“How the 'Financial Crisis' became 'the Ethics Recession ...

“How the ‘Financial Crisis’ became ‘the Ethics Recession”
Rushworth Kidder, Monday 20 th September
Mr Kidder started the evening with an overview of the events of the financial
crisis, from a US perspective. He described how, as the crisis progressed, the
language used to describe it shifted from economic and political to a
‘language of ethics’. Instead of asking ‘what’s the bottom line?’, people
began to ask ‘what’s right?’.
The speaker cited research that shows there are five common values cited by
every culture when asked to describe ethical behaviour:
o Responsibility
o Honesty
o Respect
o Fairness
o Compassion
It was agreed that ethics is an application of our values to our decision
making. You don’t have to, and can’t, impose values on people – they are
there and you can find them if you look.
Ethical dilemmas arise when two of our values come into conflict with each
other and we have to choose one of them. The most common paradigms
dilemmas fall into are:
o Truth vs. loyalty
o Short vs. long term
o Needs of individuals vs. community
o Justice vs. mercy
What would a perfect culture of integrity look like? Picture a sphere with three
smaller spheres floating around it. The large sphere in the centre is integrity.
The three smaller spheres floating around it represent values (i.e. intuition),
decision making (i.e. rational) and moral courage (i.e. action). All three of
these are required to create a culture of integrity.
Humans can make ‘good’ decisions, but no action/moral courage equates to
making the wrong decision. Moral courage doesn’t happen unless there’s
something at risk.
Culture is ‘how we do things around here’. How I do things around here is
style.
Rush cited Lord Moulton writing in The Atlantic, 1924, who proposed that
‘Ethics is obedience to the unenforceable.’
Capitalism is good, as long as it is based on and assuming high standards of
moral underpinnings. To move forward we need to focus on creating a
culture of integrity, to get back to moral context. If we don’t address this ethics
recession now, it will be repeated in the future. Rushworth cited an article by
Tom Friedman in the New York Times in which Friedman states: “We don’t
need a financial bailout, we need an ethics bailout”.

Increasing regulation is not the answer. Not only can ethics not be
regulated, but think about who you’re trying to regulate – some of the
“smartest people in the room” to use a phrase from Enron.
A series of Q&A followed in which the following topics were addressed:
The distinction between different ‘sets’ of ethics: personal society ethics,
company ethics and financial ethics. It was suggested that some have got
worse than others.
The impact of technology on our morals. It creates a ‘remoteness’ to the
situation and increases the speed at which we can operate.
Does an ethics oath really translate into an admission of failure on behalf of the
business schools?
Culture emulates family life; when children violate the trust of their parents,
rules come in.
When companies pay a fine but don’t admit that they’ve done anything wrong;
is this a reflection of poor ethics?
Methods for raising ethical sensitivity were discussed.
Will the BRICs repeat our mistakes? The key ethics issue in these markets is
corruption. This needs to be eradicated first.
The effect that one good role model has; it always triumphs over bad. It
parallels the relationship between light and dark – why does light always
triumph over darkness?
What if bad is the absence of good? We’re accustomed to thinking in opposites.