Behavioral ethics training for managers

In “Companies Need to Pay More Attention to Everyday Unethical Behavior” – published last month in the Harvard Business Review  – Yuval Feldman, Professor of Legal Research at Bar Ilan University, argues:

Many large scandals have sounded the alarm on the need to monitor corporate corruption. The typical response from policy makers is to propose a patchwork of reforms to address various corporate transgressions. But by and large, these reforms focus on preventing gross and blatant violations of the law – and they ignore the more banal, ordinary acts of unethicality that are far more common in organizations. Numerous studies have documented the prevalence of practices such as stealing office supplies, inflating business expenditures reports, and engaging in behaviors that raise conflicts of interest. While these may sound negligible, these violations reduce trust over time and alter prevailing business and legal norms. Their aggregated effect can be quite harmful. Behavioral ethics research suggests that this type of misconduct occurs not because people are unethical or deliberately choose to act unethically, but because they fail to understand that their behavior is indeed unethical and can have harmful consequences. Thus, sanctioning rule breaking and looking for “smoking guns” will not prevent most employees from acting unethically. If organizations want to do a better job at preventing misconduct, they need to adopt a two-stage approach. The first stage focuses on increasing people’s awareness of the illegality and unethicality of their behavior. The second stage is about ensuring that employees clearly recognize that misconduct will be penalized.

Achieving what is contemplated by both of these stages could sound daunting – particularly the first. However, for companies that already have compliance and ethics (“C&E”) training for managers and supervisors there may be an opportunity to use that training to increase employees’ awareness of the sort of risks described by Professor Feldman.

That is, such training can be expanded to include:

– A brief explanation of the findings of the above-referenced behavioral ethics research.

– An explanation that managers’ C&E duties include identifying seemingly negligible risks in their respective parts of the organization that could over time adversely affect trust there.

– An expectation that these risks will be addressed by managers when speaking to the workforce (e.g., in townhalls, staff meetings, etc.) and through written communications.

Note that I am proposing a more or less “local” approach to this issue, as opposed to a top-down one, as I believe that having managers of various ranks involved in the process is necessary to make the effort risk based. Also, hopefully being given this role will lead managers to reflect on their own ethical performance.

Note that there is much more that can be done in communications and training to use behavioral ethics information and ideas to prevent and detect  wrongdoing. See prior posts collected in this index.

There is also more to be said about slippery slopes, some of which can be found in this prior post.

Finally, here is an article on drafting managers’ C&E duties.