When you hire a philosopher as your ethicist, you are getting a unicorn
If a tree falls on a philosopher in a forest and there is no one around to hear it, does she make a sound? Probably not, because she is undercover.
Philosophers are working in business and are applying their disciplined thinking processes to complex commercial and ethical problems – but you won’t find them listed on the organisational chart as philosopher-in-chief and seldom as the designated “ethicist”.
“We are unicorns, we are a bit rare”, says business ethicist and philosopher, Dr Petrina Coventry, who says she has spent her career being called something else.
“I’ve always hidden behind the HR brand because it is easier for people to cope with”, she explains. “If it takes pretending to be a pony to get the message across – so be it. We leave our horns at the door.”
Ethics officers bring a philosophical approach to thinking, decision making, strategy, branding, and communications. They work with all functions (marketing, legal, human resources, finance and others) to find the right way to do business.
“They are not compliance officers and they are not lawyers”, she says. They may carry business cards that announce them as chiefs of staff, people and performance or, occasionally chief operating officer.
Coventry says ethicists operating under other descriptors are trying to not “frighten the horses”.
“Going out and proud and saying you are a chief ethics offer will not get you very far”, says Coventry, a senior partner at Singapore based private equity company COI Capital and non-executive director of Beston Global Goods. She is also an industry professor and director of development at the University of Adelaide.
“People are frightened of the word [ethics]. They think you are making moral judgements about their character, that you are analysing them into ‘good’ or ‘bad’ based on their character, decision making or what they represent. And so, I try to avoid using the word ‘ethics’ if I can, because you can over use it and people just switch off.
“I don’t care what [title] I have to hide behind, whether it is ombuds or human resources. If it is not frightening, yet it helps them be a better person, be less stressed, be better thinkers … they are intrigued and they want more.” – Petrina Coventry
While being a company “ethicist” can be challenging to others, Philosophy has its own battle for acceptance in the corporate world.
Coventry, who has a doctorate in philosophy, says there is some suspicion in business circles that the discipline is esoteric, despite some of the world’s most successful executives and entrepreneurs having studied for philosophy degrees.
These people include activist investor Carl Icahn, hedge fund manager George Soros, former Time Warner CEO Gerald Levin, PayPal co-founder Peter Thiel, LinkedIn cofounder Reid Hoffman, and Flickr cofounder and Slack CEO Stewart Butterfield. Not too flaky then.
Given the predominance of Silicon Valley CEOs on that list, it is perhaps unsurprising that technology companies are at the forefront of embracing ethicists (outside of the research, medical, and pharmaceutical sectors, which have a long history with ethics committees).
At this stage, most of the ethicists in tech have backgrounds in other areas, such as computer science (like former Google in-house design ethicist, Tristan Harris).
Coventry sees the beginning of a shift towards ethics, and away from compliance. She says:
“Compliance is cure, ethics is prevention.”
“It is a bit like having a doctor in-house rather than having to cart everybody off to the hospital because we forgot to go to the doctor.”
Outside of Silicon Valley, CEOs and their organisations are increasingly interested in acquiring more ethics expertise, especially now that scandals and failures now appear so frequent they may still shock, but no longer surprise.
“Stakeholder expectations have changed in the last ten years, partly due to increased transparency around corporate actions, but also due to the corresponding decline in trust regarding corporations and their leaders”, says Coventry, who has worked at executive level in “HR” at Santos, General Electric, and the Coca Cola Company.
Her first ethics role was in the 1990s, when she headed GE’s “ombuds” area in Asia, dealing with breaches in compliance and policy and workplace issues.
“The ombuds person is called on to mediate, negotiate, analyse problems that occur, and provide wise counsel and judgement, which is really what ethicists do”, she says.
In a world where the rules are constantly changing, situations are often unclear and legislation is unable to keep up with advances in science and technology, people have to make their own judgement calls about what is the right thing to do.
This has generated an interest in people who have an arts or philosophy background and can help develop better leaders and companies, she says.
“They are seeking a less emotional, less stressful, more thoughtful, more mindful, more sustainable approach, culture and leadership – and philosophy is born out of that.”
The Ethics Alliance brings different sectors of business together to discuss topics of importance.
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BY Matthew Beard
Matt is a moral philosopher with a background in applied and military ethics. In 2016, Matt won the Australasian Association of Philosophy prize for media engagement. Formerly a fellow at The Ethics Centre, Matt is currently host on ABC’s Short & Curly podcast and the Vincent Fairfax Fellowship Program Director.
Are diversity and inclusion the bedrock of a sound culture?
We need to think about diversity in the workplace beyond gender, argues Alison Woolsey, Director of Diversity & Inclusion at Clayton Utz, a member of The Ethics Alliance.
In December 2017, Chartered Accountants Australia NZ, The Ethics Centre, Governance Institute of Australia, and Institute of Internal Auditors released a publication titled Managing Culture – A good practice guide.
Inspired by the discussion, I wondered how important the link between diversity and inclusion (“D&I”) and a sound culture in which ethical decision making is a given? Being able to point to clear evidence of a link could only advance the case for D&I in our organisations and help address any resistance to change.
A lot has changed in the Australian market. In spite of, and perhaps because of, the Hayne Royal Commission and its fallout, the connection is worth exploring. It’s a topic that has been investigated by others in the past – certainly with a gender diversity focus. For example:
- Professor Robert Wood of the University of Melbourne’s Centre for Ethical Leadership, summarised several articles and studies linking more women on boards and in senior management with improved risk management and corporate governance
- The above paper references a study which found Fortune 500 companies with a higher percentage of women on their board of directors were more likely to be on Ethisphere Institute’s list of the World’s Most Ethical Companies.
- ‘The Lehman Sisters Hypothesis’, a study that concludes empirical literature backs the claim “more gender diversity in finance, and particularly at the top would help to reduce some of the behavioural drivers behind the crises”.
A little less on point, but worth noting as it often comes up in gender diversity discussions, is John Gerzema and Michael D’Antonio’s 2013 book, The Athena Doctrine: How Women (and the Men Who Think Like Them) Will Rule the Future. It offered a global survey of 64,000 people and revealed that two thirds felt the “world would be a better place if men thought more like women”.
What I would like to focus on here, however, are two key and interrelated theses around diversity and inclusion and their role in driving workplace culture:
- Diverse teams drive better decision making.
- Inclusive workplaces inspire better team performance (as well as employee satisfaction, success and security).
If these theses hold true (and I consider each in more detail below), the unavoidable conclusion could be that D&I helps shape an organisation’s culture for the better, and will be increasingly valued – and even demanded – by boards and investors as corporate governance rules are strengthened and companies’ social licences to operate come under increased scrutiny.
Diversity is a trigger for better decision making
Much is written about the “value of diverse teams” and “diversity of thinking”. Many leaders and organisations use the expressions liberally when promoting their diversity policies. But do we really understand what these expressions mean?
In her book, Which Two Heads Are Better Than One, Australian author Juliet Bourke acknowledges the collective intelligence that diverse teams can offer, but debunks any theory that it’s easy to achieve through simple gender balance and diversity of background.
Bourke introduces several enablers of diversity of thinking. These include the composition of any group and the process they use to think and debate. Gender balance in a group, she says, “promotes psychological safety and more conversational turn-taking, thereby encouraging people to speak up, offer their views, and elaborate on the ideas of others”. Racial diversity “triggers curiosity, causing people to ask more questions, make fewer assumptions, listen more closely, and process information more deeply”. Age and geographic location also play a role.
In addition to this, we need to consider more direct factors – firstly, diversity of approach to problem solving. Bourke identifies six key individual approaches to problem solving but notes we tend to focus on two in particular. She says that by deliberately taking a more balanced approach, groups report they reduced blind spots and “were able to develop more robust solution” and moreover “followers report greater faith in the ultimate solution”.
The second direct influence on diversity of thinking comes from the mix of functional roles such as general counsel, chief risk officer, and chief HR officer. These executive positions expose members to different domains of knowledge and social networks, Bourke says.
This theory challenges the simplicity of the proposition that having women in a group mitigates risk. Australian academic Cordelia Fine similarly dismisses the existence of any gender gap in risk taking in her 2016 book, Testosterone Rex. So too does Elizabeth Sheedy, who concludes in a 2017 study that senior female bankers don’t conform to stereotypes and are just as ready to take risks.
This rich research linking gender diversity and improved business performance suggests organisations also need to consider a wider range of diversity forms beyond women to men ratios. When you begin to grasp the complexity of optimal diversity, you begin to realise the opportunities and value that teams can deliver or destroy.
Inclusion and workplace performance
Achieving the ideal diversity mix in any group is no mean feat. However, a group can still underperform if its members do not feel included.
According to the Diversity Council of Australia, inclusion occurs when a mix of people are respected, connected, progressing, and contributing to organisational success. Deloitte’s HR research body, Bersin, shows organisations with inclusive cultures are six times more likely to be innovative, anticipate change, and respond effectively, and twice as likely to meet or exceed financial targets.
We see evidence that inclusion is associated with being treated fairly and respectfully, being valued for one’s uniqueness and sensing group belonging. The Deloitte Inclusion Maturity Model identifies the highest level of inclusion as being when people report feeling both psychologically safe and inspired to do their best work. At a more granular level, this is about people feeling (or leaders encouraging people to feel) they can contribute in a meeting, have a voice in decisions affecting them, and can disagree or challenge group decisions.
Leaders are instrumental in creating a culture of inclusion. Diversity commentators and practitioners largely agree on a common set of leadership capabilities including being collaborative, accountable, open and curious, a champion of diversity, and relational. A big piece in the discussion on inclusive leadership is the importance of counteracting biases and assumptions in decision making. In recent years, not only have we seen a growing level of awareness of unconscious biases but also a push to explore practical ways (policies, processes and structures) to mitigate against them.
Positive traits of an inclusive leader include being particularly mindful of personal and cultural biases like confirmation bias and groupthink. Juliet Bourke also highlights the importance of leaders being cognisant of the situations and factors such as time pressures and fatigue which can cause them to be vulnerable to such biases.
As several authors have argued, there was potential for diversity of thinking and good decision making in the Enron board, but the decisions “concerned matters of high complexity, difficulty and moral uncertainty” and ultimately it succumbed to groupthink, says Bourke.
Does diversity and inclusion lead to sound culture?
If we have ideal diversity in a team and have cultivated inclusion through good leadership, does a sound organisational culture necessarily follow?
Logically, yes. We’ve canvassed positive outcomes such as good decision making, effective team work, psychological safety, and innovation. We’ve considered the impact of leaders being more open and curious, conscious of biases, and accountable. In both the Managing Culture paper and APRA’s report on the Commonwealth Bank, we see references to the need for improved behaviours of boards and senior leadership along the lines of these themes. If D&I doesn’t at least influence ethical behaviour or underpin the concept of an ethical framework, it would be easy to argue inclusive leadership can facilitate embedding an ethical framework.
McKinsey in its 2018 update suggests that, for many companies, D&I is a “matter of license to operate”. This is a theme at the heart of proposed changes to the ASX Corporate Governance Council’s Principles and Recommendations. In a substantial redraft of principle 3, the current words of “act ethically and responsibly” become “instil and continually reinforce a culture across the organisation of acting lawfully, ethically and in a socially responsible manner”. The ASX says that “preserving an entity’s social licence to operate requires the board and management of a listed entity to have regard to the views and interests of a broader range of stakeholders than just its security holders, including employees”. It goes on to suggest this may include, by way of example, “offering employment to people with disability or from socially disadvantaged groups in society”.
On one view this could be saying good culture drives greater levels of diversity, and not vice versa. What’s interesting though is the earlier editions of the Principles and Recommendations also included diversity under principle 3. It was then relocated in 2014 to Principle 1: “lay solid foundations for management and oversight”. In my view, D&I sits comfortably under both principles – a recognition of it being business critical but also critical for ‘good’ or ‘right’ decisions.
More reflection on the point may be required but I think investors and our regulators should care about what organisations are doing to make D&I a priority in the way they conduct business and as employers. D&I may be an undervalued lever to promote positive change in business behaviours and workplace cultures in Australia. The world’s largest asset manager BlackRock has identified board diversity as a “stewardship priority”. Larry Fink recently wrote in his annual letter to CEOs:
“We also will continue to emphasize the importance of a diverse board. Boards with a diverse mix of genders, ethnicities, career experiences, and ways of thinking have, as a result, a more diverse and aware mindset. They are less likely to succumb to groupthink or miss new threats to a company’s business model. And they are better able to identify opportunities that promote long-term growth.” – Larry Fink
It makes sense to continue to make the case for diversity and inclusion as being a driver of positive change – for business, and for the community.
Alison Woolsey is director of Diversity & Inclusion at Clayton Utz, a member of The Ethics Alliance.
This article was originally written for The Ethics Alliance. Find out more about this corporate membership program. Already a member? Log in to the membership portal for more content and tools here.
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BY The Ethics Centre
The Ethics Centre is a not-for-profit organisation developing innovative programs, services and experiences, designed to bring ethics to the centre of professional and personal life.
Why do good people do bad things?
Why do good people do bad things? When we know someone to be a fine and moral person in other respects, we are flabbergasted when they get caught for dodging their taxes, fiddling their expenses, or abusing their positions of power.
Social psychologist Daniel Effron says traditional assumptions about why good people transgress are “naive”.
We may think they go through a logical progression of weighing the costs and benefits. Can they get away with it? How much can they gain from cheating? How severe is the punishment?
“This is not nuanced enough”, counters Effron.
“In fact, the average person cares a lot about feeling – and appearing – virtuous.”
Rather than asking themselves if they can get away with it, they instead ask if they can do it without feeling like a bad person, says Effron, Associate Professor of Organisational Behaviour at the London Business School.
Effron’s research examines how people act in ethically questionable ways without feeling unethical. He was speaking an Ethics Alliance panel on Embedding Values & Principles in June.
People cheat less than they can get away with
Experiments which involve people rolling a die in private, where no one can see them, find that people cheat (but only a little bit) when they are told the higher the number they roll, the more money they will get.
“They want to get something good for themselves, even if it means being dishonest, but they don’t want to feel like a terrible human being, so they don’t cheat as much as they could”, says Effron.
This finding implies that monitoring an organisation to ensure no one is dishonest can be a very costly and impractical exercise. Netflix, instead, decided to stop policing its expense reports.
Former Netflix chief talent officer Patty McCord explains, “In talking that through with employees, we said we expected them to spend company money frugally, as if it were their own. Eliminating a formal policy and forgoing expense account police shifted responsibility to frontline managers, where it belongs.
“It also reduced costs: Many large companies still use travel agents (and pay their fees) to book trips, as a way to enforce travel policies. They could save money by letting employees book their own trips online”, McCord writes in the Harvard Business Review.
People cheat more if they can maintain a positive self view
Effron says his research shows people look to their moral track records, to spot evidence they are a good person.
If they can point to some good deeds, they feel they have some “moral credentials”, or moral licence, when they engage in “ambiguous behaviours”.
For instance, a study shows that when people express a preference to buy environmentally friendly products (which makes them feel more ethical) they are also more likely to lie, cheat, and steal money from the experimenter.
Effron says this implies it may be effective for organisations to remind people of their ethical commitments. “When people make public commitments, they feel obligated to follow through with them”, he says.
It does not work so well just to emphasise the good things people have done. “If you emphasise ethical achievements, people feel they have ticked the box and they may be more likely to relax their striving for ethical goals.”
People cheat less when ethics are top of mind
People may know where the ethical “line in the sand is” but, as they edge closer, the line fades and, whoops, before they know it, they find themselves on the other side.
“What can we do to stop this ethical fading? Keep ethics top of mind” – Daniel Effron
A study at the London Business School finds people are more honest in filling out forms if they have to sign at the top that everything they are about to say is true, rather than signing at the bottom that everything they just said is true.
This is because they have been prompted to think about ethics before they give their answers, rather than afterwards.
This suggests organisations should routinely discuss ethics in decision making, with reminders in the workplace to keep ethics top of mind.
People may admit the deed, but not the motivation
The executive director of Corruption Prevention at the Independent Commission Against Corruption (ICAC) Lewis Rangott, says people rarely see themselves as immoral.
Very few people will admit they have been “the bad guy”, says Rangott, speaking at the Ethics Alliance event in Sydney.
“We will put them in the box, they will have to swear on the Bible and we will show them the evidence of them engaging in criminal behaviour – like a film or video – and eventually, they will admit to the deed, but very rarely will they admit to the corrupt intent. They always have a little excuse for themselves”, says Rangott.
“Giving yourself this little mental permission slip, even for the very serious stuff, seems to have something in common with regular dishonesty and also very serious misconduct and white collar crime.”
Rangott says that while the threat of an ICAC investigation may be a useful tactic to keep people honest, fear is the wrong motivation for the right behaviour. People should be intrinsically motivated to do the right thing.
Organisations can use workplace stories to encourage honesty and integrity. When someone gets fired for bullying, or the CEO thanks a whistleblower in public, that gives people the right role-modelling.
“A nice cheap and easy way to get ethics in your organisation is, without faking it, get some of these stories going in your organisation. Something people will talk about in the pub is where the real embedding happens”, says Rangott.
However, all the time, money and effort spent on embedding values gets sucked down the drain as soon as a “jerk” gets promoted. “You have to be careful who you promote. People are so good at spotting the tiniest bit of hypocrisy.”
This article was originally written for The Ethics Alliance. Find out more about this corporate membership program. Already a member? Log in to the membership portal for more content and tools here.
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BY Daniel Effron
Daniel Effron is Social Psychologist and associate professor of Organisational Behaviour at London Business School.
