An extremely interesting post on the Conflict of Interest Blog caught my eye this morning and I appreciate Jeff Kaplan for posting it. In that post, a case is described in which Goldman Sachs is reported to have defended some of their inappropriate activities, in part, by claiming that their promises of ethical behavior were merely "puffey" and not actually intended to be a promise of ethical behavior. Therefore, as the logic goes, they shouldn't be held legally liable for breaching their promise of ethical behavior. Besides perhaps setting a new low water mark for indefensible defenses, it also got me thinking about the hollowness of so many promises of ethics from a wide range of organizations.
For example, how many companies have an ethics code which, among other things, prominently states that ethical behavior will be expected. In essence, the ethics code simply promises ethical behavior. Besides the awkward circularity of that logic, how can you possibly assure – or, really, even adequately support – ethical behavior if you don't provide specific guidance regarding what that ethical behavior actually involves. Without such guidance, might not your organization's claims and promises of ethical behavior be just as likely to be viewed a "puffery" as were Goldman Sachs'? After all, an empty promise is largely what puffery is all about, yes?
The court has now held that false promises of ethicality are not a legal shelter and I suspect we can all agree that any type of false promise is a defacto ethical violation as well. So, is your organization prepared to show that its ethics code represents a genuine, concerted, persistent, effective effort to develop and maintain a culture of ethics? Remember, you need to be able to demonstrate all four of those qualities and the need to be able to do so has always been an ethical mandate. Now, however, it appears as if it might be a legal mandate as well.