Entries by Jeremy Willinger

Our Book Discussion With Jack Ewing and NYU’s Center For Sustainable Business

On May 23, the NYU Stern Center for Sustainable Business and Ethical Systems welcomed Jack Ewing, European Economics Correspondent for The New York Times, for a discussion of his new book “Faster, Higher, Farther: The Volkswagen Scandal“.

Ethical Systems CEO Azish Filabi introduced Jack Ewing and discussed the ways in which this event exemplifies the mission of each center: “This event is a great opportunity for our two organizations to partner given the overlap between ethical failures and environmental impact at VW.  That VW’s actions breached the trust of its customers, employees, and the government is an understatement. The emissions fraud represents not only disregard for good business practices, but also the necessity of businesses to be at the forefront of meeting global environmental challenges. It is precisely the type of management decisions we are educating Stern students NOT to make.”

Ewing, who has spent more than 20 years covering German business and economics, opened his presentation with a brief history of Volkswagen, which emerged in the late 1940s as the icon of post-war German regeneration. He detailed Volkswagen’s fraudulent emissions testing and took the audience behind the scenes to expose how this deception happened, who discovered it and how the company tried to cover up its misdeeds.

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A Long Term Fix for Our Short Term Focus on Corporate Culture and Profits

In a society and culture that emphasizes the new and the now what does it mean to manage for the long term? If we want what we want when we want it, businesses that take a multi-year perspective may be misaligned with modern expectations by shareholders to maximize profits, almost immediately.

Today’s businesses have morphed into revenue generators designed to squeeze every ounce of productivity and profit from its people and operations. Many corporate leaders see their role as the facilitator of shareholder enrichment. Coupled with a culture of instant gratification, it is not that shocking to see the reinforcement from the field as to what it means to be a successful enterprise.

However, a new article in Harvard Business Review by authors Joseph Bower and Lynn Paine of Harvard Business School argues that the entire basis for the popularity of shareholder primacy is deeply flawed and that its growing reliance excludes real opportunities for sustained growth and imperils the broader economy.

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Building Cultures of Trust at Laureate Education

Ethical Systems seeks to highlight companies with a strong commitment to ethical, speak up cultures and trust. One of these companies is Laureate Education, Inc., who created a series of internal videos for their 70,000 employees about trust, blame and ethics. We present them below with an introduction by Laureate’s Chief Ethics & Compliance Officer, Mark Snyderman.

Laureate Education, Inc. is the largest global network of degree-granting higher education institutions, with more than one million students enrolled across 70 institutions in 25 countries at campuses and online. Laureate offers high-quality, undergraduate, graduate and specialized degree programs in a wide range of academic disciplines that provide attractive employment prospects. Laureate believes that when our students succeed, countries prosper and societies benefit. This belief is expressed through the company’s philosophy of being ‘Here for Good’ and is represented by its status as a Certified B Corporation™ and conversion in 2015 to a U.S. public benefit corporation, a new class of corporation committed to creating a positive impact on society.

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Our new ‘Ask an Ethics Expert’ Feature

Expanding on our mission to curate and distil ethics research for the business community, Ethical Systems is proud to launch a new initiative soliciting questions to submit to one of our esteemed collaborators. 

Our “Ask an Ethics Expert” project allows you to learn more about business ethics, culture, decision making and more. Submit your questions online and see your answers in our May newsletter and on our Ask an Ethics Expert page online.

 

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Sharing: The Five Levels of Building an Ethical Culture

We are republishing this piece by Alison Taylor, via Richard Bistrong, exploring the five levels at which companies should build an ethical culture.  This guest post is by Alison Taylor, Director, BSR,  and first appeared on BSR here.  How to build and sustain an organization whose employees are happy, motivated, and ethical remains one of the most […]

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Bank Culture: Can regulators have an impact?

A March 14 New York Times Dealbook article by David Zaring of the Wharton School looks at bank culture from a regulatory perspective and questions why NY FED regulators are taking on the grand task of attempting to make culture and ethics an important part of bank supervision- especially when “creating and regulating culture by regulatory fiat is so difficult.”

 

Ethical Systems has made fortifying ethical corporate culture a main concentration of our efforts, as there is no better determinant to predicting misconduct. An ethical systems approach to business ethics considers the interplay between corporate culture with considerations for how to motivate individual to be more ethical (nudging),and the regulatory (guiding policies that impact behavior and outcomes).

 

When examining company culture, leaders should consider whether it is one in which company values are infused into all aspects of the operation, where managers lead by example and teams are encouraged to speak up about ethics and other issues? Or, if it is a culture in which checking the compliance boxes off a list is seen as most important and certain behavior is tolerated by high-performers but not allowed for others?

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Varying Tasks to Increase Compliance

A new study illustrates how providing variety in job-related tasks for workers contributes to rule adherence and stymies unethical decision making.

The paper “Reducing Organizational Rule Breaking Through Task Variety: How Task Design Supports Deliberative Thinking,” is authored by Rellie Derfler-Rozin, ES collaborator Celia Moore and Bradley R. Staats and published in Organization Science.  The authors discuss the positive implications of this research for designing roles and responsibilities in various organizational settings, and the beneficial outcomes for both workers and businesses.

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Ethical Decision Making: Easy in Training, Harder in Reality

Over the course of a workday, people make innumerable decisions ranging in degrees of severity, from critical to mundane. Often times, choices are made in a vacuum and are considered for only as long as it takes until the next intellectual dilemma or distraction demands our attention. A recent piece by Eugene Soltes in Harvard Business Review explores the difficulty around  ethical decision-making, while also exploring the gap between attempts to train or educate people on organizational ethics and the real-world pressures people face when face with an ethical dilemma (or even recognizing that they may be in an ethical quandary).

Soltes, an Associate Professor of Business Administration at Harvard Business School, points to a variety of executive misdoings by ostensibly smart and talented— not to mention prominent— leaders that illustrate that even those under scrutiny and fully aware of their responsibility for shareholder funds can act in self-serving ways that, in retrospect, they realize are obviously unethical. And, as Soltes writes, in hindsight the fact that these were adverse decisions are not lost on  these individuals, but in the moment they failed to consider the impact or consequences.

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Interview with Rashmi Airan: Law, Blindspots, Prison and Redemption

An interview with Rashmi Airan, speaker on ethics, law and culture; leadership and compliance consultant; and growth strategist

 

Background:

Rashmi was a successful lawyer who graduated with honors from Columbia Law School. After working for several major corporations, she launched an independent law practice in Miami, Florida. During the housing boom, she was recruited to work with a local real-estate developer who later engaged in shady business practices. Her involvement resulted in a one year sentence in Federal prison, alongside a $19M judgment against future earnings, required community service hours and 3 years supervised release.  As a mother of two and devoted community activist, Rashmi has reconfigured her subsequent career to focus on growth strategies and leadership/compliance training for firms, corporations, and graduate schools.  She has also become widely known as a public speaker, sharing her story to help illustrate the ethical perils and situations that can result from a drive to succeed and the blindspots created when pursuing a goal.

This interview has been edited and condensed from a conversation on January 19, 2017.

 

1) What are the main takeaways from your story that you want others to know?

I believe there are many reasons why I am telling my story. I want to help people so that they do not find themselves in the same predicament that I was in and make different choices when faced with daily “gray” decisions.  I finally came to a place of peace that I had done something wrong when I gave myself the freedom to forgive.  After I forgave myself, my lessons became clearer. I reflected on different business relationships and the fact that I had not looked into things deeply enough.  I know there are lessons for both young and seasoned professionals. I believe I can enlighten people to the fact that there is a fine line and we must all walk between the two sides of right and wrong and choose to be on the right side of the line.

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Behavioral Ethics: From nudges to norms

Scott Killingsworth, Senior Counsel with Bryan Cave, LLP, writes a broadly applicable and thought-provoking piece on nudges vs. culture. Killingsworth illustrates how a strong ethical culture can take the place of consistent, ongoing nudges and shows that culture should be considered through the lens of not just preventing ethical mishaps, but also about creating a positive environment “where the good apples can thrive”. 

We encourage you to read this informative article >>

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