Too big for ethical failure?

An article last month in a magazine published by the NY Times provided the occasion for a noteworthy COI discussion.  The Times had given Laura Arrillaga-Andreessen the assignment of profiling the head of Airbnb for an issue of “T” magazine. However, her husband, Marc Andreessen, is a substantial investor in that company – which was not disclosed in T’s (very favorable) article about Airbnb, as described here.

T’s editor explained the lack of disclosure as follows: “it was my mistake in not asking her if there were any potential conflicts. This was an oversight on my part. I say this not as an excuse, but she is, separately from her husband, a billionaire (making her through marriage a billionaire twice over) and for that reason I think I failed to consider any monetary conflict in her case.”

A writer in Gawker characterized this explanation as saying, in effect, that billionaires are too rich to have conflicts of interest.  I think that’s a fair comment.

While the specifics of this case are particularly interesting to Silicon Valley watchers, for C&E professionals the notion of being too rich to be corrupted is sadly an oft-told tale.   It comes up most frequently in the gifts/entertainment and other COIs areas when C&E officers are asked to approve a transaction (e.g., entertainment provided by a vendor) for a high-level employee that would be impermissible for others in the organization. The basic thought is that the individual in question already has so much money (or what money can buy) that more won’t affect her judgment.

There is a logic to this, but it is based on the increasingly discredited homo economicus view of human nature.   This view would presumably treat the corruptibility of a person in a given situation as fraction with the amount being offered as the numerator, the individual’s total wealth the denominator, and the larger the overall number the greater ethical risk.

By contrast, when viewed through the lens of behavioral science (and human experience), the rich and powerful can be seen as more corruptible than others, as discussed in prior posts such as this one.   The most memorable expression of this may be the saying attributed to the late Leona Helmsley that “only the little people pay taxes.”   But the reflection of actual COI risk being concentrated near “the top” echoes through our new stories on a nearly daily basis.

Additionally, there are many types of conflicts that cannot be measured in a purely monetary way, such as those involving  glory (as described here), friendship (discussed in the second case in this post) or family relationships (discussed here). Even if  they are not inherently more susceptible to COIs, from a situational perspective, the high and mighty presumably are faced with more frequent pressures and temptations of this sort than are most other individuals (as briefly touched on in this earlier post).