ethics

Featured Ethics Scholar for October: Charles H.Green

Interview with Charles H. Green, founder and CEO of Trusted Advisor Associates

 

What are your main areas of research?

I’m not an academic, so I’ll have to define “research” a little loosely. But for the last 20 years, what I’ve focused on is the role played by trust in business relationships, particularly complex B2B relationships – and particularly in sales and in advisory relationships.

In practice, that has meant pointing out a distinction rarely used in business, even though it’s fairly obvious: the relationship between the trustor and the trustee.  You can’t talk about trust in practical terms without distinguishing between those two very distinct roles (though most general discussions about ’trust’ do just that).  The trustor initiates the relationship by taking a risk; the trustee responds, or not. And then the roles shift for the next go-round. Trust is iterative, dynamic, and creates itself around risk. 

I have also focused on the role of personal relationships rather than institutional relationships, because trust is like politics – as Tip O’Neill said years ago, it’s all local.  Or personal, in the case of trust. Institutional trust, like branding, is a far weaker force. The role of institutions in trust is largely to foster or hinder personal trust.

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ETSY: A Positive Culture of Negative Confessions

What happens when people make a mistake at work? That depends on the culture of the organization- covering it up or passing the buck are options when competition drives behavior or if there is a low trust environment. But at Etsy, employees are not only asked to own up to their errors but reveal them to the entire company.

In a recent piece on Quartz, Etsy CEO Chad Dickerson revealed that people at the company are encouraged to document their mistakes, how they happened and what they learned from it, in public emails. The company “also gives out an annual award—a real three-armed sweater— to whomever who made the most surprising error, not the worst one, as a reminder to examine the gap between how things are expected to happen and how they actually do.”

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Measuring Ethical Culture: Tips and Tools

As any Compliance Officer knows well, demonstrating that your company has an effective compliance program is one of the main goals of your day-to-day efforts, but also one of the most elusive. The Federal Sentencing Guidelines are designed to incentivize businesses to implement ethics and compliance programs by rewarding companies through reduced sanctions- if they can demonstrate that they have an effective compliance program.  The broad goal for most companies is to demonstrate, in the face of an investigation or finding of illegal actions, that the act was caused by a rogue employee and not because of how the company inherently conducts its business.

Yet, we all know that in practice demonstrating effectiveness of a compliance program is rife with gray areas, cynicism and challenges.

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Why Your Hiring Process Keeps Missing Candidates' Character Flaws

In a captivating article for Fast Company ES collaborator David Mayer, of the Ross School of Business at the University of Michigan, outlines “Why Your Hiring Process Keeps Missing Candidates' Character Flaws.”

We at Ethical Systems talk a lot about hiring for ethics and culture, as opposed to hiring for skills and personality, during the interview process. The reason is that the dialogue between employer and potential employee is wrought with miscues, overestimations, hyperbole and a reliance on presenting the best possible version of oneself. In addition, research by ES collaborator Nick Epley, and cited in the Fast Company piece, highlights how we are actually less reliable than we may think when it comes to identifying deceits and spotting potential bad apples.

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By Design: Ethical Systems conference a great success

Ethical Systems, in collaboration with BSPA, held our first conference, Ethics By Design, on June 3. Thanks to the presenters and attendees, it was the behavioral science equivalent of an all-star game attended by the most passionate fans.

Close to 80 leaders from the ethics and compliance space, prominent professors from across the country and influential business leaders and thinkers came together to learn from what one participant called “a massive amount of brain power in the room.” And truly, it was. From those who wrote the seminal texts on business ethics to the people in charge of designing ethics programs at top companies, the attendee mix was evenly distributed among both academics and practitioners in order to stimulate dialog, research and connections.

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Unethical Amnesia: A Term Big Business Cannot Afford to Forget

Time heals all wounds. Time erodes even the mightiest mountain into a pebble. Time also, as a recent study highlighted in Harvard Business Review, enables people to forget their ethical lapses- a fact that has strong implications for businesses today.

Researchers found that “memories of unethical actions become obfuscated over time” coining the term “unethical amnesia.” The reason for this amnesia is simple: recalling our own misconduct is a threat to our positive self-image.

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Risking Reputation Rarely Rewarded: Lessons From The Lending Club

The recent news about Lending Club is a prime example of the reputational value of business ethics.  Last week, The Wall Street Journal reported the company’s twisted fate – it went from receiving a Tribeca “Disruptive Innovation Award” in April (given to then-CEO Renaud LaPlanche) to suffering tumbling stock prices in May, plummeting from approximately $8 on April 1, to a low of $3.94 on the day (May 16th) the WSJ report came out. 

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Twice as Nice: On ethics teaching

Can people be taught to be more ethical? While some may say teaching ethics is a recipe for continued headaches and an ongoing, almost Sisyphus-like journey to ensure lessons are absorbed, a new study has positive implications for both academics and practitioners who have dedicated their work to engaging others in ethics education, training and programs.

The as yet unpublished study, covered by Ben DiPietro in The Wall Street Journal’s “Morning Risk Report” and presented at the recent Academy of Management conference, spotlights a key training tactic that will greatly increase ethics knowledge retention and, in the long term, may possibly reduce misconduct.

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Guarding Ethics: Azish Filabi's Keynote at Food and Enterprise Summit

What does it mean to eat and shop “local”? While there is no prescribed territory that those in- and in charge of regulating- the food industry can point to, many will generally agree that it is best to avoid regulation around the appropriate use of the term.

While there is widespread disinterest in having officials involved, when businesses cannot agree on how to accurately define, and ethically use, increasingly common terms like “local” (as well as “sustainable”, “natural’, and “artisanal”) it opens the door to participation by regulatory bodies.

Many are drawn to the local food movement because of a passion for community involvement and realizing their role in local economic development.  Intending to start, manage or invest in a purpose-driven business, however, is not sufficient without establishing mechanisms to guard the company’s ethics in the long-run.  This theme was at the center of my recent keynote address at the Food & Enterprise Summit in Brooklyn on April 8 (audio now available via the Heritage Radio Network). Our motivation to be ethical can only take us so far- businesses need proper corporate governance, accountability mechanisms, and strong community ties to help guard their ethics as the company grows.

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Combating a Culture of Minimalism with Preet Bharara

What does it mean to have an organizational culture of minimalism? On the surface, it results in doing only the bare minimum to avoid punishment from internal or external groups. The more insidious implications means that both shareholders and stakeholders end up disillusioned and disconnected after prolonged exposure to the ennui and modicum of expended energy in actually making positive change.

In a recent talk by U.S. Attorney Preet Bharara as part of NYU Stern Business and Society Program’s Sani Lecture Series, he identified cultures of minimalism as a trending, troubling development in today’s business world. And this is, without doubt, extremely vexing for business leaders, investors, academics and advocates.

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