Last year brought big changes, for the business community and for Ethical Systems. First, the business community: For those of us who care about ethics and corporate culture, 2019 was a landmark year. This is because the Business Roundtable officially repudiated its 1997 embrace of shareholder primacy—the doctrine that companies must always put the interests […]
Stop the World—I Want to Get Off. The title of that 1960s musical captures a timeless sentiment, but it seems more common in recent years, and is perhaps especially on the minds of leaders of organizations and their ethics-and-compliance staff. In this era of rising political polarization and social-media fueled speculation, small things can quickly blow […]
Interview with Jonathan Haidt, author of The Righteous Mind and Thomas Cooley Professor of Business Ethics at NYU Stern
What are your main areas of research/work around business ethics?
What I discovered when I moved to NYU-Stern in 2011 is that there’s a lot of great research on behavioral ethics going on at business schools, which I had not known about as a social psychologist studying morality, and which ethics and compliance officers generally didn’t know about. What was needed was a way to gather up all the existing research and make it available and accessible to businesspeople. That’s why I created the first iteration of Ethical Systems back in 2011 – it was originally just a simple website to bring together all the varied worlds of knowledge that one needs before one can try to improve these complicated things called corporations. In 2014 the site was re-launched as the much larger collaborative project that it is today. Through our collaborative approach, we are researching topics where we think business could benefit, such as culture measurement.
In their piece, entitled “Make Business Ethics a Cumulative Science” Haidt and Trevino outline the various factors that have impeded ties between the business and research communities. Some are due to the misalignment between operational models— academics depend on open access to information towards the goal of building on research and understanding, while businesses need to maintain tight control over information about their inner-workings and ethics— while others are based in the complexity of business ethics as a field.
2016 has been a year of extraordinary change. Many of these changes make our mission – to help companies strengthen their ethical cultures using behavioral science research – more vital than ever.
Consider just these three facts:
Populist movements around the world are usually antagonistic towards large corporations, which they often perceive as engaging in predatory behavior
The recent U.S. election likely means a new and lighter-touch approach to regulation and compliance, particularly in the financial services industry
The Brexit vote means that Britain must quickly decide upon its own approach to regulation.
Putting these together: The world is hungry for new ideas on how to improve business ethics in ways that do not rely as heavily as before on detailed rules formulated by legislatures and regulators. There is a desperate need to help businesses become more self-regulating, in ways that will protect multiple stakeholders while increasing the dynamism and profitability of the business.
That is exactly what Ethical Systems is doing and we have made great progress towards our goals this year.
Jonathan Haidt, Thomas Cooley Professor of Ethical Leadership at New York University’s Stern School of Business, was interviewed by strategy+business and shares his insight and expertise on ethical systems design and the various initiatives of our organization.
What causes a company to undermine its own future through ethical missteps? What enables it to lie to regulators, conceal critical data, and take chances on fraudulent activity that might, sooner or later, come to light? Is it the rapacious nature of capitalism itself, as some believe? Is it the work of a few “bad apples,” unavoidable in a milieu of dynamic innovation? Or is it some innate aspect of human behavior, impossible to regulate completely, but possible to understand? This inquiry, framed by New York University professor Jonathan Haidt and a global network of colleagues, could help keep companies out of trouble in the future — or perhaps change our view of what trouble really means.
Ethical Systems reflects on a year marked by tragedy and triumph, major ethics news and new research. We began 2015 by receiving IRS recognition of our organization as a 501c3 non-profit, and filing our first 990 report. Finally, we can begin raising money to fund our operations. What started as an informal collaborative network of researchers has blossomed into an official organization uniting researchers and business leaders who want to change the business world by “making ethics easy.”
Part 2 of Jonathan Haidt’s post on his recent talk at the Aspen Ideas Festival. Read Part 1 here.
A friend of Mark Twain once said, “Everybody talks about the weather, but nobody does anything about it.” Rising inequality is similar. Many on the left urge policies that would redistribute wealth more effectively, such as raising the top marginal tax rates. Some on the right have begun talking about inequality, and they propose policies that would encourage entrepreneurialism among the poor and working class, such as clearing away licensing restrictions on hairdressers and other small businesses.
Yet given the politically charged nature of this debate, neither side is going to get a chance to try its policies unless it gets control of the Oval Office and both houses of Congress.
Aren’t there any new ideas out there? Isn’t there anything that both sides might support? How about…better business ethics, achieved with little or no new regulation? How about Ethical Systems Design?
Part 1 of 2 on my talk at the 2015 Aspen Ideas Festival.
In just the last few years, there has been a lot of new research showing when and why ethics pays. I recently pulled this evidence together for a talk I gave at the Aspen Ideas Festival. I set up the argument by quoting Buddha’s version of the business case:
Set your heart on doing good.
Do it over and over again, and you will be filled with joy.
A fool is happy until his mischief turns against him.
And a good man may suffer until his goodness flowers.
The bottom line is that better ethical behavior will come when legal reforms lead to, or are supplemented by, changes in the culture and norms of the financial industry. As Tenbrunsel explains, “Just more regulation without addressing the individual, organizational and industry-level factors probably isn’t going to have a very significant impact.” Addressing all of those factors simultaneously is our goal at Ethical Systems.