Behavioral Ethics and Compliance: The Pitfalls of Slippery Slopes

With the publication this past week of Dan Ariely’s The Honest Truth About Dishonesty: How We Lie to Everyone—Especially Ourselves  behavioral ethics is back in the news, and I take the occasion to return to our “behavioral ethics and compliance” series. (Prior posts in the series can be found here.)

In the history of C&E failures, much is written about slippery slopes.  For instance, in a well-known case described  in Emmanuel Tchividjian’s  EthicsBlog,   David Myers, the controller of WorldCom “was first asked by the Scott Sullivan, the CFO, back in October 2000, to enter an amount in the reserve for which there was no validation. He first refused and so did the people who worked for him. He was then approached by Bernie Ebbers, the then Chairman and CEO in a very friendly manner. Mr. Ebbers told him that he sympathized with his situation and that he should not be asking him to do anything that made him uncomfortable. However, he promised, this would be the one and only time such a demand was made, and based on the financial projections of the company, this  ‘error’ would be corrected in the next Quarter. David Myers believed him. He also knew that if he refused to make the entry he would, most likely, lose his job and would be unable to meet his financial commitments such as his mortgage payment and college tuition for his children. After much hesitation he entered the amount in the company’s reserve. Predictably, the same request was made for the following Quarters until it was discovered in 2002 and the whole scandal broke out.” The result for Myers – including prison – was far worse than what have would have happened had he declined Ebbers’ invitation.”

One of the most important facets of behavioral ethics research concerns slippery slopes. As described in a paper by Francesca Gino and Max Bazerman: “Four laboratory studies show that people are more likely to accept others’ unethical behavior when ethical degradation occurs slowly rather than in one abrupt shift.  Participants served in the role of watchdogs charged with catching instances of cheating. The watchdogs in our studies were less likely to criticize the actions of others when their behavior eroded gradually, over time, rather than in one abrupt shift.”

And, in this recent interview  Ariely discusses how slippery slopes work – based on a “what the hell effect,” and describes a fascinating experiment in which individuals who were told that they were wearing counterfeit sun glasses were more likely to cheat than those who were told that their sunglasses were genuine.

What should C&E officers do with this information?

Among other things, it should be used to train employees on the importance of not allowing seemingly trivial unethical acts to go unchecked, a particularly important point when dealing with busy business leaders who may believe that their attention should be saved for only “serious” infractions.  This can be part of a general approach to training that presents “heightened ethical awareness” as a core leadership skill.

Finally, as with the other studies discussed in this series, the training should convey the overriding importance of employees getting help – from the C&E office or another appropriate resource – when faced with ethics issues of all kinds.

Up next: the perils of C&E certainty.