We need to talk about EYthics

Ethical Cheating

If you’ve not seen today’s NYTimes story about the SEC fining accounting Firm Ernst & Young, then you’d be forgiven for thinking it was a piece of satire.?But “Ernst & Young to pay $100m after auditors cheating on Ethics Exams” is probably a step too far, even for most satirists.?

Now, on the face of it, this is an appalling story.?Because when the people whose job it is to keep an eye on companies, fail even the most basic ethical standards, then there’s a huge problem.?After all, you’ve got to be particularly dumb — or unethical — to think it’s ok to cheat on an ethics test.?It’s entirely unacceptable.

But as I reflected on the story, I found myself moving away from the WTF of the story and asking a more simple question:?what’s the point in making people take an ethics test that permits them to cheat??Aside, of course, from potentially an exercise in entrapment to test their ethical makeup??

On the face of it, testing people on ethics sounds sensible.?But let’s think about what the test is actually achieving.?The fact cheating is even an option, means the test has standard answers. ?It’s highly likely to be a multiple-choice type test.?You know the kind of thing:

A client has offered you an envelope of cash and asked you not to look too closely at their stock levels.?Do you:

(A) Accept their kind gift and accede to their request.

(B) Explain that the going rate for turning a blind eye is twice what they’ve offered and ask them for more.

(C) Accept the gift but give the money to charity

(D) Refuse the gift and immediately report it to your Ethics Officer

Aside from an exercise in box-ticking and potentially highlighting the existence of Ethics Officers, it’s a pretty pointless question.?Does anyone really need to be told not to accept bribes??If they do, then you’ve got much bigger problems to worry about! ?

One of the main reasons this type of training persists is because it feels like a good idea.?At least from the perspective of some Lawyers and Compliance Officers.?The former because it theoretically makes it easier to fire people who behave unethically and the latter because they can tell regulators that “everyone has done ethics training”.

However, what that “ethics by numbers” approach ignores is the fact that the vast majority of employees aren’t setting out to be unethical. Given a choice, they’d like to do their jobs in an ethical manner. And those that don’t aren’t going to pay any attention to the training anyhow!

Forcing people to do pointless training that asks dumb questions, isn’t helping them to be more ethical.?In fact, it risks sending a signal that the Firm views ethics as a performative check box exercise.?The form might suggest “we really care about ethics”, but the substance screams “we really don’t”. ?

If we want employees to behave in an ethical manner, then we need to give them training that helps them to do the right thing.?Not by asking them silly questions about hypothetical scenarios, but by openly talking about real challenges that people might come across. Things that don’t have simple answers that lend themselves to being copied.?

Here’s my alternative suggestion. Do the performative nonsense tests if you really must. Keep the SEC and other regulatory bodies happy.?But I think those bodies and the companies they oversee should go much further.?Why are we relying on tests for something as complex as ethics???

More talk less tickbox

I think the answer lies not in tickbox tests, but in practical workshops; get people to sit around a table and talk about realistic ethical challenges that they might face.?Help them to spot when ethical issues might appear and why ‘self service’ might not be the best way to resolve ethical dilemmas. Most importantly, help them to understand that when —?not if — ethical dilemmas arise, there’s a process in place to support them through it. Send senior leaders along and get them to talk frankly about ethical challenges they’ve experienced. ?Not hypotheticals, but real issues. As my friend Maarten Hoekstra puts it, people don’t need help managing issues that are black and white.?They need help managing the grey.?And you don’t teach that by getting people to do performative tests.?

Yes, what I’m suggesting costs time and therefore money.?But if you really care about ethics, you'll make that investment.?So, when I read about the EY story, I don’t think the biggest issue is people thinking it’s ok to cheat on an ethics test.?I think the far bigger question is why a subject like ethics is being relegated to a tick box test.?