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Ethical irony

18 July 2016

Ethical irony - read more

Is it possible to be ethical and unethical at the same time? asks Anthony Hilton

Given how much management time is devoted to concepts like performance, trust, engagement, sustainability and culture, it is interesting how little time is spent defining what is meant by those terms. Performance, for example, is not an absolute; it is only meaningful when measured. It therefore depends entirely on the benchmarks or targets against which it is compared. It is not understood widely enough that out-performance against carelessly chosen targets can be disastrous for a business.

Trust is equally vague; there is intellectual trust that is informational when, for example, the recipient believes the data to be accurate. But that same person might not believe or trust the overall picture that data presents because it is selective, out-of-date or derived in circumstances that no longer exist.

Alternatively, trust can be thought of as having an intellectual and emotional content, which pull in different directions. Intellectually you can trust a financial institution not to run off with your savings, while emotionally not trust it to give you a fair deal.

These thoughts came to mind during a seminar organised by Leeds University academics, who are in the early stages of researching the ethical dimension of management – what do we mean by ethics; what role does it play; how does it manifest itself, and so on.

People in business frequently talk about ethics – indeed, there is an Institute of Business Ethics, which is enjoying something of a revival and producing excellent work under its current leader, Philippa Foster Back. Although it might be hard to find anyone who would say publicly that ethics has no place in business, it remains the case that people will bandy the word around while being unsure where ethics fits in to the governance framework.

The Leeds team are philosophers rather than economists so they come at the topic from a completely different direction – or one hopes that they will do eventually. Their current position is perhaps better described as orbiting around an alien planet, but it is early days. They are still discovering and devising the co-ordinates, which will take them on a route to planet earth.

Thus far, they have been better at identifying aspects of leadership than linking it to ethics. Plato’s Republic apparently has extensive sections on leadership and sets out six, later expanded to eight, main models.

First comes the doctor who diagnoses and does what is good for you. Second is the navigator whose skill is in steering the ship. Third is the artist who has a vision that people buy into. Fourth comes the shepherd who keeps everyone together and moving, however slowly, in the desired direction.

Fifth is the teacher who gives the team the skills to do the job themselves and sixth is the animal watcher who, in essence, lets events take their course but works to make sure that no one gets eaten by a lion in the meantime.

Then there is the final pair added later of the weaver who threads together all manner of different strands and the sower who casts out ideas in the hope that they will take root.

These models may be useful in helping one think about different management styles in the modern day, though it seems unlikely that anyone could get by with just one of them for long. Successful executives need many of these skills. All of them may come in useful at different times when facing different challenges.

But what, if anything, do any of these leadership models have to do with ethics? People in management could adopt or apply any or all of these personas, but whether they behave ethically – however defined – in that persona is another matter.

What are ethics anyway and how do you define ethical behaviour? Individuals can think in terms of doing the right thing and/or behaving with integrity, but those are personal value judgments, which do not deliver a universal ethical standard. And what about the wider society? Ethical behaviour would imply responsible and fair dealing with those whom the business comes into contact – as in, do unto others as you would be done to.

That is not enough in itself however, because it also implies responsible behaviour towards people you have never met. And, how do we square the fact that we behave differently at work than at home?

It cannot be ethical to dump toxic waste in some remote corner of Africa because that is cheaper than disposing of it properly. Yet if management’s duty is to shareholders, can it be considered ethical to create the best possible returns for them by putting the squeeze on suppliers, employees or customers and making extreme use of tax havens?

Is it possible to be ethical and unethical at the same time? It is commonplace to hear of middle-ranking executives who quietly break company rules that would otherwise block them from doing what they consider to be the right thing.

This might be just be diverting a bit of money into a local sponsorship, but in one case it involved turning a whole company’s procurement policy ‘green’ with all the attendant costs, but without the knowledge of the chief executive.

The final irony is that even if one shoulders all the problems of being ethical, it does not mean you keep your job. Ask Anthony Jenkins, the ‘old fashioned’ banker, who was put in place to change the behaviours at Barclays after the abrupt departure of Bob Diamond. He was ousted in three years.

Anthony Hilton is Financial Editor of the London Evening Standard

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