The Business Ethics Blog

Here’s an interesting editorial from the Philadelphia Inquirer, “How do we repair America’s integrity?” It’s by Jim Lichtman and Richard O. Hanson. [Note: this article seems to have gone off-line. Don’t bother clicking now.]

The article is interesting for 2 reasons.

First, it includes a good, clear recounting of the Enron saga. If you don’t actually know what went on at Enron, read Lichtman and Hanson. It’s as good as any brief account I’ve seen.

The editorial concludes its recounting of the Enron mess with this:

The victim is the trust of the American people. Every time we hear of another personal, corporate, or political ethics scandal, our trust and confidence in individuals and institutions declines. But the deeper question in all of this is: How do we get back America’s integrity?

The second thing that makes this article interesting is that (I think) it’s answer to that question is a very common one, but it’s also quite wrong.

The authors mention the Sarbanes-Oxley Act (“which calls for more independent oversight and internal controls on how companies do business”), but argue that legislation just won’t suffice.

Until there is a clear and consistent change of attitude among top management concerning the method and practice of business; until corporate boards begin to live up more fully to their responsibilities instead of passing the buck; until there is a consistent demonstration of honesty, integrity, accountability and respect from the top down, ethics always will be relegated to empty platitudes on mission statements and speeches given at shareholder meetings.

The problem with this kind of prescription is that it’s silent on just how we’re supposed to achieve the requisite “change in attitude.” Are corporate execs who previously saw their mission as world domination just supposed to wake up one day and suddenly get it? Is that actually our best plan? This is akin to the idea that we could fix the environment if, you know, we all just, like, thought harder about how much we’re screwing up the earth. Of course, changes in attitude are a key part of large-scale change. This is particularly true in cases (which are common) in which we need to rely on lots of people to behave properly with limited supervision.
But the hard part is figuring out how to achieve constructive changes in people’s attitudes. Legislation is one way. Your attitude toward any activity is bound to change if you’re told that the government will take you out behind the woodshed (figuratively, hopefully) for engaging in it. Peer pressure can also change attitudes. But peer pressure results from an influential group of your peers having, and pressing you to have, a certain attitude…clearly a chain that has to start somewhere. Attitudes can also change due to negative press coverage of corporate decisions, or due to religious conversion, mid-life crisis, getting married, or divorced, or having kids, or reading a great book, or…lots of things.
So, yes, corporate attitudes need to change. But achieving the right kinds of changes, on a massive scale, in the short term, is such a serious challenge that we need to stop calling for change, and start proposing ways to do it.

(For a much more detailed, and smarter, account of this issue as it applies to environmental problems, see the chapter of The Rebel Sell called “Spaceship Earth.”)