In many organizations, setting the right tone at the top begins by hiring executives and other leaders who have strong personal ethics. Ethics is a key characteristic that’s increasingly being factored into hiring decisions, as legislation tightens and companies are forced to improve their ethics. Employees and executives need to be on the same page about what is considered right and wrong behaviour.
A competitive-intelligence consultancy, Fuld & Co., released the findings of a recent survey they did that asked 104 business executives to respond to a variety of scenarios. Respondents were presented with a scenario, and then asked to rank it as illegal, unethical, aggressive or normal. The scenarios were predominately based on situations where an executive was in a position to collect information about their competitors.
Right and wrong
For many, the results from the survey aren’t overly surprising. The survey found that companies in the financial and tech sectors were the ones most likely to push the boundaries and cross the ethical line. In other words, a situation viewed as illegal or unethical by someone in another industry, was likely to be considered normal behaviour by someone in the tech or financial sector.
Joe Light of the Wall Street Journal wrote and article about the survey findings, which also featured quotes from Fuld & Co. President, Leonard Fuld. In the article “Finance and Tech Signal Bold Attitudes on Ethics,” Light writes:
“Some companies might face closer regulatory scrutiny or have clearly defined guidelines that make employees more hesitant about some methods of intelligence collection, Mr. Fuld said. Technology and financial-company executives tend to be risk-takers in other areas of business, too, which might make them more susceptible to toeing ethical boundaries, said Larry Kahaner, author of ‘Competitive Intelligence.’
Health-care and pharmaceutical companies, on the other hand, are subject to high regulatory scrutiny and are also more sensitive to public perception, he said. ‘What I’ve found is that the more money that’s involved, the less squeamish people become,’ said Mr. Kahaner. ‘If companies have gotten away with stuff over the years, they don’t clean up their act.’”
Walk the walk
We hear it all the time: ethics requires action to back up words. Leonard Fuld wrote an article, “How Competitive Intelligence Rules Encourage Cheating,” which was published in the Harvard Business Review in December. In the article, Fuld discusses some of the findings of the survey and the alarms they should trigger:
“One eye-opening finding: Despite the fact that most large companies issue explicit competitive information-gathering guidelines, many employees aren’t well informed about them. For example, only 40% of Europeans surveyed said that they had received any training on these guidelines, compared to 68% of their U.S. counterparts.
The bottom line: Companies may fulfill some vague responsibility of corporate citizenship by issuing such policies — they have checked one item off their good-governance list — but fail to actually stem bad behavior. Bad behavior can range from breaking with an industry norm for collecting information, such as eavesdropping, to much more egregious acts such as stealing a document or misappropriating an email filled with highly confidential information.”
Writing an ethics and compliance policy is a step in the right direction, but it’s useless if a company doesn’t do anything with it. As soon as an employee notices that others are getting away with unethical acts, their actions and decisions will be influenced because they won’t have any reason to take the consequences seriously. The US Federal Sentencing Guidelines and other laws around the world call on companies to have an effective compliance system in place. An effective program requires a lot more than checking items off a list in order to look good.