How ethically confident should we be?

My favorite Marxist philosopher – Groucho – once said: “I have nothing but confidence in you, and very little of that.” But the same is not true of how much confidence we tend to have in ourselves.

An article last week in the Slovak Spectator  reported that “one of the findings of a survey conducted by the Slovak Compliance Centre… in 2014 [was that] ‘[t]he companies seem to be quite sceptical of the conduct of other market players while expressing relative confidence in ethical conduct inside their own organisations,…” I imagine that one would find similar asymmetry of views  nearly anywhere in the world.

Indeed, much of the field of “behavioral ethics” is addressed to proving that “we are not as ethical as we think.”  Prior posts on behavioral ethics can be found here.

The view of human nature underlying this key insight predates the behavioral ethics field.  Perhaps most famously, Judge Learned Hand said in 1944:  “The spirit of liberty is the spirit which is not too sure that it is right.” I believe that this is a good way to view the spirit of compliance and ethics too.

At least as applied to C&E, this is not to say that we should be relativistic about what is right.  Rather, we should be skeptical about our ability to do what is right when pressures or temptations pull us in the wrong direction. Those likely to be confronted by risks of misconduct (e.g., corruption or competition law violations) should strive to be ethically alert – which is not always consistent with being highly confident.

Indeed, while the focus on corporate culture is a generally a very positive development in the C&E field, it carries the danger that having a strong culture could be seen as obviating the need for the regular “blocking and tackling” that C&E programs are based on.  This is particularly true of glorification of – and over-reliance in some companies  on –  the “tone at the top.”

On the other hand, one should also be skeptical about the value of pessimism. Given how relatively new the C&E field is – and the tendency for many to view it as a fad which has overstayed its welcome – a truly pessimistic view can effectively scuttle a compliance program.

That is, some degree of optimism is absolutely necessary for the effective operation of a C&E program – whether it is a salesperson choosing to forgo a questionable business opportunity or a mid-level manager deciding whether to call the hotline. Optimism is also necessary for boards of directors and senior managers in determining whether to invest the substantial time and other company resources needed to develop and maintain an effective C&E program, particularly given that the empirical case for such programs is still a work in progress.

For every company, the right C&E confidence quotient will be different.  But all should to some degree be both skeptical and optimistic.

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