It is always a privilege to be invited to speak at a University to accounting and business students and their faculty. This last week I had that honor- of presenting to Brigham Young University’s Marriott School of Management and Wheatley Institution, to these groups on ethics and how important integrity is in the business world. Unlike most other universities, BYU is somewhat distinct in that they teach ethics courses in all disciplines.
Ethics and integrity in leadership is highly respected by the University and sets the foundation for all their work. Three years ago, the University started inviting a nationally known whistleblower to speak with their students about real-life stories revolving around ethics and ethical behavior. I followed Sherron Watkins of Enron and Cynthia Cooper of WorldCom.
I was invited to speak by Mark Zimbelman, the Mary and Ellis Professor of Accounting, whose teaching and research interests are in auditing and the prevention and detection of fraud, and Brad Agle, a Fellow at the Wheatley Institution and the George W. Romney endowed professor at the Romney Institute of Public Management.
They specifically wanted to hear about my challenges at Citigroup and understand the relationship to breakdowns of ethics and the lessons to be learned from this. I started off the lecture, immediately after the playing of the 60 Minutes clip I am featured on, with the disturbing fact that a large part of the financial crisis could have been prevented if the large banks had merely followed their own written ethics policies and listened to their employees. All companies can learn from this.
Unfortunately, greed often trumps ethics at the highest rank of an organization, as we so clearly saw in company after company in the last ten plus years. Witness former Enron CEO Kenneth Lay, in his first primetime interview after pleading not guilty to criminal counts on CNN’s Larry King Live, who actually said, “I lived my life in a certain way to make sure that I would never violate any law – certainly any criminal laws – and always maintained that most important to me was my character, were my values.”
Amazing! As I talked about, today we do not always witness the highest integrity at the top of a firm; as many situations are a do as I say, not as I do, and too often greed trumps ethics. I reminded the students that if they saw something that made them uncomfortable, that they knew wasn’t right, they needed to speak up. Sometimes the consequences would not be pleasant, one could lose one’s job, as I did.
And I told them about Helen Sharkey and her experience. My message reinforced hers. Newly hired by Dynegy, an up-and-coming energy trading company in Houston, Ms. Sharkey saw what she perceived as wrongdoing, and did not speak up as a result of her newness to the role she was in. Because of her failure to speak up and her junior level position she was targeted by prosecutors and became complicit in securities fraud and Ms. Sharkey spent twenty-eight days in a maximum security prison, just two months after giving birth to twin boys. Her bosses got off scot-free.
I warned the audience that yes speaking up has a price. It could be the loss of a job and being blackballed in your profession; yet not speaking up has penalties as well – as Ms. Sharkey’s experience could speak to. And if they didn’t speak up and still saw wrongdoing, then it was time to polish up their resume and leave the company for one with higher ethical values.
Ironic what Former Tyco International CEO Dennis Kozlowski said at a commencement speech at Saint Anselm College, “You will be confronted with questions every day that test your morals . . . Think carefully and, for your sake, do the right thing, not the easy thing,” (He was indicted for tax evasion 17 days later.)
At Citigroup, we had an “ethics czar.” Citigroup supposedly had implemented a stringent code of ethics, we all received annual ethics training, and still, our code of ethics was just lip service. Everyone knew that that wasn’t how things really worked, so why bother following the code?
At Brigham Young University they want to assure their students aren’t paying lip service to a code and are instead actually living the code. The University teaches ethics as a foundation for ethical living in every area of one’s life. The Wheatley Institution at Brigham Young University, named for Jack and Mary Lois Wheatley, enhances the reputation and scholarship of BYU by seeking creative and powerful ideas which lead toward practical and constructive solutions to real societal issues. The Institution broadly disseminates those motivating ideas and policy recommendations to the wider world, and is guided in all its work by enduring, bedrock values.
How about in your organization? Is it a do as I say, not as I do organization? How accountable are your managers and the C-Suite? I expressed my concerns about the downward ethics spiral and direction we seem to be headed in, in our country.
These students got it. Studies show integrity is the most important character strength for the performance of top-level executives. Someday many of these students are going to be in the C-Suite. As student Daniel Gorham said, “Many thoughts were racing through my mind as you were speaking, and you helped us feel the anxiety and stress that must’ve been felt during that hardship. I think it helped us all to establish a stronger set of morals so when those situations arise, we won’t be caught off guard and will remember to act with integrity.”