Friday, August 13, 2010

Ethics Codes Don't Make People Ethical, Commentary by Michael Josephson

Ethics Codes Don't Make People Ethical 684.1:

In the wake of a continual parade of scandals, there has been a lot of talk concerning codes of ethics. I've written dozens of codes and have a healthy respect for their value as an element of a corporate culture, but I wince at the unreasonable expectations attached to these documents.

First of all, ethics codes don't make people ethical. They don't make bad people good. Nor do they make people with bad judgment wise. Most of the very bad behavior we've seen in recent years would not have been prevented by an ethics code.

You see, there are two aspects to ethics: discernment – knowing right from wrong – and discipline – having the moral will power to do what's right. A code can help define what's right and acceptable and provide a basis for imposing sanctions on those who don't follow it. But unless it reinforces an established ethical culture, it won't do much to assure that people do what's right.

It's proper and prudent to clarify obligations under existing laws and establish standards of conduct in areas not governed by law. In effect, ethics codes transform one perspective of a moral obligation into a binding rule. For example, it's helpful to set clear parameters for the use of e-mails, private information, or company property; hiring or doing business with relatives; and the acceptance of gratuities. In more complex cases, codes can mandate disclosure or certification and forbid or restrict transactions such as loans and reimbursements that could create real or apparent conflicts of interest.

To the extent we need more clarity, we need more codes. To the extent we need more character, we need a lot more.

This is Michael Josephson reminding you that character counts.

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