Rationalization and Initiative in the Ethics Sphere

When it really comes down to it (and it usually does), what is the greatest enemy of trust in government, or anywhere else for that matter? Greed, power, ego, loyalty? I'd put my money on (or against) rationalization, the ability of people to justify what they do and fail to do.

Here's what got me thinking about this, from a Reuters Business article yesterday written by Claudia Parsons:

Kerry Francis, head of corporate investigations at Deloitte Financial Advisory Services, this month co-wrote a survey whose findings showed that 63 percent of executives expected accounting fraud to increase during the next two years because of the recession.

"I do believe that fraud is always going to happen," Francis said. "The human mind has this ability to rationalize away bad acts. It's a sad commentary on the human being. That's why there have to be controls put in place."


Rationalization after the fact seems to be the flavor of the week. Financial leaders are finding many ways to justify their actions and their inaction. Everyone else just shakes their head and tries to figure out whom they can trust with their hard-earned bucks.


"I don't think seeing dead bodies in the street always wakes people up," said Roy Snell, chief executive of the Society of Corporate Compliance and Ethics .... "I've watched this for 13 years. There are always people rationalizing it, saying 'Our people wouldn't do that.'"

Rationalization looks ugly in its extreme forms, such as banking executives or Rod Blagojevich. But it takes so many forms, it's often hard to see. One reason is that it so often is involved with inaction, not taking initiative, just doing one's job. This is just as true for people who are on the side of good, who have nothing to gain through the use of their positions, such as members of ethics commissions, ethics officers, and ethics and compliance staff.

This is especially true when one's job is passive. This is a serious problem with government ethics programs across the country. When nothing is happening, nothing happens.

The most common rationalization for not improving ethics programs is that no one uses the ones we have, no complaints are filed, few advisory opinions are sought. Therefore, there must not be any ethical problems, everything's good, nothing needs to be improved, nothing needs to happen.

This inaction in the ethics sphere usually has two causes. One, the ethics program is passive. Its rules and structure are such that its people sit and wait for someone to come to them, rather than taking the initiative, getting involved where there appear to be ethical problems, doing investigations without complaints being filed, starting training programs, recommending improvements to the ethics program, promoting their work to the news media and on the internet, etc. Initiative is difficult, it often runs into opposition, but without it an ethics program will be relatively ineffective.

The second reason is that ethics programs themselves have a trust problem. The members of an ethics commission have been selected by the very people they're supposed to be keeping an eye on. The ethics commission has no teeth, and is completely dependent on the good will of the very people they're supposed to be keeping an eye on. In short, without trust and independence, who in their right mind would make use of an ethics commission? So the few complaints filed are political, which further undermines trust in the ethics program.

Ethics commission members can stop being passive. But this rarely happens without ethical leadership from the top. There's no guidance, the commission members are not part of an ethics community, and they have better things to do with their time.

The Reuters article gives one example of good ethical leadership, involving GE's former head, Jack Welch, who "publicly praised a manager who had failed to reach his sales targets because he refused to pay a bribe to win a contract to build engines for a foreign airline." How often does a press release like this come from a mayor's or city manager's office? And how often does one come from an ethics commission or ethics officer?

It's easy to rationalize doing nothing when your ethics code or job description does not require action. But that won't get the job done.

Robert Wechsler
Director of Research-Retired, City Ethics

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