One of Chris MacDonald's ever-thought provoking blog posts ("What's More Important: 'Social Responsibility' or Basic Honesty?") quoted and led me to Peter Foster's recent post ("Trading Honesty for 'Social Responsibility"). Though admittedly not the central idea of Foster's post, the quote that caught my eye was this:
"It is surely also intriguing that the current financial crisis should have come after an explosion in the business ethics industry and the steady rise of the corporate social responsibility movement up the corporate hierarchy. You would be pushed to find any financial institution involved in the current debacle who was not dedicated to the very latest in independently monitored and internationally benchmarked governance practices, complete with high-sounding “codes” and commitments to carbon neutrality and fighting child poverty. And wasn’t the regulatory side of corporate governance meant to have been rendered cast iron by Sarbanes-Oxley? "
Of course there is plenty to ponder in this comment – as well as the rest of the article – but what stuck out to me was the recently-familiar implication that ethics and compliance training programs are simply not an effective piece of the response to the ever-rampant ethics problems to which we seem to see no end.
I think we all know by now that Enron had what could reasonably be called a model ethics code and that Sarbanes-Oxley hasn't miraculously made corporate fraud a thing of the past. Okay. But does that really tell us anything about whether we are expecting too much from ethics programs? I don't think so…
So, are we expecting too much from ethics training programs? Absolutely – if you think that these programs are supposed to somehow keep criminally-minded fraudsters from plying their trade. No ethics training program I know would have kept Bernie Madoff from being Bernie Madoff any more than they would have kept Al Capone from being Al Capone. However:
1. I know of no credible ethics training program that claims to magically convert the criminally-minded into the saintly. (And if you know of one, I'd suggest that their own ethics need some serious adjusting…)
2. A well-conceived and appropriately implemented ethics training program ought to help those wishing to do the right thing to be more easily and persistently able to do so.
3. Such a well-developed ethics training program ought to also help those honest folks more easily recognize and respond to the inappropriate actions of others, thereby reducing the potential impact of wrong-doers, whether or not that wrong-doing was intentional or a matter or either poor training or bad judgment..
4. The how-can-a-company-attending-to-ethics-still-have-Enron-like-problems question doesn't really wash in the fist place. Why? Because research shows repeatedly that the percentage of ethical problems caused by truly criminally-minded folks is barely even a blip on the statistical screen. A number of those folks will always be out there and, true, ethics training or a "high-sounding code" is unlikely to do a lot about them. However, for the overwhelming majority out there who really want to do the right thing, an appropriately conceived and delivered ethics training program can be extremely beneficial. Don't buy it? Look at the research from the Association of Certified Fraud Examiners, the Ethics Resource Center, and others showing – over and over again – that companies with ethics programs sustain dramatically lower fraud loss costs, etc. Quibble if you like that most of the data are correlational but I don't believe that significantly dampens the findings – it still makes the case that attending to ethics is related to improved employee behavior.
So, are we expecting too much from ethics training? Sure, if you want it to do more than it reasonably can. However, I think the far bigger problem is companies who merely give it lip-service or, perhaps, a half-hearted effort at implementation because they see it as either irrelevant or probably ineffective. With that attitude going in, any program's effectiveness will be hobbled right from the start. Once organizations see the the huge ROI of programs that are actually well designed, appropriately targeted, and fully implemented, I think they often come to see that they've actually previously been expecting far too little from ethics training.