Compliance Culture

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

Integrity of game play: Unethical leadership by coaches

This is the fifth in a series of five posts on the topic of integrity of game play. The first post in the series was about the negative impact of player misconduct on sportsmanship and game outcomes. The second post pondered whether tanking can ever be ethical and judged numerous examples of the practice in different sports to assess potential morality of these actions. The third post covered referee bias in different sports, analyzing its prevalence or presumptions of it and how this type of bias may relate to overall ethical decision-making and choice theory.  Last week’s post discussed examples of organizational cheating operations by teams.  Today’s post, the fifth and final in the series, will delve into examples of unethical leadership by coaches.

Coaches are some of the most popular, visible, and influential leaders in society. Their tone and conduct can have a ripple effect on the behavior by and achievements of the players and teams they influence. To the public, coaches often provide the institutional identity for the team, expressing their mission and values in the media as well as defining the terms on which the organization wishes to compete and be known. Within team organizations, coaches are the most important people managers, tasked with both developing individuals and demonstrating operational commitment to the team’s strategy for the game, season, and beyond.

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Integrity of game play: Ethics of tanking

Editor’s note: Check back in the coming days for additional content to this post which will feature a deep-dive discussion on the moral code of tanking and the practice’s themes and applications between me, from a compliance and ethics perspective, and my husband, Bill Afonso, from a sports management and strategy perspective.

This is the second in a series of five posts on the topic of integrity of game play.  Last week’s post discussed player misconduct, such as penalty embellishment, like diving and flopping, and equipment cheating.  Today’s post is about the ethics of tanking and will question the morality of the practice across various sports and situations.  Next week’s post, on March 7, will be about how instances of referee bias impact games, players, and teams.  The fourth post, on March 14, will be about institutional cheating by team organizations.  The fifth and final post, on March 21, will be about coaches who have demonstrated unethical leadership practices.

Tanking is loosely defined as relying upon poor performance in order to ensure future benefit or competitive advantage based upon bottom of the table results. Internal decisions within the team organization can be planned and intended for the purpose of gaining future advantage via sustained losses or refraining from employing the most competitive strategies.   This can include roster manipulations such as sitting key players or keeping others in the minor leagues or farm systems, as well as actually instructing players actively in the game to underperform or to pursue strategies they expect to be unsuccessful or unproductive in order to deliberately lose the game(s).

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Martin Shkreli and unethical leadership

“Pharma bro,” financier, and entrepreneur Martin Shkreli is as well-known for his controversial antics on social media and in the press as he is as a biotech CEO. Shkreli gained public attention in 2014 and 2015 for acquiring the rights to market drugs and then hugely raising prices, first at Retrophin with Thiola and next at Turing Pharmaceuticals with Daraprim. In August 2017, Shkreli was found guilty on two counts of securities fraud and one count of conspiracy to commit securities fraud by a jury in New York after standing trial where he was accused of defrauding investors in a Ponzi scheme.

Shkreli gains and sustains attention by modelling reprehensible conduct and immature, immoral behavior. His entire persona is calculated to shock and outrage, promoting a confident attitude in the face of ethical and even legal wrongdoing. The prominence of such a flamboyantly, defiantly negative character presents an affront to the conventions of compliance and ethics in business.

  • Shkreli is far from alone in his controversial and ethically questionable pricing and business practices, though his attention-seeking behaviour and criminal prosecution has kept him in the spotlight. He’s also joining other corporate wrongdoers in his business at exploiting opportunities for profit typical in the pharmaceutical industry, despite their effects later on consumers:  Newly Convicted ‘Pharma Bro’ Martin Shkreli Shined a Light on Pharma’s Biggest Scandals
  • And, despite Shkreli’s preciousness and loud belief that he is a genius, he can also be seen as just another fraudster in a long American tradition of trusting bad people because of a cultural eagerness for innovation and disruption:  There Is Nothing New Under the Sun, Martin Shkreli Edition
  • Emotional intelligence is a popular term in management theory, borrowing ideas from psychology to suggest that leaders who understand their own emotions and those of others, and sensitively incorporate this information into their decision-making and leadership style, are more capable. Typically this is used to inspire positive behaviour like better communications or more sustainable business strategy. Shkreli is a defiant example of the opposite effect, claiming brilliance yet totally disregarding emotional interdependence and the greater good of society. In his mold, ethical behavior and integrity have no relevance to his sense of personal victory:  The Emotional Intelligence of ‘Pharma Bro’ Martin Shkreli
  • Time will tell what the sentencing outcome will be for Shkreli’s recent criminal convictions (many legal commentators think he will receive limited jail time, Shkreli’s defense team has suggested he may serve none at all), but a guilty verdict which would subdue some people has made this famous misbehaver even more boastful:  Martin Shkreli’s lawyers fail to corral bragging ‘pharma bro’ ahead of sentencing
  • Can Shkreli’s legal team convince him that his “people skills” need to be improved to keep him out of prison in the future? Seems unlikely, as his reputation of being bold, odd, and obnoxious gets him attention and keeps him relevant, which seemed to have been appealing to the investors he defrauded, some of whom made money anyway because of side agreements with him. Clearly he sees himself as another peculiar but brilliant business visionary, pointing out the danger in the cult of personality around difficult and immoral leaders who mistreat their employees and partners and use eccentricity as a pretense for selfish, unethical behavior:  Martin Shkreli’s Lawyer: ‘Pharma Bro’ Has an Image Problem

Even through his criminal prosecution, Shkreli seeks and thrives off the attention he gets for acting out in poor taste. He uses moral relativism and the “everyone else is doing it” defense for his unethical and fraudulent behavior, and the profits he gains for himself as the justification.   His financial success should not be admired or enabled by any organization wishing to sustain a business while contributing to a more transparent and responsible society for the future.

Corporate cultures must not reward this type of person with commercial partnerships or philosophical support; while they may make profits, they do so through scheming to deceive and defraud. People like Shkreli are the true rare bad apples that narrow the ethical framework and make the right choices problematic for the otherwise good people they influence.

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