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Washington Post - United State
21 November 2005

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Making Ethics Rules Stick

By William Raspberry

Thirty years ago law enforcement came up with the approach documented in the film "Scared Straight" -- using tough-talking prison inmates to frighten juveniles out of their lawless behavior.

Today corporate America is using the same approach to teach ethics. The tough guys this time are corporate executives who've served prison time for accounting fraud, stock manipulation and other such crimes and who now lecture their fellow executives and business students on the dangers of ethical misbehavior. Their message: You're going to get caught and humiliated, and even if you don't you'll have trouble sleeping at night.

Two things seem to be driving Scared Straight II: Public concern that the unethical behavior that has been in the news at least since the Enron scandals must be the result of inadequate ethical training, in colleges and elsewhere, and the recent Sarbanes-Oxley legislation, which puts corporate executives at risk for the unethical behavior of their employees -- unless they can show they provided ethics training.

I won't say such an approach does no good, but it is clear to me that whatever good it does has precious little to do with ethics.

Not that ethics can't be taught. It makes absolute sense for a newspaper, for example, to have regular training sessions to discuss with reporters and editors such things as conflicts of interest, pointing out that not everything that is legal is permissible. Trainers could cite specific examples of unacceptable behavior, noting the negative consequences both to the company and to the offending employee.

Recall the cases earlier this year of columnists Armstrong Williams and Maggie Gallagher. They got in trouble -- he for accepting payment for promoting a government initiative, she for doing non-public contract work on the administration's marriage initiative -- not because they are crooks but because neither understood the peculiar ethics of the newsroom. Both came into newspapering through the side door, and thus were not steeped in the rules that major news organizations make for themselves. Training in newspaper ethics would have helped them both avoid a lot of embarrassment.

But the ethics boom sweeping corporate America proceeds from the assumption that it's possible to teach ethics in general -- and that doing so will reduce the incidence of scandalous corporate behavior.

The assumption misses what Noah Pickus, associate director of the Kenan Institute for Ethics at Duke University, sees as two important aspects of corporate ethics.

The first is that the most worrisome ethical lapses -- think of the miscreants at places like Adelphia, Arthur Andersen, Enron, WorldCom or HealthSouth -- are not the result of insufficient knowledge of the rules. They mostly involve calculated attempts to circumvent the rules.

The second is that corporations tend to enforce, for good or ill, their own ethical standards. "Institutions have ethical cultures," Pickus says. "Individuals are shaped by, and respond to, those cultures. Rules are always important, but more important is how those rules are aligned with what people 'know' about what the institution allows or encourages."

Pickus says he's all for refresher courses, particularly training that connects decision-making to the rules and culture of the place. But absent such a connection, the rules are bulletin-board boilerplate, more for display than for guidance.

"If a corporation is serious about ethical standards, it will show up not just in rules but in performance reviews -- in the entire culture of the place," he says. "I mean, what does it say when the people who have gone to jail for various kinds of fraud were, before their convictions, systematically promoted by their companies?"

So, is Pickus saying corporations are wasting the money they are spending on ethics training -- an estimated $6.1 billion this year just to meet the requirements of Sarbanes-Oxley? "It is fair to say that scaring people into improving their behavior may be one effective tool," he says. "But clearly for the long run, it has nothing to do with the way your company operates. Indeed, it suggests that the whole problem is about bad people rather than about poorly designed structures."

willrasp@washpost.com

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Washington Post - United State21 November 2005

Making Ethics Rules Stick

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Washington Post - United State
21 November 2005