Sep 21, 2011

"Corporate Culture" Top Priority for Ethics and Compliance Leaders

A recent report (full version here) by LRN, a company that aims at “fostering ethical cultures” within business environments interprets results from a survey given to Ethics and Compliance executives, and raises some interesting issues adequately visible, perhaps, only from a Virtue Ethics perspective.

The report suggests that, at least for those tasked with promoting some sort of ethics within companies and corporate culture, there is a vital concern with the sorts of moral issues and problems that arise inevitably within business.
Ethics and compliance leaders who participated in the survey see themselves as the champions for creating ethical, values-based cultures: 58 percent of them agree that the primary mandate of their efforts is to ensure ethical behaviors and alignment with core values. In contrast, only 42 percent believe their core mandate is legal and regulatory compliance. Further, 68 percent indicate that creating long-term value for the business is a principal benefit of promoting an ethical culture
Three things need to be pointed out.

First, one good thing clearly present here is a recognition that ethics cannot be reduced to mere legal compliance, nor to what conduces to short term gain for companies.  An advance beyond shortsighted and exclusive focus on efficiency or profits, mere enlightened self-interest, or legalism, is an advance — though not much, when it comes down to it.

Second, the language sounds good:  “ethics,” “values-based,” “ethical behaviors,” “alignment with core values,” “ethical culture.”  But, at this level of generality, these terms mean everything — particularly in the minds of those who, when hearing them, feel good about themselves and their projects, feel assured that people will now start doing the right thing, feel that this makes a change — and nothing — because ethics really cannot do without specificity.  Ethics becomes a matter for reflection, debate, action when things are muddy and murky, when temptations and tendencies already exist, in the midst of competing desires, discourses, dispositions, usually already after wrong things (denied as wrong by some) have been done.

I’ll come back to this point more fully below.  Suffice it to say: talking ethics-language is no substitute for having worked out a clear idea of what you mean, tested it in multiple tricky circumstances, and developed the virtues necessary to support and rightly interpret the practical knowledge one has and imparts.

Third, its not really a huge achievement for the Ethics and Compliance people to see these as important concerns, to be “champions” for them.  The real question is where the rest of the company is, and here the picture is less rosy.
the survey findings also suggest that the ability of ethics and compliance leaders to inspire and sustain ethical cultures at their companies may be limited. While most companies recognize that “culture building” is an ongoing journey, these leaders acknowledge that they are experiencing barriers to promoting values-based corporate cultures
Again, no surprise.  Even when framed in terms of efficiency or profitability, changes in corporate culture —as in any culture — are not easy or cheap to make. So, getting the word out — let along having the word take root and bear fruit — about the importance of ethics and ethical behavior in the workplace is going to be difficult, demanding, a gradual process of two steps forward, one step back.

 What were the main barriers or obstacles — the areas of resistance or slippage — in making companies, culture, and employees more ethical?  What appear to the Ethics and Compliance executives — the difference and play between appearance and reality is very important to take stock of here — to be major problems?  And what do they think are relatively minor ones?

“Organizational Complexity” and “Lack of Support by Middle Management” were viewed as the most significant problems.  “Lack of Accountability” and “Inability to Identify which Incentives Enhance Culture” were more middle-grade issues.  At the bottom of the list were “Lack of Clear Statement of Ethical Standards” and “Lack of Clearly Stated Corporate Values”.

So, it seems to be really more a problem — as these things so often are — of implementation, of finding and putting in place the right means for the desired end, rather than a problem with knowing or deliberating about what ought to be done.  That’s simple enough:  Be Ethical!

Granted, most companies have put more thought and work than did Google (with “don’t be evil”) into determining what verbiage to use to express often rather fuzzily conceived moral — they call them “core” — values in mission statements or value statements.  But do these often cobbled-together products of compromise — or even well-written, well thought-out ones produced in collaboration with ethics experts — do these really provide much guidance for ethical decision making in the company?

Typically not, one reason being that while they may invoke and identify virtues — desired character traits — they provide almost no analysis of what those virtues actually are. They don’t delve into what the virtues bear on, what facsimiles are easily mistaken with or manipulatively substituted for them.  They don’t provide the practice in actually determining how to behave along the lines the virtue would suggest in determinate, specific, difficult situations.

It is not enough to have seemingly “clear” statements of ethical standards.  The people who are supposed to implement them — at every level — actually have to have some degree of shared — and correct! — understanding of what those standards are, mean, entail, involve, require. I’d go so far as to say that not seeing this problem of gradually developing deep, rich, and thus usuable understanding of ethical standards — only 4% of those polled saw this as an obstacle — and not just any ethical standards, not just any moral scheme one can come up with, not just any jargon-laden composite code, but standards that can be aligned with actual moral theories, particularly those within the family of Virtue Ethics — not seeing this problem as a real problem is in fact a symptom of a kind of superficial attitude towards and understanding of Ethics.

The bottom line, from a Virtue Ethics perspective, what it has to say to business, is this: Understanding what the principles, the bases, the actual values and goods and their right ordering are is interdependent with implementation and organizational culture.  You have to think not only about how to get people to buy into, accept, and follow the ethical principles you provide them.  You have to make sure they are actually good principles.  You have to make sure people understand what they actually mean.  And, you have to think long and hard about how people actually come not just to comply with them, but to understand, to endorse, to practice them — to make them an integral part of who they are.

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