Featured Ethics and Social Science Expert: Jonathan Haidt

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.

The Only Way is Ethics: A new whitepaper

We are pleased to announce a newly-released white paper in partnership with MindGym entitled The Only Way is Ethics: Why good people do bad things and how to stop us. This resource is a free, 44-page guide which presents research on why traditional solutions to managing ethics aren’t working, while also providing a set of tools and a framework to begin diagnosing your own organization alongside concrete advice for improvement. The Only Way is Ethics includes a foreward by Ethical Systems Founder/Director Jonathan Haidt and CEO Azish Filabi.

Azish Filabi at The Banking & Finance Ethics 2017 Conference

Ethical Systems CEO Azish Filabi was invited to deliver the opening remarks at The Banking & Finance Ethics 2017 conference on June 8th in Sydney, Australia. The conference covered the importance of trust and an ethical foundation for the financial services sector; exploring the crucial role individuals play in ensuring that the industry operates with integrity. We present her address below

Featured Ethics and Behavioral Science Scholar for June: Caroline Webb

Interview with Caroline Webb, author of How to Have a Good Day and Expert on Ethics and Behavioral Science

What are your main areas of research/work?

I show people how to use insights from behavioral science to improve their performance and wellbeing at work. In practice that often means helping them rethink the way they set goals, approach important conversations, tackle their tasks, manage their workload, handle personal setbacks and sustain their energy from day to day. Sometimes this is through 1-1 coaching and team sessions for senior leaders, but it’s often through workshops and interactive speeches for larger groups too. I also advise a couple of companies on ways to use behavioral science more broadly, including McKinsey & Company where I did behavioral change work for 12 years.

 

What do most companies overlook when it comes to behavioral economics, psychology, and neuroscience?

The primary focus of applied behavioral science to date has been public policy – something I applaud as a one-time policy wonk myself. But there’s a lot of untapped opportunity in business. At the moment, behavioral insights are mostly being applied by folks in the marketing function, and to a lesser extent in strategic decision-making. I’m always surprised that there isn’t more making its way into the people and culture domain, both through the HR function and in everyday management. But I’m optimistic that this will change – and it’s my mission to help change it.

Our Book Discussion With Jack Ewing and NYU’s Center For Sustainable Business

On May 23, the NYU Stern Center for Sustainable Business and Ethical Systems welcomed Jack Ewing, European Economics Correspondent for The New York Times, for a discussion of his new book "Faster, Higher, Farther: The Volkswagen Scandal".

Ethical Systems CEO Azish Filabi introduced Jack Ewing and discussed the ways in which this event exemplifies the mission of each center: "This event is a great opportunity for our two organizations to partner given the overlap between ethical failures and environmental impact at VW.  That VW’s actions breached the trust of its customers, employees, and the government is an understatement. The emissions fraud represents not only disregard for good business practices, but also the necessity of businesses to be at the forefront of meeting global environmental challenges. It is precisely the type of management decisions we are educating Stern students NOT to make."

Ewing, who has spent more than 20 years covering German business and economics, opened his presentation with a brief history of Volkswagen, which emerged in the late 1940s as the icon of post-war German regeneration. He detailed Volkswagen’s fraudulent emissions testing and took the audience behind the scenes to expose how this deception happened, who discovered it and how the company tried to cover up its misdeeds.

Airlines and Stakeholders: A First Class Relationship

U.S. airlines have recently hit some ethical turbulence, beginning last month when United Airlines personnel physically dragged a passenger from an overbooked flight and culminating last week when a “near riot” broke out in Fort Lauderdale after Spirit Airlines canceled 11 flights during a labor dispute with its pilots. The public has become increasingly critical of air travel.

Yet the business community seems to disincentivize airlines from pursuing a more ethics-forward approach. When American Airlines gave pay raises to its pilots and flight attendants ahead of contract negotiations, Wall Street analysts complained about the prioritization of labor over shareholders and exacted punishment on AAL’s stock price. The flight attendants’ union countered with a petition pointing out that shareholders have received ample compensation over the last three years.

A Long Term Fix for Our Short Term Focus on Corporate Culture and Profits

In a society and culture that emphasizes the new and the now what does it mean to manage for the long term? If we want what we want when we want it, businesses that take a multi-year perspective may be misaligned with modern expectations by shareholders to maximize profits, almost immediately.

Today’s businesses have morphed into revenue generators designed to squeeze every ounce of productivity and profit from its people and operations. Many corporate leaders see their role as the facilitator of shareholder enrichment. Coupled with a culture of instant gratification, it is not that shocking to see the reinforcement from the field as to what it means to be a successful enterprise.

However, a new article in Harvard Business Review by authors Joseph Bower and Lynn Paine of Harvard Business School argues that the entire basis for the popularity of shareholder primacy is deeply flawed and that its growing reliance excludes real opportunities for sustained growth and imperils the broader economy.

Retail Bank Incentive Schemes in Australia

Dennis Gentilin is the author of “The Origins of Ethical Failures” (Routledge, 2016) and the Founding Director of Human Systems Advisory.

 

Last week, Mr Stephen Sedgwick AO released the findings from his review into remuneration arrangements for retail banking staff in Australia (the final report can be downloaded here). The review is part of a broader program of work being undertaken by the Australian Bankers Association that is aiming to address the culture and conduct issues within the banking sector.

With this objective in mind, the review represents a significant (albeit small) step in the right direction. Although some may question whether Mr Sedgwick went far enough, he has squarely placed the ball in the banks’ court and left them under no illusions that change is needed.

Featured Ethics [and Transparency] Scholar for May: Alison Taylor

Interview with Alison Taylor, Director of BSR’s sustainability management practice

 

What are your main areas of research/work?

I’ve spent most of my career working in consulting roles, helping large companies navigate integrity challenges. These are becoming ever more complex, are not confined to a single department, and require difficult judgment calls at the critical intersection of risk, responsibility, and reputation.  

Currently, I work for BSR, which is a global nonprofit organization that works with its network of more than 250 member companies and other partners to build a just and sustainable world. There, I saw the sustainability field attempting to tackle some core business ethics and integrity challenges, though from a very different angle than the approach taken by risk and compliance teams. Both perspectives are essential, but too many discussions and purported solutions remain separate, in distinct silos.

I see huge potential in a more integrated approach to ethics that incorporates ideas from both compliance and sustainability. The concept of a “culture of compliance” is strangely empty. It may sound obvious to say that corporate values statements must amount to more than words on a website, but the task of giving these concepts substance can be neglected. We still hesitate to question the dominant idea that all decisions to maximize profit are ethically neutral. And we still argue that a private sector organization needs a ‘business case’ for integrity, while expecting that the individuals within that organization should behave ethically. I argue that ideas taken from corporate responsibility and sustainability can provide both the direction and the decision-making frameworks we need to use when tackling today’s challenges in business ethics.

Building Cultures of Trust at Laureate Education

Ethical Systems seeks to highlight companies with a strong commitment to ethical, speak up cultures and trust. One of these companies is Laureate Education, Inc., who created a series of internal videos for their 70,000 employees about trust, blame and ethics. We present them below with an introduction by Laureate's Chief Ethics & Compliance Officer, Mark Snyderman.


Laureate Education, Inc. is the largest global network of degree-granting higher education institutions, with more than one million students enrolled across 70 institutions in 25 countries at campuses and online. Laureate offers high-quality, undergraduate, graduate and specialized degree programs in a wide range of academic disciplines that provide attractive employment prospects. Laureate believes that when our students succeed, countries prosper and societies benefit. This belief is expressed through the company's philosophy of being 'Here for Good' and is represented by its status as a Certified B Corporation™ and conversion in 2015 to a U.S. public benefit corporation, a new class of corporation committed to creating a positive impact on society.