that “coincidentally” all shared the exact same figures of $1.7 billion and $400 million when reporting incomes, losses, and executive compensation payments.

More recently, we discovered that the officers of government controlled Fannie Mae pocketed millions in salary as they shifted losses and deferred expenses in order to justify the bonuses they paid themselves. The list goes on to include insider trading, executives embezzling from their companies and, of course the Bernie Madoff scheme that ruined the lives of many unsuspecting investors.

Where is the leadership here? Sleeping off a greed-binged ethical hangover somewhere in the gutter on Slush Avenue?

Lessons Learned?…Perhaps Not

What can we learn from these events? Without a set of ethics to guide leaders, power and money can easily lead to corruption. When ethics are “checked at the office door,” the capacity of human greed and selfishness appears to be without limits.

Although the reputations of these companies were destroyed as their unethical business practices were revealed, the reputation of a bankrupt company is a small price to pay for a CEO who has personally amassed  hundreds of millions in cash and other assets.

The irony of it all is while many thousands of lives have been adversely affected by the actions of corrupt executives, the penalties for white collar crimes pale in comparison to those we impose on car thieves or bank robbers where the number of “victims” is comparatively small.

These businesses may have set out with good intentions but they are all prime examples of what happens when we compromise our values over time or dispense with them altogether in the name of the business.

In many companies, we find that conscience has been replaced by greed.  If we intend to or not, we condone this behavior when we invest in companies whose sole objective is to turn greater and greater profits every quarter.

We need to learn from our mistakes pf pure self-interest. or we are destined to repeat them.

We have listened to the reasons why work needs to be strictly business, nothing personal. However, perhaps it is time we all ask ourselves again “Why shouldn’t businesses (their leaders and leadership) have an established code of ethics that mirrors the values we live by as individuals?”

Maybe it’s time for us to rethink the answers we’ve been given.

Markets are Reactive, People are Proactive

We’re often told that market conditions or business cycles caused our current economic crisis.  These statements are flawed and illustrate the common confusion many have between cause and effect.  Market conditions are simply reactions to what people think and do – they don’t create themselves.

The market conditions that resulted from all of the previous examples are a reflection of the unrestrained greed and unethical practices indulged by those involved, including executives, bankers, accountants, wall street traders, and government overseers who are tasked to regulate them.

The market conditions are also a reflection of the “Frankenstein Monster” that can be created by the belief that the sole purpose of a business is to make a profit for its shareholders.

By allowing themselves to adopt  a different set of ethics for business, these “leaders” have led their companies into some of the worst economic and ecological disasters (i.e. BP Oil) the world has ever seen.

How were these business leaders able to do what they did for so long?  As leaders, how can we prevent these types of things from happening in our own companies? Do you ever feel that you are expected to “check your personal ethics at the door” and behave differently at work? Can’t business leaders make a profit and still be honorable, ethical people? How can leaders avoid the temptations of greed and corruption while maintaining the setting on their “moral compass?”  Would your spouse and children be proud of the leader you are in the workplace?

Bookmark Leaders, Check Your Ethics at The Door?

——————–
Jacqueline Ayad is Business Consultant at Aeon Alliance Business Consulting
She helps clients with management consulting
Email | LinkedIn

Image Sources:  images-amazon.com, lctmag.com, thehouseofwindows.com, i.ehow.com, wisopinion.com

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Leadership Standards: Industry and Politics

Super-rich corporate CEO’s can hide behind slick ads and slogans, but it’s wrong for a political candidate to try and do the same.

These words present an interesting view of American Leadership today. And it points to a distinction drawn according to the arena in which a leader is playing.

The line above arrived in my in-box from Steve Glazer, the Campaign Manager for Jerry Brown, who is running for Governor here in California. I found the words disturbing (as intended), but perhaps in more ways than the author expected. The idea continued to nag and to haunt me throughout the day, and I was eventually forced by some nagging notion to give it some more consideration.

But let us switch gears for a moment…

The Foundation of Leadership

Most of the world’s people ascribe to one religion or another. And whether we are a follower of the teachings of the main ideas of Christ, Buddha, or Mohamed, all teachings of the major religions share a common thread.  Many of our beliefs about right and wrong arose directly from these teachings, and have endured through the centuries because most people believe they hold some significant and meaningful value that benefits people and the societies in which they live. For many, these ancient teachings still serve as the guidebooks to daily life and living.

Although said in slightly different words, the common thread within all three teachings can be summed up as the Golden Rule:

Wikipedia describes The Golden Rule as “an ethical code that states one has a right to just treatment, and a responsibility to ensure justice for others. It is also called the ethic of reciprocity. A key element of the golden rule is that a person attempting to live by this rule treats all people, not just members of his or her in-group, with consideration.”

Please Vote!

The Root of the Meltdown

When I first moved from journalism into sales, I approached the subject of selling much like any other subject.  I took courses, read books, and attended a variety of seminars and trainings. My  personal favorites included the teachings of Dale Carnegie, author of  How to Win Friends and Influence PeopleOg Mandino, author of  The Greatest Salesman in the World;  and Napoleon Hill, author of  Think and Grow Rich.

Unlike today, where we primarily refer to spreadsheets, charts, and graphs to decide our annual sales strategies, we previously relied more on a relatively simple philosophy of how best to do business. This is the basic tenets involved in how we see and treat others as we traveled the path to success.

In a much more recent lecture on Enlightened Leadership given at MIT, the Dalai Lama rejected the notion that the economic meltdown (from which we are still attempting to recover) was caused by market forces and instead names the causes as human behaviors—(describing both as ) greed, pride, and hypocrisy.

I doubt he was referring to any specific person in this address, but rather to those at the helms of large businesses and institutions.

A Question We Must Ask

Rethinking the distinction between the Leaders of Industry and those wishing to lead in political arenas, we must ask the question:

When did the transaction of business become exempt from The Golden Rule, and when the exemption become acceptable in the minds of John Q Public?

Why is it that Corporate CEOs  can hide from responsibility? And why should their actions be considered any less “wrong” than our  politicians’, particularly considering the power and influence corporations wield in America (and American politics) today?

Why has it become acceptable that corporations (their leaders) and businesses, in general, are allowed to work under a different set of values, ethics, and principles than politicians (or everyday people) with little or no consequences?

Should the values of a society be reflected in all aspects of that society or have corporations become our new, and unquestioned, sacred cows?

Big Business has become too big to fail, we’re told.  If this is true, does it not seem logical that we should take a closer look at who is at the helm and examine the type of leadership principles they demonstrate?  Should they be any less accountable than anyone else, or does the label “Business” justify all sorts of “selfish and greedy” behavior that we would find unacceptable in any other individual?

The Corporate Takeover

The email I received was intended as a call for actionMeg Whitman, of eBay fame, rejected Jerry Brown’s invitation to a bi-partisan debate before the primary. According to news reports, she has spent over $59  million dollars of her own money in a barrage of television ads that seem to either promote herself or disparage her opponents. In her newest television ad, titled “Doing,” Meg says government needs to be run “a little bit more like a business.”

Now, I have no particular preference for either Brown or Whitman. Regardless, in light of our recent economic meltdown, and until we arrive at a consensus of what leadership is or does, I find the prospect of our government run more like a business more than a little frightening.

Who is left to bail out the government if it is run by the same people we entrusted to lead our largest institutions? How many failed business leaders are at the helms of our nation today, and how is it working out? And of course by “failure”, I mean in a particular sense: Public trust and personal responsibility.

According to the Dalai Lama we need to ”not think in terms of “we and them .

All of humanity needs to come forward to solve the world’s problems.

Does it really serve our interests (or those of the whole of humanity) to have a different set of expectations, ethics, or guiding principles for Corporate CEO’s and the “Captains of Industry”, than those we have established for our elected officials?

Bookmark Leadership Standards: Industry and Politics

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Jacqueline Ayad is Business Consultant at Aeon Alliance Business Consulting
She helps clients with management consulting
Email | LinkedIn

Edited by Mike Weppler

Image Sources: boxturtlebulletin.com

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