First, Do No Harm

The notion of “first, do no harm” arises from the world of medicine. While that exact phraseology is not part of the Hippocratic Oath the intent is certainly there.  From the original oath, “I will prescribe regimens for the good of my patients according to my ability and my judgment and never do harm to anyone.”  Late in the 1800’s medical professors began to use the phrase in writings and in their lectures to students. The notion was further refined to have health care providers “consider the possible harm that any intervention might do…and recognition that human acts with good intentions may have unwanted consequences.”

As an example of good intentions having unintended consequences, it has been reported that Libyan rebels who where supported first by the United States air bombing campaign, and then NATO, overran weapons depots of the Kaddafi government, selling the mustard and nerve gas shells they obtained from those depots to the terrorist organizations Hezbollah and Hamas, through Iranian channels and funding.  As the materiel was being transported through Sudan’s well known arms smuggling routes on its way to the Gaza Strip, the individuals responsible for the arms transfer mysteriously had their car hit by  a missile.  The good intentions of supporting the overthrow of a dictator, resulting in the unintended consequences of putting extremely lethal mustard and nerve gas into the hands of those who would not hesitate to use them on civilian population centers. Protecting civilian population centers as an ethical standard seems to apply to the Libyan rebels only when those population centers are theirs.

First, do no harm, and its implication of perfect knowledge, when taken to the extreme of unintended cause and effect has the potential of resulting in greater harm through paralysis and inaction. What are the longer term consequences, if for instance I was running a company that had expenses that were greater than income, and I chose to do nothing about it? I freeze because the consequences of the potential actions (e.g. forcing early retirements, layoffs, freezing or reducing salaries, forced part-time, cutting benefits, eliminating expenses) will result in harm to a subset of individuals, the harm however, will be greater in terms of the number of people affected when the company subsequently fails.

What if a rapidly spreading disease kills 50% of those afflicted, and I choose not to distribute a vaccine that will save the lives of 50 out of 100 afflicted people, but will result in the deaths due to allergic reactions of 5% who otherwise might survive, am I guilty of greater or lesser harm? By distributing the vaccine I can save a substantial number of lives, but by acting I will knowingly kill people, but not as many as would otherwise perish. Most choices are not easy and often have unintended consequences. But what about when people act, not taking the unintended into account at all?

Contrasting the role of behavioral expectations in the roles of medicine vs. business, Jonathan Baron of the University of Pennsylvania writes, “the positive obligations that stem from ethical codes are almost always contingent on voluntary promises and agreements. Likewise in business, almost all positive obligations arise from contracts, even if the contracts are only implicit.” His point of view would conclude that the obligations that arise from an ethical moral code are voluntary, while those that arise from business are legislated through a contract. Therefore, using this logic, obligations that arise in business cannot be assumed to be executed in an ethical manner unless they are contractual and/or by extension regulatory.

The number of and types of scandals that have been evident in American business recently seems to support this notion. In the Forbes Corporate Scandal Sheet they actually state that “ we’ll follow accounting imbroglios only–avoiding insider-trading allegations like those plaguing ImClone, since chronicling every corporate transgression would be impractical–and our timeline starts with the Enron debacle.” It then goes on to list scandals that hit 21 major companies from 2002 alone. It is easy to be cynical about ethics in corporate America when you could pick up the Wall Street Journal from virtually any day and read about some ethical scandal or another.

What are the obligations of those working for or supporting organizations that are involved in unethical or immoral practices? Should workers follow some sort of code of conduct, an oath to uphold business ethics that they take upon being hired by a company? And maybe once a year they renew their vows? Should workers be able to point to an outside moral code of conduct when an organizational leader asks them to do something that crosses the line? How could a company object?

In one study Dan Ariely, MIT professor and author of Predictably Irrational found lower levels of cheating on a test when the participants were reminded of a moral code just prior to the test.  Organizations cannot actually be unethical or immoral, only people can. People are the only ones who can behave ethically or unethically and it is people who direct organizations. That is why organizations are very rarely charged with a crime, but people within organizations can be. Organizations tend to be charged only when the illegal behavior has been systematized across the institution.

The challenge will be in the definition of ethics itself. And with some of the miscommunication/varying definitions that stem from incongruous meanings of the term ethics, depending on where you sit in the organization. For a typical worker, ethics often revolves around relationships, trust, being true to your  word. If the management of an organization changes the workers benefits, work schedules, overtime requirements, staffing or workloads, the management runs the risk of being seen as in violation of voluntary promises and agreements which can be deemed as unethical. Meanwhile those in management can look at those same changes and deem them as lawful and not in violation of any contract and therefore see no ethical issue. Managements see ethics as  related more to following the legal letter of the law and based on this standard of ethics, if there is a legal way to break a contract that would be ethical  ehavior, as would be a legal way to reduce headcount etc.  Ethics is a word that holds somewhat different definitions depending on whom you are asking to define it.

But if we as a nation can derive a universal standard of business conduct, say the 15 Commandments of Business Ethics, no lets shorten it to 10 (thank you Mel Brooks), and have every worker (management as well as non-management) subscribe to those standards we may make a positive impact on what we  view as ethical behavior.

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Ariely, D. (2009) Our Buggy Moral Code, TED Talks, http://www.ted.com/talks/dan_ariely_on_our_buggy_moral_code.html

Baron, J. (1996). Do no harm. In D.M.. Messick & A.E. Tenbrunsel, Codes of conduct: Behavioral research into business ethics. pp.  197-213. New York: Russell Sage Foundation.

Debka, (04/07/2011) Special operations team hit top Iranian-Hamas arms smugglers in Sudan, http://www.debka.com/article/20821/

Forbes.com, The Corporate Scandal Sheet, (08/06/2002) http://www.forbes.com/2002/07/25/accountingtracker.html

Hippocratic Oath (4/17/2011) http://en.wikipedia.org/wiki/Hippocratic_Oath.

Jolton, J. & Saltzman, J. 2008, Preventative Maintenance: How Industrial/Organizational Psychologists Can Build and Maintain  an Ethical Culture, SIOP annual convention.

© 2011 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

The Moral Worth of a CEO

There is an old tale, coming out of the middle ages (13^th century) that describes the difficulty in understanding or knowing about a concept without a framework that lays the foundation upon which understanding can be based. This story tells of a traveler, a man, who is making a dangerous ocean passage with his infant son. Their ship is wrecked in a severe storm, the man, carrying his infant son are the only survivors. They are washed up on a deserted island. Without any books, drawings or other possessions of consequence, the man and his son still somehow manage to survive. The years go by, with just the two of them on the island, and one day the son turns to his father and asks, “Dad, where did I come from?” The man struggles to convey to his son the concept of a woman and the process of reproduction. The ideas were absolutely meaningless to the son, since he has no concept of woman, never having seen a women or even the image of a woman, and he has no basic frame of reference upon which to base his understanding.

CEO’s have taken a lot of heat over the last few years, whether it is for exorbitant salaries, perks of the office, stock options, or other activity that pad their own wallets, seemingly at the expense of other constituencies who rely on the organization (e.g. investors, employees, customers, suppliers, communities, perhaps the planet itself). They have also taken heat for off-shoring jobs, layoffs/downsizing, lack of job creation, having a short-term orientation, which goes along with a lack of vision, a lack of sensitivity, a willingness to cut on product and process safety issues, and poor skills in general on decision-making. Many of these criticisms are tinged with more than a hint of CEO’s having morality issues, that they are in it for their own personal benefit, rather than for the benefit of those whose interests they are supposed to be looking after.

Whose interest comes first and foremost? Is it the CEO him or herself, employees, investors, customers, suppliers, communities, the general public/society? Are CEO’s supposed to weigh the greater good when making decisions, or should the emphasis be based on the notion of protecting the rights of the individual or a particular group, such as investors, or should they make decisions based on the Aristotelian concept of best fit? Are they forever relegated to a balancing act, compromising and leaving everyone somewhat less than fully satisfied?

What is an appropriate frame of reference upon which we can evaluate a CEO, or any manager within an organization regarding their morality or ethics? And without a framework to build upon, how do we judge the morally correct and incorrect things to do? The different answers that are likely to come from answering the questions posed suggest that evaluating the morality of a CEO is difficult, since there is no commonly agreed to framework to base an understanding upon. What is the right thing to do, what is the wrong thing – well it depends on who you happen to be talking to and their point of view.

We could likely all agree that CEOs should not commit murder or rape for instance, but that is not what we are talking about here. We are after much more subtle morality issues, like when is it ok to layoff or fire people, to renege on a contract, to off-shore jobs, to close a plant, to pay a bribe or do special favors, to pick cheaper product or production options that might increase the likelihood of death or disaster, or perhaps simply the durability of a product, etc.

There are a number of approaches one could take in evaluating morality, and at least three major ones come to mind immediately. First there are the concepts of distributive justice, which attempts to be independent of organizational context. These include the notions of utilitarianism (managing for the greater good), libertarianism (a don’t tread on me kind of approach), meritocratic philosophy (giving everyone an equal starting point, then rewarding performance), and the difference principle (acknowledging that the starting points will never be equal, so provide equal opportunity). Other approaches are imbedded within the context of the organization itself and would include attainment of triple bottom-line goal metrics, which are ratings of organizational performance on people, planet and profit. And there is the adherence to an organizationally defined value system defining what the organization stands for and how it will treat its’ customers, employees, communities, suppliers, the planet etc.

We could start by looking at the stakeholders to which CEO’s have a legal obligation. They have, for instance, a fiduciary responsibility to the owners or shareholders who hired them. They also have statutory obligations and regulations that must be fulfilled. Sometimes there is a contract with the employees of the organization that must be followed. But legal obligations are thoroughly grounded in the mores of our society at one point in time, as legality is a shifty substance, with different interpretations over time and geography. It used to be legal in the USA for instance to dump raw wastes into rivers and streams, even if it was never an environmentally sound practice. And of course there are businesses that have moved some of their operations to third world countries where it is still legal to dispose of such waste, circumventing current USA environmental laws, enabling them to operate in a more profitable fashion. Is that moral? If it is not ok to dump the raw waste in the USA, why is it ok to dump it elsewhere?

From my own research over the years it is very apparent that the interpretation of morality or ethical behavior within a corporation varies by position and level within the organization itself. Blue collar workers are much more likely to classify reductions in benefits, salary freezes, layoffs, and a lack of control over schedule as not ethical. Among professionals the interpretation of ethical or moral behavior tends to revolve around doing what you committed to doing, promises made and not violating agreements and contracts. More senior managers will view it as adhering to legal standards. So adding to the difficulty of determining performance on morality is the various interpretations of moral and amoral behavior even within the same organization with everyone creating their own framework.

Looking at owners or shareholders, customers, employees of various levels, communities’ etc. one might rapidly come to the conclusion that an obligation to one group or subgroup, and maximizing their interests, may not be in the best interests of another group. One can only maximize a group’s benefit at the expense of others, a zero sum game.

As an aside: Those of us who are of the belief that the planet exists simply to provide for humans might argue the point, but the argument could be made that this planet is the bearer of many species, all of whom could theoretically lay claim that they have as much right to exist as humans do, if they could so argue. And so our obligation to the planet is not merely an obligation to diversity of species for the reason that said diversity benefits mankind, or an obligation to preserve the planet for future generations of humans, or that by taking care of our environment we can maintain our population, or create a healthier environment for ourselves and our children. Our obligation to Earth runs much deeper than long-term exploitation for human success. As the species that has made it to the top of the food chain, able to kill or exploit any other species that resides on this planet at will (with the exception of some bacteria, viruses and assorted others), we have an obligation as planetary caretaker to look after the Earth for the planet’s sake itself.  We are not mere residents of this planet. We have the power to shape this planet and with great powers come great responsibilities. Playing this out, just as you now can be charged with crimes against humanity for gross violation of human rights, in the future perhaps you could be charged with crimes against the Earth for the gross violation of planetary standards.

One approach that might be used in evaluating the morality of the CEO includes their adherence to achieving goals on what is known as the triple bottom line (TBL), which has been described as people, planet and profit. The people component is how employees are treated, the planet component is operating the business in a sustainable, environmentally friendly fashion and profit is furthering the value of the organization and the money that is made for the investors and owners of a business. If the organization achieves it goals in each of these three areas, it could be stated that the organization and hence the CEO is operating with high ethics or morality. But of course that depends on exactly what goals are set in each of the areas.

Another approach that some organizations have used revolves around the creation of values statements around how they are going to behave as an organization and how they expect their people to behave. These definitions are usually defined by a senior group within the organization and take shape based upon the individual values systems of the senior management team. An organization’s stated values provide a common definition and understanding of what is morally acceptable behavior and what is not. These value statements provide a framework. Organizations with these frameworks in place, I have found, are better equipped to quickly adapt and address new and challenging conditions that arise, since a common understanding is in place regarding what would be acceptable courses of action, or not, when addressing the challenge.

The bottom line, so to speak, at the moment is that CEO morality is an exceedingly difficult and slippery concept to grab hold of and tends to most often be measured by a “knowing it when I see it” mindset, rather than as a rigorously measured or defined construct, but adding rigor, a common framework to the construct can be of great value to the organization and to those constituents who interact with it.

 

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

 

 

Are we ready to eat the dog yet?

The family dog is outside playing, runs in to the street and is killed when it is struck by a car. The owners of the dog having heard that dog meat is delicious, cut up the dog, cook it, and serve it for dinner. Most people recoil at the imagery that those sentences conjure up. While many find it difficult to point to a specific rule or principle being violated in the scenario, most will say that there is something inherently wrong with eating the family’s pet dog. That inherent feeling of wrongness without pointing specifically to rule violation is called moral dumbfounding. Jonathan Haidt used the findings of his moral dumbfounding experiments to build a model of morality and argue against increased levels of rationality, or more sophisticated reasoning, as leading to higher levels of morality, an alternative paradigm proposed by Lawrence Kohlberg.   

Haidt stated that since people inherently just “knew” that certain things “felt” wrong and could not specifically state why, that morality was not being driven by rational thought, rather we first judge and then latter on attempt to build a logical case around that judgment. We need to build the logical case in order to justify the judgment we made to ourselves (settling cognitive dissonance issues) and to convince others to our point of view (which helps us confirm to ourselves that we were right all along and builds self-esteem). The bottom-line is we don’t tend to use facts or figures or carefully considered arguments as we judge what is moral or immoral, rather we first judge and then later on work to justify that judgment. Yet it is clear that people can have differing definitions of morality based on their world-views, and once judgment is made then the race is on to justify that judgment post-hoc and to win over others to your point of view. Intuitive moralistic judgments affect the political sphere, business decisions, social codes and mores, nationalistic tendencies, as well as notions of bigotry, bias and hatred driven by rationales conjured up by people that often boil down to “it just is” or “because” when all other rationales are stripped off.

There is great power over individual behavior and what people are willing to do or not do, when the moral code of a person or group of people is manipulated or coerced, often for the benefit (i.e. power, accumulation of wealth, shaping society to their worldview) of others. What was once grossly unacceptable behavior can move towards acceptability or even normalcy under the right circumstances.  For instance, if a group or organization is able to get members to commit acts that are generally considered immoral by outsiders, it will more strongly bind members to the group or organization, since those acts become “normal” group behavior and are justifiable in member’s heads by buying into the belief system or morality standards of the group. If they remove themselves from the group or organization they can fear being judged by others as acting inappropriately and become an outcast of both the group they were a member of and the larger society as a whole.

An illustration of that point comes from Congo where a war has been raging. As reported in the NY Times, February 10, 2010, a new set of vocabulary has been created in order to describe some of the atrocities being carried out there. For instance, some of the military leadership have coerced soldiers to cut off chunks from living people and then to make the victims eat their own flesh. In order to describe this, the term auto-cannibalism has been coined. In addition to being repugnant and morally abhorrent, getting soldiers to perform this grizzly act binds them to the unit, for where else in civil society would they ever again find acceptance other than in the unit in which their behavior was committed by themselves and others? They have nowhere else to go. These military leaders rather than being viewed as irrational, immoral madmen for this behavior, are crudely calculating how to increase the cohesion of the forces they are leading. They may be immoral and capable of great crimes (as so many others have been before them), but it would be a mistake to think that they are stupid. They know just what they have to do to hold onto power.

How many soldiers in how many armies over the course of humans making war on humans have been bound to their military, by finding acceptance of certain behaviors within the military unit in which it occurs? How much rationalization regarding such behaviors as necessary in order to achieve important goals has occurred? And how many whistle blowers of unacceptable behavior, within any organization, have been ostracized for publically describing practices that should never have occurred in the first place? I have great respect for certain militaries, when they are run as professional organizations with full knowledge of the inherent risks of and avoidance of inappropriate conduct.     

There is an ad being played on the local TV stations for an insurance company which shows people walking through a city and doing the right, morally correct behaviors.  Vignettes spill from one to the other with the person on the receiving end of a good deed, performing a good deed in the next vignette because it simply is the right thing to do. The implication is if you help others they will in turn do their share and so on and so forth. The company of course is implying that they to will do the right thing by you if you buy their product. This is not the insurance company trying to invent a new notion but rather they are tapping into a feeling that most people desire to experience. Moral sustainment or elevation is caused by the pleasure derived by doing the morally correct things and feeling good about it. In wanting to reproduce that pleasurable feeling of doing good, they do good again.

It was not long after the earthquake in Haiti and the scenes of chaos emerged that the money and help began pouring in. Even in a time of recession and needs at home, record amounts of cash were raised to help those less fortunate and in need of assistance. On the down side, there was a record number of charity scams aimed at taking advantage of people’s desire to do the right thing. Contrast Haiti to Chile where much less money and assistance has been delivered to help after their own earthquake. When you ask people why they did not give money and are not as moved by Chile’s plight as by Haiti’s the answer I get is that Haiti needs more help. Chile can stand on its own.      

While the notion of moral sustainment and moral dumbfounding can be written about in a rather black and white fashion, sometimes moral choices, both the dramatic ones and some that are more mundane, are not as clear cut.

Consider the morality of the following cases:

• An employee of HSBC was recently arrested by the French police for stealing information on 24,000 customers with secret Swiss bank accounts, some of which are suspected of being used for tax evasion. The French government is now using that stolen information to hunt down the tax evaders. Is using the stolen information the morally correct thing for the French government to do or should they have pursued the information through legal means?
• A ship is attacked by pirates off the coast of Somalia. The ship’s owners have to decide whether to pay ransom, knowing that if they do so their other ships will routinely be hijacked. If they choose not to negotiate with the pirates there is a good chance their employees will lose their lives. Save lives now and put future lives in peril, or put lives in peril now but perhaps save lives in the future? What is morally correct? Most ship owners do the math and do not provide security aboard their vessels, finding that simply paying ransom for the occasional ship a cheaper solution. Is that morally an easier or acceptable solution?
• A manager is working 60+ hours per week to get her job done but reports only 40 hours, as she is worried about giving the appearance of not being able to get her work done within a reasonable time period during a economic cycle in which people are getting laid off. She is worried enough about the morality of the situation, lying on her weekly time reports that she writes into The Ethicist at the New York Times looking for advice. Is it morally ok to routinely lie on order to protect your job? What are the implications on others who report accurately? What would you say?
• An organization lays-off a woman who is seven months pregnant at the start of what is generally acknowledged to be a severe recession in order to cut labor costs (no pun intended). Clearly she will not be able to pound the pavement looking for a job at this advanced stage of pregnancy. She had previously received good performance appraisals and the layoff appears unjustified and unnecessary. Is this a moral outrage?
• The research on environmental change is strong despite the recent hullabaloo over a few mistakes in some research. If acting on environmental issues was a neutral event, with no downside to anyone, would the reaction of today’s opponents to notions of limiting the pollution we spew into our environment be any different than it is? Is their opposition to protecting our planet for future generations based simply on current economic gain and comfort for themselves today? Have both sides in the argument made moral judgments as to what is right and wrong? The consequences of being wrong if the planet is not in peril is the perhaps the loss of some economic performance or some discomfort as we move to a new economy. And while no one knows for sure, the consequences of being wrong if the planet is in peril is perhaps the loss of humans as a species and potentially the Earth itself as a place that can sustain life. What is the morally correct choice?

Standards of morality do change over time and vary by culture. Slavery for instance was once acceptable in the USA and is now generally frowned upon (even though it still occurs). Suffrage, which person has a right to vote in society and is given a voice, has been a moving target over the years within the United States and elsewhere. Standards on whether gays have a right to and should be allowed access to the happiness that heterosexuals enjoy by entering into marriage is changing right now in our society. At what age should children be allowed to work, to drink alcohol, to vote, to die for their country? Some of the rationales for these decisions are based on the physical and psychological development of the children and some simply on what is perceived as morally correct.

Standards of morality do change and vary by culture, but as humans the physical and psychological mechanisms that cause us to judge some behavior and positions as moral, while others are judged as immoral are unlikely to. Knowing and understanding these mechanisms can perhaps lead us to making better moral judgments, and perhaps to a better understanding and more toleration of those who disagree with our own points of view.

I can see the family dog sitting on the floor next to me as I write these words and I give her reassurance that she has nothing to fear about becoming the next meal for this family, unless of course she really misbehaves or our moral standards significantly change. Just kidding.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit www.orgvitality.com