Ethics and Integrity in a Tough Economy

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Having lunch last Monday with my friend Jim Mitchell, Chairman of the Advisory Board of the American College’s Cary M. Maguire Center for Ethics in Financial Services, made me think about the premium we place, or should, on ethics and integrity in a tough economy. While the news is full of fines stemming from the downturn and the continuing economic malaise, it remains a most challenging business environment. The temptation to find an angle seems even greater in these prolonged tough times, and that creates a litmus test for true leaders.

Thinking of business ethics reminds me of the early 1990s at GE when the company policies were retooled from a three ring binder on select leader’s bookshelves to a convenient fourfold pamphlet which all employees received and acknowledged called “The Spirit and the Letter.” I always thought that was a brilliant move because these traditionally dry, often forgotten guidelines were brought front and center and given the ‘plain English’ treatment. While you may not know what the Foreign Corrupt Practices Act is, nor the intricacies of the Anti-Money Laundering rules, “The Spirit” helped you understand the basic concepts and take ownership.

That is the key, personal accountability, which gets so readily lost in these so called ‘grey areas.’ I read recently about “the Golden Rule.” This is the same idea. Do the right thing, do unto others, etc. These notions seem trite or old-fashioned, but are more valuable guidelines now, than ever. This accounting rule does not apply if I spread the transaction across a number of entities – sure, but ultimately the financials consolidate, and the transaction, along with its benefits, disappears. Business leader incentives and the outsized packages that go with them lend appeal to these tactics. Who is minding the store, if not your conscience?

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