“the Bad Man”

Ethics Over Compliance: The Dutch Banker’s Oath

/ Jack Marshall / 7 Comments

bankers oath

“Professional ethics” is a never-ending battle between compliance and ethics, between rules and penalties on one side, and principles and values on the other. Compliance is easier: all you do is tell people with rules and regulations what they must or can’t do, and promise that there will be consequences if those rules are violated. For ethics to work, people actually have to understand ethical values and be committed to living by them in a professional context.

Compliance has little to do with ethics. Jack the Ripper will follow rules if they are clear, if he knows he’ll get caught if he violates them, and if the punishment when he does will be  harsh enough. That won’t make him ethical. In fact, compliance–rules-based professional conduct control—is often antithetical to ethics. Rules and laws are merely a challenge to the type that Oliver Wendell Holmes called “The Bad Man”-–which includes bad women—to find ways to do things that are wrong but that avoid violating rules sufficiently to justify punishment.  This is why most compliance codes have language in their introductions noting that it’s impossible to make a code that will cover every wrong someone can think of, so ethics are important too.

Pure compliance-based systems don’t improve ethical conduct. The financial collapse in 2008 was largely caused by financial manipulators operating in the grey areas of the rules and laws—that’s why so few of them could be prosecuted. In politics, The compliance mindset is extremely convenient for clever liars and cheats like the Clintons, which is why Hillary could try to explain her e-mail shenanigans by saying that “I fully complied with every rule I was governed by (heh-heh-heh!).” Unethical people will always find ways to get around rules. Ethical people, in contrast, barely need rules at all.

Another benefit of ethics over compliance is that ethics rules–compliance codes—have to be long and detailed, otherwise it’s too easy for Clinton-types to find loopholes, though they usually will find some anyway. Ethical values, on the other hand, can be stated very simply. An ethical employer thinks, “Hmm, that intern is cute, but I am married and have duties of loyalty and honesty to my wife and family, and it would be an abuse of power and influence as well as irresponsible for me as a leader to have an affair with someone under my supervision in the organization.” The Bad Man thinks, “Wow, she’s hot; my wife won’t care as long as I’m not caught; getting a hummer isn’t considered sex where I come from, and there’s nothing that says a President can’t fool around!” For the former, “A leader should not have sex with subordinates” is clear as a bell; his values tell him why. The latter, though, is thinking, “Hmmm. How can I get around this? That rule says “should” but not “shall”— that’s good. No punishment is specified. Sounds like more of a guideline than a rule. “Sex”—that must mean sexual intercourse: great! Lots of wiggle room there. And “subordinate”—is an intern really a subordinate? And I bet I could argue that this is personal, not official conduct. All good…now where’s that cigar?“

Invoking ethics rather than compliance is a new oath required by the Dutch Bankers Association. It could be printed on a postcard, and if a banker is ethical, it is all he or she needs:

I swear within the boundaries of the position that I hold in the banking sector…

…that I will perform my duties with integrity and care;

…that I will carefully balance all the interests involved in the enterprise, namely those of customers, shareholders, employees and the society in which the bank operates;

…that in this balancing, I will put the interests of the customer first;

…that I will behave in accordance with the laws, regulations and codes of conduct that apply to me;

…that I will keep the secrets entrusted to me;

…that I will make no misuse of my banking knowledge;

…that I will be open and transparent, and am aware of my responsibility to society;

…that I will endeavor to maintain and promote confidence in the banking system.

So truly help me God.

And if a banker isn’t ethical,

it won’t matter anyway.

__________________________

Pointer: Legal Ethics Forum

Sources: Bloomberg, The Conglomerate

Graphic: Bloomberg

Workplace Ethics: 62 Things That Are Legal, But 22 Of Them Are Unethical

/ Jack Marshall / 9 Comments
"Oh, sure, he's hell to work for, but he never breaks any laws, so you'll be fine."

“Oh, sure, he’s hell to work for, but he never breaks any laws, so you’ll be fine.”

I have been remiss in not adding the terrific blog Evil HR Lady to the Ethics Alarms links, and will finally do so as soon as I post this entry. No profession deal s with ethical nuances and dilemmas more frequently than human resources professionals, and they can be very difficult, even gut-wrenching. In a recent post, EHRL searched through the archives of questions she has answered over the past years, and compiled an eye-opening list, especially for non-lawyers, of the conduct employers could engage in legally, which is to say, get away with and not be successfully sued, to employees, together with some questionable kinds of conduct that are legal for employees to do to each other.

She listed 62 of them, many of which are reasonable ( it’s okay to fire an employee for “being a jerk”) and some are obvious, or should be;  it is legal to quote the Bible in the office, for example. What is legal is not always good, fair, or right, however, and I perused the list with an eye out for legal workplace conduct that was legal but still unethical. About a third of the types of conduct on the Evil HR Lady’s list made mine. What follows is the sub-list of the 62 things it is legal to do at work, the 22 things it may be legal to do at work, but which are still unethical. The reasons for my unethical verdict follow Evil HR Lady’s items.

Here’s the list of the unethical 22 workplace practices: Continue reading →

Unethical and Unfair Advertising With No Laws or Rules Against It…So That Makes It OK, Right?

/ Jack Marshall / 4 Comments

Justice Holmes warned about people like this.

From Wisconsin we have a perfect example of how new technology creates opportunities for the unethical to find new ways to exploit it, uninhibited by either basic fairness or formal ethics rules that were written before the technology was available.

The Wisconsin law firm Cannon & Dunphy purchased the names of the two named partners of their biggest competitor in personal injury law, the firm Habush, Habush & Rottier, for a sponsored link, meaning that  every search for “Habush” or “Rottier” produces an ad for Cannon & Dunphy at the top of all the search results.  incensed that their names were being used to promote their competitor, Robert L. Habush and Daniel A. Rottier sued, alleging a breach of privacy and a misuse of their publicity rights. Milwaukee County Circuit Judge Charles Kahn Jr. rejected the suit, holding that purchasing a competitor’s name as an advertising key word on the Internet is reasonable commercial use. Continue reading →

Proof That Republicans Are Led By “The Bad Man”

/ Jack Marshall / 9 Comments

If there is a Republican out there who does not want to hang his or her head in shame after reading this story, 1) I want to know why, and 2) don’t vote for this individual, no matter whom they are running against., or for what.

For this is the mark of the constitutionally unethical, the same warped comprehension of right and wrong that allows Goldman Sachs executives testify before the Senate, under oath, that they see “nothing wrong with” and have “”no regrets” about selling products to clients that they knew were terrible investments. It represents the credo of  Oliver Wendell Holmes’ famous “Bad Man,” whom he described in his speech, “The Path of the Law,” a citizen whose only interest in obeying the law is avoiding penalties, and who can be counted on to lie, cheat and do others harm whenever gaps in the laws permit. And, of course, it typifies the political style of Michael Steele, who, by definition, could never lead an ethical organization, because any organization that will tolerate someone like him must not care about ethics.

Get this: Continue reading →

The Ethics of Unethical Ethics Teachers

/ Jack Marshall / 5 Comments

An essay by lawyers Joel Cohen and Katherine A. Helm begins with this story:

“Noted ethics philosopher and Nobel Laureate Bertrand Russell once was questioned by the Harvard Board of Governors about having an extramarital affair with a student. When faced with the hypocrisy of being an ethics professor engaged in immoral conduct, Russell argued his private affairs had nothing to do with his professional duties. “But you are a Professor of Ethics!” maintained one of the board members. “I was [also] a Professor of Geometry at Cambridge,” Russell rejoined, but “they never asked me why I was not a triangle.”‘

The authors use the anecdote to explore the issue of whether proven ethics miscreants like Eliot Spitzer, Rod Blagojevich and disbarred class action lawyer William Lerach ought to be lecturing, speaking, or otherwise being listened to in regard to their opinions and advice on ethics. After all, acting teachers are often indifferent actors, and the best baseball managers weren’t much as players. Why should ethics be any different?  Continue reading →