The Ethics Dilemma

In Justice Gomery’s final report, he observed that “only a handful of government officials failed to live up to (ethical) standards in the Sponsorship program”. Most of us in business or government have faced situations where our personal principles have come under attack yet, unlike that handful, we successfully resisted temptation. Further, some of us may have faced personal risk standing up for our convictions, taking responsibility, and holding ourselves accountable for our actions.

But is there a point where we might start to bend or even break as they did?

A 2005 global study of over 1100 managers and executives, commissioned by the American Management Association, (with which Canadian Management Centre is affiliated), identified the top three factors most likely to cause business people to compromise ethical standards. All three impact most of us from time to time, so it would be an unusual person who would not have experienced temptation. The factors, in order, are:

1. Pressure to meet unrealistic business objectives/deadlines
2. Desire to further one’s career
3. Desire to protect one’s livelihood

So here is a theory. Model the dynamics that put pressure on people’s ethics and you have an early warning of possible problems.

Dynamic A is Pressure. Sometimes the pressure to compromise comes at a person externally on vectors such as:

• Urgent timing, “I don’t care what the policy book says, I need your decision now.”
• Entrenched opposition that can be avoided, “HR won’t find out till it is too late”
• Superiors or colleagues, “If you don’t do this, we’ll all pay a price”
• Critical impact, “National unity is at stake here”
• Competitor’s tactics, “Competition gives them money under the table. We have no choice.”

Any single one of these, let alone a combination, can isolate a person on ethical grounds.

Dynamic B is Personal Benefit. Even scrupulous people generally look at choices through a lens of self-interest that includes:

• Financial gain
• Financial risk
• Reputation
• Career and stature
• Power and influence

The greater the personal upside or downside associated with a decision, the more internal pressure will build to compromise on honesty and ethics.

When you buy a house from a vendor with hundreds of thousands of dollars and their personal life plan at stake, who is represented by a commissioned salesperson, you know it is wise to get a home inspection done. Buying a used car? Take it to a mechanic you trust first. Interviewing a job applicant who is currently out-of-work? Check references.

These are commonplace, small town, daily examples of a recognized need for safeguards against unethical behavior by ordinary people when pressure and self-interest intersect. We understand the need to watch out at that level. But when we learn that “a handful” of the participants in multi-million dollar transactions in the colossally critical and legacy-charged national unity debate behaved badly, we have the right to be dismayed but not surprised.

Millions of dollars spent on the Gomery Inquiry has yielded recommendations the country is glad to see. In the clear absence of a sense of personal accountability, the only solution is a body of constraints. But there is a danger now that associated bureaucracy will inflict cumbersome and stultifying rules and procedures on transactions in the matrix’s green low risk boxes. These transactions have neither materiality nor external pressure nor sufficient personal benefit to the buyer or seller to pose much of a risk.