Tuesday, July 11, 2006

"There's No Such Thing As Business Ethics"

While there may have been many redeeming qualities about his life, Kenneth Lay will be remembered as the convicted former Chairman of Enron who oversaw the largest deception of regulators, shareholders and employees in the history of business. He experienced a colossal ethical failure that cost him his reputation and the shareholders and employees of Enron millions of dollars. For whatever reason, he began to believe that his business ethics were separate from his personal ethics and that his decisions at work would not affect his life away from the office. Nothing could be further from the truth. Ethics are the moral boundaries that we choose to govern our lives by and our personal and professional credibility is defined by how well we hold to them.

While it’s easy to find fault with Mr. Lay and others who have failed ethically, the reality is that ethical failure is not limited to the rich and powerful. At some point in time, everyone fails ethically. We fail personal ethics tests for at least one of several reasons.

1. We do what’s most convenient.

Most of us fail personal ethics tests because we don’t think we’ll get caught. We tell ourselves “it’s just this one time” or “it’s really not who I am” and we convince ourselves that it’s okay to step outside of the normally accepted rules of doing business.

2. We do what we must to win.

We’ve come to believe that we have two choices. We can win by doing whatever it takes, even if it’s unethical or we can have ethics and lose. Many people believe that embracing ethics would limit their options, their opportunities and their very ability to succeed in business. Few people set out with the desire to be dishonest, but nobody wants to lose.

3. We rationalize our choices with relativism.

Joseph Fletcher was a professor of theology at Harvard University when he coined the term “situational ethics”. Situational ethics might sound appealing until the situation isn’t in your favour. When we begin to function personally or in business using relativism as our moral compass, things can get murky very quickly.

How do you find your way to ethical behaviour?

1. Submit yourself to an external authority.

Choose a moral standard that you will adhere to and stick to it.
The Ten Commandments (Exodus 20)
Rotary 4-way test (
The Golden Rule (

2. Tell others what you do.

Make your standards public. Publicity holds us accountable to ourselves, our customers and those around us.

3. Have a high personal standard.

Don’t compromise on the truth. Don’t take short cuts. Keep your commitments and do what’s right even if it’s unpopular.

4. Have integrity.

Align your priorities with your values. Know the things that matter most in your life and live your life towards them.

5. Confess when you’ve made a mistake.

Everyone makes mistakes. Admit yours quickly and easily. People are forgiving and trusting when we confess and ask for forgiveness.

6. Stand firm when the pressure is on.

Who you are when no one is looking is who you are. Character is defined by what we do, not by what we say we do.


kenny said...

Loved this post. Having just stepped out into full time ministry(raise your own support)and working for an organization that deals with issues that our culture doesn't deem acceptable (New Direction...believes that gays and lesbians can change).I appreciated your points of leading with integrity. Bless you on your own journey.

junah said...

It is funny (I mean sad) that a recent graduate was telling me about the engineering ethics course today; a course I have yet to take. It is very easy to cheat because all the answers are online, so the university monitors IP address to catch cheaters.

Definition of Irony: Cheating on a ethics exam.

Tim said...

Kenny - thanks for checking in. The post is an article that's going into a local business magazine. All the best!

Tim said...

Bill Hybels wrote a book titled "Who You Are When No One is Looking - is who you really are"

Hurts to think about doesn't it...

Interesting observation on the ethics exam...

Danica said...

Nice! You're getting an article in a magazine. Good for you Tim. It was a good read. You write just like you speak. It was almost like listening to one of your sermons.