Tag Archives: ethics

Ethics are important?

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Every class, seminar, training session, etc. I've attended that's had the subject of ethics has seen an almost instant mental "check out" of all the attendees.  It seems to be one of those subjects that everyone acknowledges as important but also as unnecessary to discuss.  You're either ethical or you're not, what's there to discuss?

Well, when you see stories like this you realize there's a whole LOT to discuss:

According to the Post, the groundwork has been laid "for scientific advances that would allow drones to search for a human target and then make an identification based on facial-recognition or other software. Once a match was made, a drone could launch a missile to kill the target."

Of course, at some point a human would have to decide what information the drones would be given — presumably, for instance, the data to be used to identify the individuals it might target.

But as the Post adds, "the prospect of machines able to perceive, reason and act in unscripted environments presents a challenge to the current understanding of international humanitarian law."

Here's a link to the Washington Post story that is referenced in the quote.

Investor Ethics

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Seth Godin argues that businesses can't be ethical, but people can:

It comes down to this: only people can have ethics. Ethics, as in, doing the right thing for the community even though it might not benefit you or your company financially. Pointing to the numbers (or to the boss) is an easy refuge for someone who would like to duck the issue, but the fork in the road is really clear. You either do work you are proud of, or you work to make the maximum amount of money. (It would be nice if those overlapped every time, but they rarely do).

"I just work here" is the worst sort of ethical excuse. I'd rather work with a company filled with ethical people than try to find a company that's ethical. In fact, companies we think of as ethical got that way because ethical people made it so.

I worry that we absolve ourselves of responsibility when we talk about business ethics and corporate social responsibility. Corporations are collections of people, and we ought to insist that those people (that would be us) do the right thing. Business is too powerful for us to leave our humanity at the door of the office. It's not business, it's personal.

Godin makes a great, if uncomfortable, point. No business can be ethical in and of itself, but it can be a reflection of the ethical decisions of the people who run it.  Earlier in his post Godin wrote this:

The unhappy theory of business ethics is this: you have a fiduciary responsibility to maximize profit. Period. To do anything other than that is to cheat your investors. And in a competitive world, you don't have much wiggle room here.

If you would like to believe in business ethics, the unhappy theory is a huge problem.

So the problem appears to be that since a business manager's fiduciary duty is to maximize the profit of the shareholders then it's almost impossible to do the right/ethical thing if it's not in the best interest of the shareholders.  It's an argument we've heard often throughout the recent past in our country and here's my problem with it: it absolves investors from having their own ethics.

There is nothing that I know of that stops investors from saying to the company's managers that keeping its employees on the payroll is a higher priority than returning a 10% profit.  Investors can also tell the company's managers that preserving the environment is a higher priority than higher profits, that avoiding taxes by playing offshore games will not be tolerated, etc.  Sure, at some point you might have to make some hard decisions in order to help the most people – as Godin writes The local store gets very little long-term profit for its good behavior if it goes out of business before the long-term arrives – but investors can at least let it be known that layoffs are the last consideration, not the first.

*Side note – I do understand that some investors are institutional investors, but guess what?  Institutional investors are managed by people wo when you think about business you have to remember that at the top of the pyramid there is always a person or team of people making decisions.*

To be clear, I'm not disagreeing with Godin.  He's absolutely right that all of these "business decisions" are really a series of individual decisions made under the "it's only business" cover.  What I'm honing in on is this penchant for business writers/commentators to bemoan the complexity of the issue because managers must do everything they can to maximize profits because that's what investors demand.  That's probably true, but as Godin pointed out the managers chose to work there and I pointed out that investors chose to set the tone/goals for the organizations in which they invested.  The reality, as most of us have sensed for years, is that many of those "business decisions" are actually individual decisions made by the people who are directed by one very basic human motivation: greed.

Jerks Like These

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My personal take on the collapse of the housing sector of our economy is that we have wasted way too much time trying to place blame on our own perceived bogeymen.  It's human nature: when something goes wrong the first thing we want to do is figure out whose fault it is and then yell for them to be punished severely. 

The problem with assigning blame in the housing meltdown is that there are so many people and institutions to blame, and just about everybody is picking their own bad guy based on their own preconceptions. If you're somebody who sees people who use social services as leeches on the rest of us then you're quite likely to lay the blame at all the people who took out loans they couldn't pay, and you may not even consider that when people took out those loans they could pay them but then lost a job and the situation changed.  If you're somebody who sees the world through a "the Man is out to screw all of us" lens then you're likely to lay the blame at the feet of all the corrupt banksters who are funding their corporate jets by defrauding regular ol' working slobs like you and me.  If you're someone who thinks all government is bad then you're likely to blame the entire fiasco on Fannie and Freddie. Funny thing is, you're all right.

So it would seem that assigning blame doesn't help us much because the entire system has been corrupted, but without at least trying to hold people accountable we set ourselves up to do this all over again. We need to make sure that when we do find people behaving badly that we do whatever we can to make sure they don't do it again and that we let the rest of society know that if they behave in the same way then truly painful consequences await them.  For this reason I don't think it's enough to reach financial settlements with institutions that packaged toxic loans and sold them as if they weren't the crap they really were; I think you have to go after the people who made those decisions and punish them individually.  Of course it will be difficult, but until you hit people where they live you aren't going to do much to prevent it from happening again. 

Probably the biggest mistake we could make would be treating this as a purely legal issue, because until we instill ethical and moral societal norms we will have done nothing to deal with our systemic problems. People who behave ethically do not make loans to people they are almost certain will eventually default, nor do ethical people walk away from a mortgage when their bet on the property value doesn't pan out.  That's why I find people like this guy profiled in today's Wall Street Journal to be our society's true jerks:

When Chris Hanson bought his $875,000 luxury condominium in Scottsdale, Ariz., four years ago, he could afford the $90,000 down payment.

He said he had no difficulty paying the $5,000 monthly mortgage on the three-bedroom unit, which has floor-to-ceiling windows and views of Camelback Mountain. The condo is in a gated complex with a gym and pool.

And, true to his word, he didn't miss a single payment—until last month. Concluding that the home, now worth about half of what he paid, won't recover its value for at least 10 years, Mr. Hanson decided to walk away.

"It's a no-brainer once you do the math," said the 27-year-old real-estate investor.

He plans to let the lender foreclose on the home and rent an even nicer unit in either the same complex or one nearby, which he figures will cost less than half of his monthly mortgage payment…

Mr. Hanson runs an investment firm that buys up foreclosed properties and resells them. He said the company buys two to three homes a week at prices ranging from $15,000 to $1 million; they've recently expanded into distressed multifamily homes. He said he realized months ago his home would take years to recover its value but decided only six weeks ago to stop making payments.

He worried that wrecking his sterling 800 credit score would make it harder to run his business. But, in the end, he said he decided it was worth the risk.

To make my point, Mr. Hanson should have to worry about more than his credit score as a consequence of his behavior.  Part of me would love to see him go to jail, but more than anything I'd like to live in a society that would make his public shame so great that he'd never even consider walking away. Of course as long as man has inhabited the Earth we've had bad apples, but somehow I think our society has enabled far more of them than is even remotely acceptable.

Frodo’s Ring

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Tom Terrell's fantastic blog post on former NC Gov. Easley's plea deal contains a fantastic reminder for anyone in public service:

But the point, nonetheless, remains.  From lowly Soil and Water Conservation District representatives to the President, men and women elevated to elected and appointed positions have fiduciary duties to the public.  They exercise and are entrusted with powers we have handed them to take care of the rest of us. This power can be used beneficially for the common good, or it can be abused for all the reasons that gave rise to Shakespeare’s many tragedies.

The problem is that political power is like Frodo’s ring. When you possess it, it consumes you in ways you don’t understand, and it works its black magic before you realize it’s happening. All we can do is to be vigilant and to keep reminding ourselves of the weakness of the human spirit and the dangers inherent in power itself.

Our faith in our own cities and counties as well as our state and nation depends upon it.

 

So What Are You Trying to Say?

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Greensboro's City Manager sent a memo to the Mayor and City Council members that had the following item noted by an alert commenter at Cone's blog:

1. Guilford County will host an Ethics Training Class for Elected Officials in the COG region on February 16, 2010 from 8:00 a.m. – 10:00 a.m. at the Guilford County Agricultural Center, 3309 Burlington Road, Greensboro. The cost is $10.00 per attendee and includes a continental breakfast, materials and a certificate of completion. Resignation is attached for your convenience.

I can't laugh too hard; I've had my fair share of uncomfortable typos.