Compliance Culture

Practical insights for compliance and ethics professionals and commentary on the intersection of compliance and culture.

Last week on Compliance Culture

Check out last week’s posts on Compliance Culture, in case you missed or want to revisit them.

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Selected TED & TEDx talks on ethical dilemmas

An ethical dilemma is a problem in decision-making between two or more possible choices which involve conflicting interests and challenging possible consequences. Often this can be understood as a scenario in which making one decision has an impact on the interests involved in the other decision(s) not made. Choosing to not make a decision is also, in its own right, a choice which implies these consequential dynamics. The below TED/TEDx talks are a sampling of some different dilemmas encountered and the ways that the speakers have thought about and attempted to resolve them.

  • The ethical dilemma of designer babies (Paul Knoepfler) – Biotechnology which was once the stuff of science fiction is now becoming an everyday reality, or at least a possibility that is easy to imagine for the not-so-distant future. For many years now there have been ethical questions about the use of gene editing technology in human embryos. This could allow scientists to mitigate the risk of certain auto-immune or congenital diseases, which would be a marvel of modern medicine. However, it could also make the way for individuals to use the technology to also alter physical appearance and pre-determine many of a person’s traits, perhaps also eventually personality characteristics. What answers does bioethics have for this dilemma? Is it worth the risks, too dangerous to justify the benefits, or somewhere in between – a technology that should be progressively and thoughtfully developed with both those risks and those benefits in careful balance?

 

  • Can we engineer the end of ageing? (Daisy Robinton) – While the prior talk considers the beginning of life, there are also bioethical considerations to scientific advancements made concerning the end of life also. Just as there can be cellular interventions on the biological makeup of embryos, therapeutic mechanisms of stem cell identity may already be useful in increasing longevity and health, such as by reversing the growth of cancerous cells or addressing other developmental diseases. However, what about the possibly to “edit” one’s DNA not for survival or to cure a sickness, but to improve capabilities or change aesthetic qualities? If some physiological differences are editable at the cellular then is it ethical to do so?

 

  • The Social Dilemma of Driverless Cars (Iyad Rahwan) – Self-driving cars have been in the news a lot recently as leading organizations such as Ford, General Motors, Tesla, and even Samsung are making major investments in developing field. In the US, the federal government has indicated that it prefers to let technological innovation take precedence over anticipatory regulation, perhaps taking lessons learned from the initial failure of the electric car industry in the 1990s and early 2000s. The artificial intelligence of self-driving cars is ethically challenging, in consideration that these driverless vehicles will share the road with pedestrians and conventional vehicles. Will they be safer than cars with human drivers, or do they bring up all kinds of new safety and privacy concerns?

 

  • Machiavelli’s Dilemma (Matt Kohut) – More to the point of typical everyday interactions than the abstractions of the limits of medicine and technology, what about character judgments? The classic question remains – do we want to be loved or feared? Liked or respected? Most people of course would say some combination of both, but in first impressions or in difficult leadership situations, sometimes the choice to be one at the expense of the other is unavoidable.

 

  • The paradox of choice (Barry Schwartz) – The thing of all these different dilemmas have in common is, of course, choices that individuals, organizations, and sometimes society as a whole must make. Facing the responsibility of making a choice indicates that there is freedom of choice in the first place. The privilege of decision-making can also be a burden. One must be able to decide in the beginning in order to feel some sense of personal dissatisfaction or insufficiency provoked by the idea that other choices, and other outcomes could have been possible.

 

As the above demonstrates, there are many diverse examples of ethical dilemmas which come from all areas of business and life. This effectively points out how ubiquitous these challenging situations are. From simple, everyday interactions to matters of life and death, ethical dilemmas present challenging, compelling moral questions.

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Round-up on counterfeiting of consumer goods

Counterfeiters have existed for time immemorial. Ever since the concept of value was introduced by exchange of money and the idea of authenticity or identity first became established, fraudsters have aimed to produce fake money and forged documentation. Following the counterfeit money were unauthorized copies of the products that the money could purchase, a trade which has become ubiquitous and sometimes even represents a larger market than that for the authentic item.

With the spread of globalization, a diverse range of counterfeit products are sold and bought all over the world. Sometimes this is without any attempt by the seller to deceive, with the fake product offered to a consumer who willingly buys a bootleg or replica copy. Others are to customers who think they are purchasing the real thing, often from a very expensive or luxury brand or of a very popular and desired item.

No matter the intent behind the transaction, commerce in counterfeit items is growing all the time and presents many dilemmas for corporate investigators and law enforcement in identifying the fraudulent practices and protecting both brands from this illicit trade while preventing consumers, wittingly or otherwise, from engaging in it.

  • Most of the world’s counterfeit items are produced and manufactured in China – enough so that the trade in these fraudulent goods is a $400 billion industry, by some accounts representing as much as 10% of China’s GDP. This is a striking paradox, as many authentic items such as Nike shoes and Apple iPhones are produced practically alongside knockoff versions of the same. While the traditional logic is that counterfeit goods are part of the assumed risk of doing manufacturing business in China, corporations are actively trying to take control via clever action against fraudsters. Brand protection efforts include hiring private investigators to find and seize fake goods and try to navigate the complicated, labyrinthine underground of the Chinese counterfeiting industry:  To Catch a Counterfeiter
  • South Korea has joined China as one of the major world centers for counterfeit activity. However, unlike many of the goods which come from China, which are low-quality replicas that make unconvincing fakes to the educated consumer, the market in South Korea is knowingly demanding for “copycat brands.” These consumer desire is driven by the prevalence of streetwear fashion which replicates items worn by celebrities and seen on the internet from brands which are not easily purchased or even available in South Korea. In order to answer customers’ requests to be up on these global trends, counterfeiters are making high-quality fakes to sell to the fashion savvy who might not even care whether their items are real, as long as they are able to access the desired style:  Why South Korea Is the Home of Counterfeit Culture
  • More than what’s in a name – what’s in a set of parentheses? For years Costco has sold rings advertised on their in-store signage as “Tiffany” rings. There is no affiliation between the rings sold by the wholesale giant and those available at the specialty jewellery retailer Tiffany & Co. While Costco made no claim that it was selling imitations of the Tiffany & Co. rings, Tiffany alleges that calling the rings “Tiffany” on the signage was a false identification, and that consumers could have been misinformed and mistakenly purchased the rings believing they were Tiffany & Co. A judge has ruled that Tiffany is entitled to almost $20 million in damages and interest from Costco for this marketing scheme, indicating that “Tiffany” is not to be used a generic term to describe the setting of a ring to consumers, as Costco alleged it was intending to do:  Costco owes Tiffany more than $19 million for selling counterfeit rings 
  • Counterfeit goods in the apparel market are well-known, everyone having seen before the ubiquitous fake Louis Vuitton and other designer bags that brands have been fighting against for years. Another area in fashion where fakes are becoming prevalent is makeup. The black market in the beauty industry is growing all the time, with counterfeiters making and selling popular products to satisfy demand when the real ones sell out quickly, aren’t available in certain markets, or are highly priced. The safe and hygienic production of makeup is a very complicated business, involving health standards, inspections, and scientific processes, which fraudsters do not typically invest time or money to replicate along with the products. Consumers having gotten sick and injured from using these fake makeup products which are often ordered online or bought in the discount shopping districts where knockoff handbags used to be the main fare. Especially concerning is that many people purchase these fake cosmetics in bulk, to fraudulently resell online as the real thing or to use on unsuspecting clients as makeup artists:  We Went Inside Beauty’s Black Market & It’s Worse Than You Think
  • Equally concerning to consumer protection and safety as fake cosmetics is the growing prevalence of knockoff wine. The Chinese market is participating in rising prices and demand in a hot retail wine market, for auction buyers, home drinkers, and restaurant suppliers alike. Along with these eager buyers, as always, come the sellers of counterfeit and contraband products. Fake imported wines abound in China. On high-ticket wines, empty bottles of the real thing are actually sold on the black market and then re-filled with fake wine to be sold to unaware purchasers. Aside from damaging the high-end market with a flood of counterfeit wines, there are also concerns for the average consumer. Sometimes dangerous ingredients and chemicals are added to cheap wine to change the color or taste in order to fool consumers, who can then get sick from the doctored alcohol:  China Is Facing An Epidemic Of Counterfeit And Contraband Wine

Companies and governments worldwide are doing their most to crackdown on the illegal production and manufacture of counterfeit goods, and to prevent the sale of these products to consumers. This is an effort which requires international cooperation and a constant pursuit to stay up to date in the counterfeiters’ methods in order to attack and prevent their attempts. Consumer protection and brand value to corporations are both at risk in the continued spread of these illicit practices and products.

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Deep dive on what happened at Enron

Almost 16 years after Enron declared bankruptcy in December 2001, questions about the root causes of the financial fraud and ensuing publicity of the corrupt business practices there persist. Despite the subsequent years where other major bankruptcies and the global financial crisis may have somewhat desensitized the public to these scandals from the greater business world, the many answers to the “why” of Enron’s fraudulent business practices are still fascinating to contemplate.

  • Enron: The Smartest Guys in the Room: This 2005 documentary, based on the 2003 book of the same name written by Fortune magazine reporters Bethany McLean and Peter Elkind, and directed by noted filmmaker Alex Gibney, is the seminal work on the Enron scandal. The film goes back deep into Enron’s history to unpack why its success of the 1980s and 1990s and its desire for sustained growth and competitive edge in new business areas, drove its fraudulent practices ever deeper into the corporate culture. Great attention is paid to those “smartest guys” – Kenneth Lay, Jeffrey Skilling, Andrew Fastow – and their sometimes philosophical, occasionally political, and always profit-motivated, views of management that contributed to the fraud.

 

  • The Crooked E: The Unshredded Truth About Enron: This television movie from 2003 is based on the book Anatomy of Greed by Brian Cruver.   Cruver was an ex-Enron employee and detailed his personal experiences there in addition to those of several anonymous colleagues, some very senior members of the organization. The movie shows how the lack of organizational integrity made an impression on Cruver, a good person who found himself doing bad things because of the unethical environment and processes in which he was working. The excesses of the corporate culture are shown in great detail and in contrast to the suffering of shareholders, including many employees who had their retirement funds entirely invested in the company, that followed the company’s collapse in 2001.

 

  • Enron Explained: An Insider’s Account: On a similar, but non-dramatized note, this 2006 C-SPAN American Perspectives program provides a deeper look at the workings of the accounting practices and corporate culture at Enron. This time it is from Robert Bradley, who was the Director of Public Policy Analysis at Enron. Bradley provides detail into the technical aspects of the accounting fraud as well as his personal perspective on Kenneth Lay. From Bradley’s point of view, Lay’s actions should be viewed in light of the narrow framework in which he had worked, achieving great success in his years at Enron by focusing on profit-driven business strategies that promoted driving for financial gains and did not emphasize strategic ethical decision-making. While certainly not an excuse for lack of personal accountability, or a legal defense, this is a powerful lesson for how strong organizational contexts and heuristics can impact employee integrity.

 

  • Bigger than Enron: The PBS documentary series Frontline took on the Enron story in 2002. This program suggests presciently that the bankruptcy of Enron, which immediately became one of the largest scandals in the history of American business, could actually have the harbinger of the deeper systemic weaknesses. From the current standpoint, of course, this points directly to the subsequent economic and regulatory crisis in the global financial markets that began to unfold in public in 2007-2008. From this perspective, the root causes of that crisis go much deeper than the fiscally unsustainable growth of the sub-prime mortgage market and subsequent securitizations. Instead, epic failures in the oversight system – from management, from government, and from outside business partners such as auditors – exposed investors to huge losses and enabled corporate fraud such as occurred at Enron and other major companies before and, indeed, after its 2001 collapse.

 

  • Sherron Watkins at UNC Kenan-Flagler Business School: Sherron Watkins was Vice President of Corporate Development at Enron and is known to history as the author of the August 2001 memo to CEO Kenneth Lay detailing the questionable accounting practices she noticed in the company’s financial reports. Five months later her memo was made public, and she is therefore thought of as the Enron whistleblower. Watkins was criticized in the aftermath of Enron’s bankruptcy for not going public sooner and not immediately escalating her suspicions of the fraud to Enron’s regulators or law enforcement. The speeches Watkins has given in the years since Enron’s bankruptcy, such as this one, focus on how complicated acting as a whistleblower is in reality – not what you would do better than someone else in a hypothetical situation, but what you would or could actually do if it happened to you. This is a challenging ethical dilemma and one that organizations must consider in order to create a reporting system in which whistleblowers are encouraged and protected.

 

The Enron business case remains one of the most famous examples of modern corporate fraud and corruption. Studying the root causes behind the fraudulent accounting and business practices provides insight for why an effective controls and reporting framework is so important for investor protection and markets integrity.

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The Madoff Ponzi scheme scandal

For more than 40 years, Bernie Madoff was one of the most prominent figures in the US financial services industry.   His trading firm, Madoff Securities, was founded in 1960 and due to its early adoption of then cutting-edge technology quickly became one of the major market makers in the business. The firm’s technology that it participated in creating later became the NASDAQ trading exchange. Apart from its brokerage business, Madoff Securities also offered investment management and advisory services to many prominent clients. These included banks such as Banco Santander, HSBC, RBS, and BNP Paribas; hedge funds; university endowments; charitable organizations; and famous individuals such as Steven Spielberg, Zsa Zsa Gabor, Sandy Koufax, and Elie Wiesel.

Madoff himself was very well-known in the securities industry. He was on the board of directors of the Securities Industry Association (SIA), the predecessor to the Securities Industry and Financial Markets Association (SIFMA), and served as chairman of SIA’s trading committee. He was also active in the National Association of Securities Dealers (NASD), the self-regulatory organization (SRO) for brokerage firms and exchange markets that predated the Financial Industry Regulatory Authority (FINRA), and served on the board of directors of the SRO, for a period even as its chairman

This last professional designation for Madoff seems ironic now. In reality, Madoff’s investment management business was revealed in December 2008 as a $65 billion Ponzi scheme, the largest financial fraud in US history. This massive fraud was carried out by Madoff and a close group of associates right alongside his legitimate brokerage business and taking full advantage of his huge network of investors and prominent reputation in the industry. In the scheme, trades and returns were completely fabricated and investor redemptions were funded by new infusions from individuals that Madoff aggressively pursued, touting his performance.

Despite numerous SEC investigations of various areas of Madoff’s business, and several outside analysts publicizing urgent and detailed concerns about the business and its purported performance claims which could not be replicated for authentication purposes, this scheme continued unmitigated for at least 15 years, per Madoff’s admission. It may have gone on for as long as 30 years, back to the very beginning of the investment advisory arm of Madoff Securities.

Madoff struggled to keep the fraud going as the global financial crisis caused the markets to contract throughout the fall of 2008, and investors sought redemption. Still, he managed to stay afloat until December 2008, when his sons, Mark and Andrew, confronted him about bonuses he wished to pay amid the mounting investor redemptions. Madoff confessed to his sons that the investment management business was a fraud, and his sons then reported him to law enforcement. In the subsequent months the shocking scale of his fraud and the losses it caused became the subject of public fascination.

For interesting insights on the fraud and scandal surrounding Bernie Madoff’s Ponzi scheme to defraud investors, check out these videos:

  • The Madoff Affair – An episode of the PBS documentary program Frontline from May 2009, when the complete scope of the scandal was still being discovered, which aims to tell the story of the fraud from the beginning and question how it was able to go on for so long.

 

  • The Man Who Knew – This March 2009 60 Minutes segment features Steve Kroft interviewing Harry Markopolos of Rampart Investment Management. Markopolos was a vocal critic and doubter of Madoff’s claimed investment returns. He attempted to alert the SEC on a number of occasions to the fraudulent practices he believed he had discovered in his study of the alleged performance of Madoff Securities, but he was ignored or his claims were not thoroughly investigated.

 

  • Ripped Off: Madoff and the Scamming of America – This is an April 2009 which looks at Bernie Madoff’s fraud in comparison with other Ponzi Schemes of the prior hundred years. With this study, the investigation assesses the magnitude of the damage Madoff’s scheme caused and places it in context of the global financial crisis which was beginning to deepen at the end of 2008.

 

  • The Hunt for Madoff’s Money– This February 2009 segment from the ABC news program 20/20 asks where the money that Madoff defrauded from his investors went, other than fund withdrawals by others’ withdrawals. The investigation looks at the luxury lifestyle and properties of Madoff and his family members and associates that were enriched by his fraudulent investment management scheme.

 

 

  • Madoff Victims on Guilty Plea – In this March 2009 report from CBS News, nine people who lost their investments in Madoff’s Ponzi scheme speak to Katie Couric about their reactions to the exposure of the massive fraud and his guilty plea that resulted in him being sentenced to 150 years in prison without standing trial.

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Using ethical dilemmas for creating a compliance training dialog

For effective compliance training, learners must be prepared to discuss and challenge dilemmas independently and with others. The details of specific policies, directives, and regulations can quickly become very dry and irrelevant, whether the audience is made up of compliance officers, senior managers, or new starters. To prevent topic fatigue and keep important compliance training vivid and engaging for those attending awareness sessions, it is important to encourage discussion. An active participant will think, care, and learn more than one who is just watching the clock for the end of the program.

One way to spark discussion that can be employed at all levels is using ethical dilemmas. This is effective either as a stand-alone program, where attendees are introduced to ethical dilemmas and spend time in groups discussing their ideas and views, or as an icebreaker to a content session, to grab the audience’s attention and test their knowledge from the beginning. This can provide an approach to then thinking about the practical handling of compliance subject which is both easy and enjoyable.

Considering and responding to ethical dilemmas helps learners to build fluency with ethical decision-making and evaluating potential conflicts of interest, especially in balance with their own possible interests. Giving meaning to the impact of behavior and choice is significant for establishing cultural values that emphasize individual responsibility and integrity. Dilemma analysis involves several simple but thought-provoking steps following the prompt:

  • What is the ethical question?
  • What personal values are relevant in considering this ethical question?
  • Who are the parties with interests in this dilemma?
  • What are their interests and how do they conflict?
  • How can the ethical question be answered and what are the potential consequences?
  • What is the decision in response to the ethical question?
  • Is the choice that came from the decision-making process of the dilemma possible/practical to do in light of all considerations and consequences?

Ethical dilemmas used as such for prompts in compliance training should be universal and straightforward. In general, dilemmas used to teach this style of thinking to beginners or to instigate audience participation in at the start of a session should not focus on specific employee responsibilities or business functions. For very advanced and targeted audiences it may be acceptable to give a anonymized example of a dilemma they may come across in their work, but for the most part, daily life dilemmas are more relatable and more fun to discuss, regardless of the experience level of the participants.

Some examples of simple dilemmas that can be analyzed as described are:

  • You are meeting some friends at a standing room-only concert and arrive late. As you approach the venue you walk past your friends, who are got there early and are waiting near the front of the line. They tell you they have been there for almost two hours and invite you to join them where they are in the line, even though the end of the line is very far behind them.
  • Your company has been considering some wellness initiatives to offer to employees as benefits but hasn’t contacted any providers yet. Your roommate just finished yoga teacher training and wants to get experience as a corporate instructor.
  • You are taking an exam after studying hard for days to prepare and attending every class the entire term. However, you woke up this morning with a terrible cold and can’t focus. You know the professor will not allow a rescheduled or make-up test. There is no proctor in the room and you have all of your course material with you.
  • You and your partner have a joint bank account where you are both named. Your partner is one week into a two week trip abroad when a letter comes from the bank. You have to fill out and return a form with both your and your partner’s signatures. If you don’t return the form within two business days you will not be able to use your credit card.
  • You are taking your relative to an urgent doctor’s appointment. The parking lot is quite busy but all three of the parking spots designated for disabled drivers are empty. Your relative has no problem walking, but you are already five minutes late for the appointment.

Choosing simple prompts like the ones suggested above will allow the learners to be more creative and perhaps to even engage in discussion with themselves. The facts may be straightforward, but the huge array of perspectives and outcomes that people can suggest is always impressive. By keeping the dilemma prompt at a level everyone can understand regardless of his or her own background and initial interest, the dialog can be truly inclusive. This allows the person who is running the training session to fall into the role of a true facilitator, which offers the enriching experience of watching individuals converse organically on these provocative questions.

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This week on Compliance Culture

Be sure to visit Compliance Culture this week for posts on these topics.

  • Monday: Using ethical dilemmas in compliance training
  • Tuesday: Bernie Madoff and financial fraud
  • Wednesday: Root causes at Enron
  • Thursday: Trends in counterfeiting of consumer goods
  • Friday: Diverse viewpoints on ethical dilemmas

Don’t miss it!

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Last week on Compliance Culture

Check out last week’s posts on Compliance Culture, in case you missed or want to revisit them.

Many thanks for reading!

READ MORE

Corporate compliance and “the arc of the moral universe”

It is one of the most frequently-used and beloved quotes for champions of progressive values: “The arc of the moral universe is long, but it bends toward justice.” This famous line from Dr. Martin Luther King espouses a certain determinism, from nature or faith, that morality favors fairness and the truth in the end, even if it takes a long time and a lot of effort to get there.

Perhaps further motivation behind these words can be sussed out by understanding the original lines by which Dr. King’s statement was inspired. The older quote comes from Theodore Parker, a 19th century minister and abolitionist. He stated, in full: “I do not pretend to understand the moral universe; the arc is a long one, my eye reaches but little ways; I cannot calculate the curve and complete the figure by the experience of sight; I can divine it by conscience. And from what I see I am sure it bends toward justice.”

Parker was also a Transcendentalist scholar who wrote prolifically on the subject of justice and the conscience, and the sanctity of the rights of all people in the service of those virtues. In Parker’s view, then, justice can be elusive or disappointing, but it is unequivocally a moral force, and progress toward it, however slow and halting, is a high state of being for people and governments. In light of Parker’s remark, Dr. King’s words indicate that individuals alone cannot be definitively satisfied that society will become universally just, but this should not dissuade them from their commitments to their ideals or their personal responsibilities to uphold them, in both private and public.

However reachable this sentiment may seem to be (or not be) over history and in practice, this idea can still provide inspiration to those wishing to positively impact the journey toward a just society. Individuals, for example, may take this concept as a reinforcement of personal conviction, the kind which is passed down over generations in pursuit of an ideal. Organizations such as political action committees, community groups, or charitable organizations may see as a direct call to diligent and persistent public activism with the goal of societal change, often enforced by legal action.

But what about corporations? The concept of the corporation as a legal “person” is always controversial in contemporary society because it conveys rights and protections on companies that many feel should be limited to natural persons only. However, with this designation comes responsibilities and obligations also, and not just ones that may be important in a courtroom. Corporations can do their own part to positively impact progressive toward justice by adopting business values that elevate morality and encourage organizational and employee commitments to integrity and fairness.

  • Social responsibility sells: As companies compete in the ever-crowded global marketplace, price and product are far from the only deciding factors between success and failure with consumers. Companies are now putting their social responsibility interests at the forefront. This shows up in their business values that they communicate to their employees as well as their advertising, corporate branding, and strategy that they bring to the market and identify themselves with to their customers. Consumers want strong personal associations with companies when they have many choices for retailers or service providers. Embracing social responsibility and commitment to progress, inside and outside of organizations, gives corporations a competitive edge and a striking identity that helps them to stand out and be remembered.
  • Representation is key: It is well known that the workplace has much improvement to do before it starts to even appear as diverse as society is outside of the office. Representation at all employee levels, from starters to executive boards, is important in the efforts toward inclusion. In order to aspire for equality and diversity, people of all backgrounds need to first be present and practically included. Then the real effort for change can happen, where this truly representative group can start to work together toward the integrated, equitable type of collaboration and open access that is still lacking from many broader communities and discussions in the world in general.
  • …but tokenism is toxic: In order to support this ambition, however, obstacles must truly be removed, and merit and performance have to be the standards by which people are promoted and co-working is established. Representation in name only, or to fulfil an appearance, is empty and non-progressive. Companies must commit against token inclusion and truly seek to integrate and cooperate authentically. Only then can responsible corporate citizens inspire in the world the changes they see in themselves.
  • Transparency fosters a more equitable working environment: As the saying goes, sunlight is the best disinfectant. Open processes at a corporation will lean more easily toward equitable outcomes for employees and consumers. Unethical management decisions are easier to take and justify if they are concealed and never need to be explained. Having to reconcile the interests and feedback of others, however, helps toward mitigating unfairness. There will always be some amount of bold intolerance or exclusion, just as there will always be a few bad apples. However, it’s much more productive to focus on the decision-making that can be nudged toward a positive viewpoint and those people who will do good things when they are appropriately informed and supported to do so.
  • Integrity promotes sustainability: Sustainability – not the type that encourages re-using recycled coffee cups or only printing documents if it’s really necessary, but the type that focuses on longevity and sensibility of business practices and relationships – is, like social responsibility, a key competitive advantage. Integrity as a main business strategy shows that organizations value their relationships and want to make the right decisions not just for their profit, but for their partners and the future. In this sense, a strong moral code for business values represents both an investment in the aims of justice as well as a preparation for success.

For further contemplation on the concept of the moral universe and its predisposition to justice, and the nature of humans within this, amidst the challenges of the secular world and the frustrations of the individual, Theodore Parker’s “Of Justice and The Conscience” from his Ten Sermons of Religion is a powerful and interesting text.

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Round-up on higher education compliance

Many of the challenges of modern society in general are writ large in the world of higher education. The obstacles to ethical decision-making that are prevalent for individuals and organizations in business are also present in the educational environment. Campus culture often represents a microcosm of culture at large, with many complex social dynamics playing out in close quarters. Students as well as educators and administrators are confronted by complicated moral dilemmas as generational divides and differing expectations for justice, integrity, and duty of care coexist.

  • In taking the administrative decision to close a popular but controversial student dormitory, the Massachusetts Institute of Technology stepped into the thorny issue of informed consent. In order to support their choice to deaccession “Senior House” as a student housing, MIT used data from student surveys that were supposed to be anonymous (but were actually tagged with geolocation information) to collect evidence that the dormitory was the source of high drug usage, low graduation rates, and other behavior deemed unsafe or unacceptable by the Chancellor’s Office. This methodology of gathering data from students and their organizations without explicit expression of the purpose and its intended usage, and the questionable decision-making that stems from it, bring into question the ethics of universities’ relations with the students for whom they are supposedly providing a supportive and inclusive community. The closure of Senior House by MIT is seen as part of a trend of university administrations to exact more control over students’ lives, including conduct they may expect to be unrelated to their educational relationship with their school, such as things that happen off-campus, when school is out of session, or even online:  A Weird MIT Dorm Dies, and a Crisis Blooms at Colleges
  • Given the insular culture that many university academic departments are known for cultivating – focused on competition and comparison and often resulting in isolation and highly politicized decision-making – hostile working environments can quickly emerge on interpersonal levels. Unlike most at-will employees in the job market at large, however, many experienced professors have security of tenure and therefore their interactions with colleagues are not always checked by their fear of reprisal that could lead to losing their jobs. In some situations this can create workplaces that value and promote individuals for their academic prowess but turn a blind eye to claims of troubling personal behavior with colleagues or even students. Universities are often accused of failing to adequately investigate these allegations or not even providing a sufficient framework for safe and effective reporting. Hierarchical departments allow powerful, tenured professors to exploit their positions, with addressing toxic behavior taking a backseat to protecting those reporting harassment:  She Was a Rising Star at a Major University. Then a Lecherous Professor Made Her Life Hell.
  • “Call-out culture” – in which people, often in groups, point out statements or actions of others that they see as problematic or abusive and take down the person in question – has been fed by the public’s appetite for controversy and the prevalence of the internet and social media, where otherwise innocuous events between friends can be broadcast all over the world for commentary, criticism, and ridicule. While understandably some of the intent of call-out culture is to suggest and reinforce more positive, informed standards for interactions in a more inclusive society, this often goes too far. Far from just being restricted to taking down those who act with the intent to cause offense, or educating those who are unaware of the real implications of things they do and say involuntarily or too casually, this culture has fostered an environment where innocent behavior is subject to ridicule and derision. In the university setting, this fear of group criticism is very destructive to creation of community. Being unable to have dialog in the classrooms and student centers of universities has a major chilling effect on sharing of views and open learning:  The Destructiveness of Call-Out Culture on Campus
  • The call-out culture trend described above between students also exists on campuses between professors and other academics. Instead of playing out on social media, this dynamic takes place from editorial boards and academics who read papers in journals, or even just commentaries on papers in journals, and then pile on to criticize the author’s intent. Leaving aside the merit of any arguments made among these groups, the dynamic is the same, of stifling dialog and using groupthink to determine which expression is acceptable or even legitimate. Often this criticism is not very informed and even extends to having the outright intent of policing which and whose ideas are considered worthy of engaging with and debating about:  Academe’s Poisonous Call-Out Culture 
  • Another impact of social media and the internet on the classroom has been the rise of the “teacher influencer” – educators who are given free educational software or equipment, and even sometimes paid in addition, to use for their students in exchange for making posts online or giving talks about the products. These teachers can argue convincingly that their students benefit from access to these products, and that their business arrangements are taken on with the sole objective of benefiting their students in a time when school supplies and improvements are vastly underprovided and underfunded.   However, the standards for disclosure of these arrangements and the handling of the potential conflicts of interest that can arise even from the most innocent, helpful intentions are uncharted ethical territory:  Silicon Valley Courts Brand-Name Teachers, Raising Ethics Issues

In many ways the academic setting, for secondary education as well as at the university level, can be seen as an incubator for these social disruptions that occur in every area of contemporary life. Educational institutions are struggling with cultural changes that redefine the responsibilities in and limits of authority. Issues of consent, safety, cultural values, and conflicts of interest all prompt compelling compliance dilemmas in the higher education domain.

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