WongonWork – Corporate Behaviour in 2024: How did it get so bad?

The publication last month of an external review of the handling by Church of England (CoE) clergy of allegations of serial child sexual abuse by a single prominent individual over many decades has prompted reflections on the frequency of corporate malfeasance in our news in recent years. The reputations of so many well-respected organisations have been damaged by the actions of individuals or small groups; illegal or ethically questionable activities, which have then been brushed under the carpet by others at the highest levels of corporate responsibility. When these have surfaced, the response has rarely been contrition and learning but to deny, delay, blame others/ externalities, challenge, even minimise their significance …

Is this pattern baked into 21st century corporate psychology - or are pressures on individuals (and their leaders) so extreme, and the temptation for quick (PR) fixes so seductive, that there has been a shift in the moral compass of the individual employee, or of society’s tolerance for malfeasance in general?

Keith Makin’s November report documents the Church of England’s (CoE) failings in more than 130 cases of child sex abuse by a single associated abuser, first reported to church officials in a 1982 internal report. It reveals subsequent individual safeguarding failings by senior clergy, and clergy since promoted. These include a former Archbishop of Canterbury, Diocesan Bishops and Canons and Reverends – individuals entrusted with the moral and spiritual leadership of a nation.

I wasn’t planning to end the year with a blog on unethical behaviour but having read the Makin Review and watched the Channel 4 news interview of Archbishop Welby, a privileged executive deemed unable to read a room, I wondered, how did things get so bad? The Archbishop’s C4 interview had echoes of the entitlement demonstrated by Paula Vennells, a senior executive of the UK Post Office and CEO from 2012-2019, a period during which it wrongfully prosecuted hundreds of sub-postmasters for fraud, theft and false accounting. Even before Vennell’s stint as CEO it was known that faulty data generated on the Horizon IT system had registered apparent thefts of many thousands of pounds. Vennells is also an ordained CoE minister.

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While I’ve highlighted the CoE, corporate cover ups appear at regular intervals. At the spectacular high-impact end, you will probably recall the Volkswagen Emissions Scandal where software was installed in 11 million diesel vehicles to cheat emission tests (2015); the Theranos blood testing deception (2003-2018) in which the founder, Elizabeth Holmes, fraudulently claimed that a few drops of blood in a Theranos machine would revolutionise blood testing; the Wells Fargo fake accounts scandal (2011-2016) where employees created millions of unauthorised bank accounts in customers' names to meet sales targets - all with the knowledge of senior management; the Boeing 737 Max Scandal in which Boeing concealed critical information on the aircraft’s Manoeuvring Characteristics Augmentation System (MCAS) from regulators and pilots resulting in two fatal crashes and the loss of 346 lives; the Wirecard Fraud (2020) with the German payment processing company collapsing after years of falsifying its financial statements and €1.9 billion unaccounted for; the Facebook-Cambridge Analytica Data Scandal (2018) in which Cambridge Analytica harvested data from millions of Facebook users without their consent to influence political campaigns; and the list goes on.

In the everyday operations of organisations across the world, it is likely that there are thousands of decisions to cover up the less spectacular, the less newsworthy infractions. Although there are many organisations with ethically robust cultures, there are also many which function to expediency rather than values.

We therefore return to the question: how did it get so bad, or was it ever thus? What are the psychological underpinnings to such behaviours?

There are many validated approaches to measuring the psychological safety (or lack of) at your workplace. If you can answer with an unequivocal YES to the following questions, it may be time to examine your organisation’s culture, and its robustness to unethical and dubious activities.

As an employee of your organisation:

1.????? Do you feel a Pressure to Conform to your organisation’s norms and directives, even if they seem unethical, deviate from policies and procedures, or do not make good governance sense? This kind of pressure may be signalled from superiors and peers or is embedded in the organisation’s culture.

2.????? Is there a Diffusion of Responsibility in the ways that decisions are made? When many individuals are involved, each one may feel less personally responsible for any unethical or questionable actions. There’s a subtle pressure to go with the flow, the path of least resistance and embrace a particular ‘group think’ without a critical examination of the rationale for a decision. Such diffusion of responsibility can make it easier for people to justify their participation in a cover-up.

3.????? Are there Discomforting Rationalisations of Behaviours and Decisions? Humans are exceptionally skilled at justifying their behaviour and maintaining their self-image as “good people”. These self-serving justifications can take several forms:

a. “It’s a grey area”. Claiming for drinks with a friend as a business expense is in the grey zone. Invariably, one can point to the exchange of business advice, or justifying the benefits of maintaining a professional relationship. Ambiguity avoids a moral dilemma and the action is framed positively sans guilt.

b. It’s an “act of altruism”. In the college admissions bribery and fraud cases, the motivation was to provide an advantage to another, a loved one. ?An action can be rationalised in the workplace as a benefit to a colleague or to the business as a whole;

c. “I’m already doing good”. In a phenomenon termed “moral licensing”, one good deed can licence others to trade-off against another, more morally dubious, decision. When Archbishop Welby resigned, a few of his supporters expressed regret as he was instrumental in strengthening ?the central safeguarding team in the CoE from one part-timer to 55. Environmentalists despair that increased air travel can be morally offset by payment of a small fee. In this way, a short-term (even a significant) good in one area may become a ‘get out of jail’ card in other situations;

d. Offering a Partial Admission of error. In the C4 news interview, the Archbishop, when pressed, was forced to concede that the CoE safeguarding failures weren’t a result of a cover-up but of individual incompetence. ?The research suggests that partial confessions may be helpful to bolster one’ s moral self-image while avoiding the negative consequences of a full confession; however, opting for just a partial confession can, in time, result in an individual’s heightened negative feelings about themselves;

4.????? Is Loyalty and Ingroup Favouritism part of the company culture? The norms on this are shifting rapidly with recent examples such as Trump’s new appointments to government positions and Biden’s Presidential pardon of his son of all crimes indicating a worrying trend. Out of a sense of loyalty, one may over up for a colleague or not speak up so as to protect the group when a less-than-ethical path is taken. This can occur in decisions on procurement, for example in awarding favours, or just turning a blind eye.

5.????? Is there a Fear of Retaliation? Fear of losing their job, damaging their career, or facing other forms of retaliation can prevent employees from speaking out against unethical or dubious practices. Speaking up requires courage and the consequences of speaking the truth can be costly. Is there psychological safety in your workplace? I have just recorded a podcast on how psychological safety and its effects are measured and addressed. (This topic in itself merits a dedicated blog in the future.)

6.????? Is there Social Pressure to Normalise Behaviours which one suspects marks them out as deviations from the norm? Starting from small infractions these can escalate into major cover-ups as employees become desensitised to the wrongdoing. Cutting corners to expedite procurements may appear harmless, but over time can compromise the processes in place to control against corruption.

7.????? Are there Feelings of Moral Disengagement in the workplace? Is the justification of a dubious practice as being “above my pay grade” all too easy? Or are the rationalisations as described in point 3. above being used? E.g. a supervisor asking a worker to ignore safety protocols or to sign off on slightly defective products. Taken to the extreme of “just following orders” led to excuses by Nazi concentration camp officials at their trials in Nuremberg as a defence of their actions, but rejected by the Court. The now (in)famous, but flawed, Milgram experiments on obedience to orders was the first of many studies to investigate this phenomenon.

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It would appear that we are an incredibly creative species in terms of navigating the minefield of what is right and wrong (and I include myself in this constant moral calculus). We are capable of incredible feats of delusion. To address the question I posed initially – How did it get so bad, or was it ever thus? - it would appear that we build policies and processes supported by regulatory institutions in an attempt to demarcate a line between right and wrong, while the individual’s psychological processes only work crudely to separate the justifiable from that which is not justifiable.

Reflecting on what could change this slippery calculus, words from the rites of the Eucharist (Holy Communion) last Sunday come to mind: “Though we are many, we are one body, we are one body in Christ”. Unless and until we appreciate that our individual choices and actions affect everyone, not just ourselves, but also our colleagues, our neighbours, the wider society, the planet, and those yet unborn, we will continue to rationalise our actions and decisions pretending that these don’t matter because…(make up your own excuse at this point).

Craig Wright, an acclaimed American playwright and screenwriter who wrote the harrowing play, The Unseen, explains it far more succinctly in the programme notes: “Life is hard because people with power are making it hard … because making it hard for others makes it easier for them.”

*A related blog on the Future of Governance.

December 1st marked World AIDS Day, and this year the UN sets an ambitious target to eradicate AIDS by 2030. December is also the month we mark International Human Solidarity Day. The United Nations and its work were built on the concept of Solidarity: to “draw the peoples and nations of the world together to promote peace, human rights and social and economic development”, relying on the solidarity of its members to unite “to maintain international peace and security”. And to all my friends near and far, can I share all the blessings of the coming season.

In my monthly blogs, I’ll explore some of the drivers shaping (the future of) work and the implications for organisations.

*Hyperlinked orgs and sites aren’t endorsed by me but are sources I scan and include in some of my analyses.