The Ethics Deficit

A progressive Canadian university recently approached me for input on a proposed certificate program in ethics education. I was glad to provide my two-cents worth. This is an area of increasing concern, even alarm, in business and public life.

The scandals that have rocked Wall Street, the Church, and Governments have been front-page news for the past few years, undermining confidence in leadership and reinforcing bitterness and cynicism about our institutions. I believe universities have an important role to play-along with business and other institutions – in building a proper foundation for ethical conduct.

There is a growing concern by many who value principled governance: how do leaders and institutions prepare themselves to use power ethically?

Perhaps, it is a questionable assumption that we still know what it is to be ethical? The world is growing more complex and our challenges entangled. As a society, we appear to have lost our moral compass: just look at Enron, Worldcom, Anderson, AIG, Bear Stearns, Livent, Societe General and Freddie Mac, to name a few. Ethical lapses were largely responsible for the recent meltdown of the economy.


I believe five deficits contribute to the decline of ethical practice in civil society and more specifically, organizational culture:

  • the deficit of reflective practice;
  • the deficit of character development;
  • the deficit of respect;
  • the deficit of the right use of power;
  • the deficit of mentoring.


1. The Deficit of Reflective Practice

The pace of organizational life is fast and getting faster. The pressure for quarterly returns has undermined long-term thinking in many major corporations. As a result, there is a significant imbalance between reflection and action in most of the organizations that I have worked with over the past 25 years. Further, the value placed on action far outweighs critical thinking. Often, my work in organizational change and renewal has come as a result of this imbalance and the consequences that ensue from inevitable breakdowns that result from such behavior.

This pattern poses a significant risk. Strategic decisions are being made on the fly divorced from an examination of the issues involved, including ethical considerations. While there have been significant inroads made in governance and risk management, especially in the last decade, much damage has resulted from expediency.

Ethics is an arm of wisdom. If we want our leaders to be wise, we must not only equip them with the skills and practices that support wisdom but also educate the community at large about the benefits of this kind of education and practice.

Interestingly enough, lawyers for Garth Drabinsky and Myron Gottlieb, the Livent executives convicted of fraud and forgery, argued that they should be sentenced to educating business students on the evils of unethical behavior rather than do time. Interesting proposal. Perhaps to them, educating students is the equivalent of “doing time?” You can imagine what the judge thought of that suggestion.


2. The Deficit of Character Development

Leadership is never easy. It is an initiation into character and courage because it requires ordinary people to take on extraordinary responsibilities. It is a mark of character to be a trustworthy leader in a world where mistrust is now the norm and integrity appears conditional to many.

Character is formed through the allegiance to a code of moral and ethical conduct. Integrity is the adherence to that code, no matter the circumstance. It takes a good deal of courage to stand by core beliefs, especially when others are unable or unwilling.

The tests of character come in the form of temptations, seductions and challenges. For some, these are mundane — fudging on taxes, ignoring a struggling colleague, turning a blind eye to bullying in the workplace.

Those called to take on world issues face even greater tests of courage and character. Stories are plentiful of the best and brightest, unable to resist the allure of money, sex and power, and fall through flawed judgment. Bernie Madoff is one current example.

Our society currently rewards and develops talent. Less recognition and resources are being afforded to character development. Ethical behavior requires both.

Great talent, like all power, comes with obligations. The greater the size of the talent and ability, the more important it is that ethics and integrity act to provide balance, anchor and guide. When talent is not balanced by character — arrogance, conceit, and entitlement lead to the abuse of power.

It would be wonderful if business reporting in the media could include stories of conflicts, dilemmas and issues handled ethically. We see so much of the “shadow,” it would be a refreshing change of pace to have equal focus placed on how good choices are also being made to address ethical dilemmas.

Profiling thought leaders and public figures that make difficult ethical decisions with courage and integrity, provides inspirational role modeling and a counterbalance to the extensive coverage provided by the media to ethical lapses and breakdowns.

Learning how these individuals or groups managed to do “the right thing” helps us to understand how to make ethical choices in contemporary situations. Eventually, the Nobel Prize committee might consider awarding an Ethics Prize annually for exemplary ethical leadership to significant figures on the global stage. It opens a possibility that ethics and success are not mutually exclusive.


3. The Deficit of Respect

The third condition of concern is the erosion of respect in the workplace. This is a chronic contributor to ethical violations and conflict. In over 200 conflicts that I have been hired to mediate, the core issues usually include some form of abusive behavior. Economic downturns turn up the heat on such violations.

Verbal threats, sexual harassment, bullying and intimidation, racism, and sexism are common conditions in too many workplaces. Thousands of workers are assaulted and thousands more are murdered every year, according to a U.S. government agency. Employer, property and commercial-directed violence have increased exponentially. Shocking.

Respect for stakeholders is another area that has been under assault. Shareholders, consumers, taxpayers and the community deserve better than they have been getting from some government and business leaders whose election plan or pay packet appears to be the top priority.

Of course, organizational behavior mirrors what is happening in society. While headway has been made in our conceptual understanding of respect, the practices associated with this ethical behavior appear to be in decline.

While theoretical constructs are an important means of setting historical and intellectual context for ethics, my chief concern is what we are doing now. For instance, bullying in the workplace is common. Organizational codes of conduct that provide guidance on how to intervene in such situations, even if the bully is a superior, takes the issue to another level of efficacy.

Ethical treatment is a fundamental human right.


4. The Deficit of The Right Use of Power

There are three kinds of power that leaders work within organizational life: the power of position, the power of communication and the power funded by one’s gifts, talents, character, knowledge, experience and resourcefulness, or personal power.

Exercising power to motivate, inspire and lead others to achieve personal and collective goals is a major contribution to organizational effectiveness and productivity. The abuse of power leads to demoralization, attrition, employee absence, occupational health and safety issues and litigation. It costs a lot of money when productivity is impaired in this way.

Power avoidance is the flip side of the coin. Two ethical dynamics are at play here: the avoidance of power and making difficult choices; and the unwillingness to step up to power for the benefit of others.

This topic is especially significant at this time. Warrant-less wiretapping, detention and torture, government surveillance, “Patriot Acts,” government secrecy, political spying, watch lists, war measures detentions, and government censorship are just some of the high profile ethical issues that concern western society.

Providing leaders with a basic understanding of the positive and ill effects of using and abusing power and helping them come to terms with their own relationship to power would be a significant contribution to ethics education. Undergraduate and graduate education is one way of helping leaders learn to use power for the right reasons and in the right ways. Making ethics education a mandatory part of organizational executive development programs is another.


5. The Deficit of Mentoring

Mentoring is a long-term relationship that seeks to ensure that wisdom is passed from generation to generation. Many indigenous cultures teach ethics through mentoring. One means of doing this is story telling, where traditional knowledge about right-relationship is passed down to younger generations.

The other means is through initiation practices, which test character, critical thinking skills, resourcefulness and decision-making under “controlled conditions.” How one responds to these tests reveals the work that has been done to develop character and talent, and the work there is left to do. That learning curve becomes the focus of both formal and informal training and development. Sadly, the military appears to be one of the last organizations to make use of this form of leadership development.

Mentoring has not been used to the effect that it could and should be to teach ethical leadership. The focus has been on technical performance (coaching) rather than the overall development of the person (mentoring). I believe that this gap has contributed to the decline of ethical leadership in business, community and institutional life.



Our universities, businesses and institutions have a significant opportunity to mentor tomorrow’s leaders. Two questions become equally important in this regard. The first is: “What do we need to know in order to be ethical?” The second is: “Who do we need to be?”

Ultimately, it is not enough to know what is right. We must do it.

Posted on May 30, 2013 and filed under 2013.