Behavioral ethics and compliance – what to do about “framing” risks

Over the past few years, the COI Blog has devoted a fair bit of attention to considering what “behavioral ethics” can mean for corporate compliance programs.  An index of these writings can be found here.  Conspicuously absent from this compilation was anything on the important behavioral concept of “framing.”

But blogs abhor a vacuum, and fortunately this gap has now been filled courtesy of an excellent article by Scott Killingsworth (of the Bryan Cave law firm) in the latest issue of Ethisphere magazine.  As he notes:

Psychologists have much to say about the phenomenon of “framing”—the process by which we decide “What kind of situation is this? What rules and expectations apply?” How we frame a situation affects our thinking and our behavior. We know, for example, that merely framing an issue as a “business matter” can invoke narrow rules of decision that shove non-business considerations, including ethical concerns, out of the picture. Tragic examples of this “strictly business” framing include Ford’s cost/benefit-driven decision to pay damages rather than recall explosion-prone Pintos, and the ill-fated launch of space shuttle Challenger after engineers’ safety objections were overruled with a simple “We have to make a management decision.” We are surprisingly susceptible to external cues about how a situation should be framed. For example, researchers have found that simply renaming “The Community Game” as “The Wall Street Game” cuts cooperation in half: the business frame suggests not only what is expected of us, but what tactics we should expect from our opponent.

There’s much more to this article, but I won’t quote or summarize anything else as I encourage you to read the original. However, I do want to add two thoughts about what framing means from a C&E program perspective.

The first is pretty obvious: framing – and other key behavioral ethics concepts – should be part of C&E training.  In particular, companies should consider including a high-level review of behavioral ethics concepts (with examples) for general employee training and a more detailed version for senior managers and “controls” personnel.

The second is less obvious: these dangers underscore the importance of having a C&E  officer whose “reach” makes it likely that she’ll be at the table when framing risks  first surface.  Moreover, that may be an additional reason to have a CECO who also wears the General Counsel hat (as discussed in this recent post),  since by definition these risks don’t appear to be ethics-based; i.e., the GC in most companies is more likely to be part of what is ostensibly a general business discussion than is a non-GC CECO.