The Dodd-Frank Wall Street Reform and Consumer Protection Act has finally been signed into law and President Obama has predicted that, because of the Act's new requirements, "the American people will never again be asked to foot the bill for Wall Street's mistakes." He may be a trifle over-optimistic.
History has shown time and again that, when the opportunity to grab quick profits presents itself, ethics can all too readily take a back seat to the entrepreneurial spirit. Unless the financial services industry fully commits itself to more ethical business practices, it will only be a matter of time before the wizards of Wall Street find a way around any inconvenient restrictions in the Act as they continue their quest for ever-higher profits.
Still, most CEOs, including those at Wall Street firms, are smart enough to recognize that it's bad public relations to openly thumb their noses at business ethics. Companies post lofty codes of conduct on their websites, train their employees on them once a year (maybe), then toss them on the shelf and turn their attention back to an intense focus on the bottom line. That approach only encourages unethical employee conduct, because it sends a clear if unspoken message that management may pay lip service to the importance of honesty and integrity in business but, at the end of the fiscal year, only profits count.
One way that companies teach ethics is by using training films. Some of them are very good - John Cleese did a notable series a few years ago, and the comic geniuses at Second City recently launched a new ethics training series that promises to be hilarious. Some companies balk at using funny training films, though, worried that they may be perceived as taking ethics too lightly. And then, there's the expense; the cost of buying or renting films produced with high-profile talent can quickly exceed the amount that companies are willing to spend.
Some companies try to save money by having their in-house executives deliver their ethics training. While that approach can demonstrate that management supports ethical practices, unless the executives are sufficiently knowledgeable about ethics and skilled at public speaking, the results tend to be mixed. Contrary to popular perception, the average business executive can't effectively teach an ethics course based solely on what he learned at his mother's knee; "say you're sorry when you hit Johnny" doesn't necessarily evolve into "don't defraud Johnny by selling him subprime mortgages without telling him that's what he's buying."
Similarly, the qualities that make a top notch business person don't necessarily make a great trainer. When Steve Carell danced and sang "Let's Get Ethical" on
, he embodied the well-intentioned corporate executive who lacked any real understanding of what good business ethics are and how to teach them to his colleagues.
There are many competent consultants and speakers who make their living talking about business ethics, and they can provide valuable lessons to employees. Like any outside expert, however, they often deliver their message and depart, which can limit the value of the training they offer. No matter how compelling the speech or instructive the workshop, unless an outside business ethics expert stays in contact with a company and continues to provide guidance, the expert's teachings may not be of much help when that company's leadership is faced with an ethical crisis three years later.
A company's best approach to developing and delivering good ethics training may well be two-tiered. First, take advantage of the expertise an outside consultant and speaker can offer to develop your company's code of ethics and initially train employees. Then, make sure that someone in-house has both the necessary authority and the training to build on the consultant's work and keep the message fresh. These days, a large company that lacks an ethics and compliance officer is begging for trouble, especially in the highly-regulated financial services industry.
There are various resources that companies can use to train their executive employees in business ethics. The Society for Corporate Compliance and Ethics offers two levels of credentialing, and certifies compliance professionals who successfully complete their training program. Several universities offer advanced degrees in ethics. For employees with other immediate responsibilities, however, travel out of the office to study business ethics can be simply impractical.
Perhaps the most exciting new alternative for employers who want to provide employees with an authoritative understanding of business ethics is the new Masters of Business Ethics program offered online by the New England College of Business and Finance. (Full disclosure: I expect to teach the class on international business ethics there next year.) This first-of-its-kind program is accredited by the same accrediting organization as Harvard University, and offers an applied program with a focus on ethical outcomes. That's important, because an academic understanding of ethics in the abstract does not always translate into ethical conduct. (After all, law students have had mandatory professional ethics courses since the Watergate scandal. Need I say more?)
The program is rigorous but, because classes are taught online, does not require extensive travel, and that reduces expense. Any executive in the world with an interest in learning the essentials of applied business ethics need look no farther than her computer for a substantive, high-quality program.
Tone at the top remains essential to every aspect of a successful business, including the business' ethics. If management demonstrates a commitment to ethics by investing resources in training an in-house ethics and compliance officer, that sends a strong message to the company's employees that ethics is taken seriously.
If management then supports that officer in training the staff and addressing ethical issues that arise in the company's day-to-day operations, the message gets even stronger. A perceived lack of ethics on the part of Wall Street financiers has led to the adoption of thousands of pages of new law. Had Wall Street voluntarily paid more attention to ethics a few years ago, it might face fewer legal restrictions today.
Lauren Bloom is a Washington, D.C. attorney and the CEO of Elegant Solutions Consulting, a consulting firm dedicated to helping professionals, business and association management executives build trust with their clients, customers and members by "walking the ethics talk" in their daily practices. She is the author of the "The Art of the Apology -- How to Apologize Effectively to Practically Anyone."