In my recent post on ethical and responsible leadership, I mentioned the international award for the Outstanding Case Study on Anti-Corruption, given by the United Nations Compact Principles for Responsible Management Education (PRME) and Giving Voice to Values (GVV) and presented at the North American Case Research Association (NACRA) conference: Through the Eyes of a Whistle-Blower: How Sherry Hunt Spoke up about Citibank’s Mortgage Fraud.
The award being granted and the use it will be put to, gives me hope.
I can rant and rave about the DOJ’s questionable need to reward forthcoming whistleblowers, and about the present and past Fannie Mae and Freddie Mac debacles and how they, combined with Wall Street’s fraudulent mortgage activity, almost brought down our entire financial system.
Yet this award, which will lead to classroom study in university settings around the world, is partially what is needed to stop this behavior from occurring in the first place. I say partially, because the public also needs to be more aware and companies need to adopt and instill guiding principles which have zero tolerance and are truly embraced by their employees and culture.
While one would think that ethical behavior is a compass we all have instilled in us, such is not the case. Unfortunately decades of transgressions prove this to be fact.
Greed, ego, and winning at all costs has been so rewarded that those organizations which conduct themselves with a true north perspective rarely make the news. How refreshing and necessary those schools are at teaching what our conscience already knows and sometimes ignores.
Yet isn’t it time that the Whole Foods, Container Stores, Southwest Airlines, Trader Joes, Starbucks, REI, LL Bean, Costco’s and dozens more, including a recent client, Penn Mutual, one of the oldest values-driven companies in America, started receiving more press because they are truly following the guiding principles of ethical behavior?
Rewarding whistleblowing is not the answer. Encouraging, coaching, and strategizing for guiding principles an organizations’ team can take hold of, follow, and embrace is the answer and the eventual solution to a successful, profitable customer-employee centric culture.
Guiding principles are not rocket science. They are about treating people fairly, with respect and dignity. A company’s principles and values are the moral compass which should guide all decisions. A company needs to define those values and clearly communicate to all within the organization what they are.
A colleague, Marianne M. Jennings, JD; a professor at Arizona State University and the author of The Seven Signs of Ethical Collapse puts it this way: “here we are … [many] years out from Enron’s fallout and … from Sarbanes-Oxleys’ mandates on financial reporting and the same business ethical missteps keep cropping up …. Nearly every day another company’s pension woes or some other accounting issue bring more ethical (and sometimes legal) lapses that are inevitably followed by financial bad news. Heck, the lawyers are now being indicted for kickbacks.”
I’ll be talking more often about what ethical leadership is and sharing examples of this behavior as I do believe it is the prevention of lapses, not whistleblowing after the fact, that will truly make a dent in how U.S. companies conduct business. Teaching students ethical business constructs is one huge step in the right direction.
Thank you, Kellogg.