resultsthroughintegrity

Equanimity - serenity within the chaos

by Peter Vajda

"So nothing is ever good or bad unless you think it so, and vice versa. All luck is good luck to the man who bears it with equanimity." - Boethius (Anicius Manlius Severinus), Consolation of Philosophy
 
It seems most everyone I know is experiencing life these days caught up in some flavor of crisis or conflict either at work, at home, at play or in relationship. They're experiencing a form of conflict and stress around issues, for example, like leading and managing, or processes, deadlines, budgets and job security, or personal relationships and unresolved conflicts, or how to resolve health and education challenges, or whether what they are doing is what they really want to be doing with their life.
 
Stress is the wrapper surrounding their lives - consistently experiencing racing heartbeats, shortness of breath, tight jaws, facial frowns, rigid postures, negative emotions and feelings, critical and judgmental inner dialogue, illness and dis-ease. A life defined by automated, robotic reactivity to conflict and crisis. But, it doesn't have to be this way. 
 

WHAT IS INTEGRITY IN PRACTICE?

 “Integrity is the cornerstone, if not the bedrock, upon which all financial markets are based.”

(Hank Paulson, Chairman and CEO, Goldman Sachs Group June 2002)

 Whilst we have described a number of values and vices, this list is not exhaustive and should not imply that integrity can be learned by heart like the “The Ten Commandments”.

We do not propose that it is right that people should merely read a code of ethics or a list of values and then sign a declaration to that effect.

 In the early 1970s, Harvard Professor Lawrence Kohlberg proposed a model of Moral Development which demonstrated that people shaped their sense of morality through the following stages9:

 1. “Obedience and Punishment” – We are children and we behave acceptably because we are told what to do by an authority figure such as a parent or teacher. This obedience is enforced by the threat or application of punishment.

 2. “Individualism, Instrumentalism and Exchange” – This is when we recognize that it is in our best interests to be moral.

 3. “Good boy/girl” – We do the right thing because it will gain the approval of others.

 4. “Law and order” – We abide by the law and have a sense of duty.

5. “Social contract” – We have a strong sense of social responsibility and the welfare of others.

 6. “Principled Conscience” – We accept universal principles of morality and the demands of individual conscience.

 

AN ETHICAL FOUNDATION FOR FINANCIAL SERVICES

Integrity and fairness thus emerge as core business principles. We contend that firms and individuals must always place these principles above profit if they are to be ethical.

 If this statement seems challenging, then simply consider in what situations you are prepared to compromise these principles?

 Are you happy to share these instances with your customers, employees and investors?

 

IF IT’S LEGAL THEN SURELY IT’S ETHICAL?

The economist Milton Friedman argues that “there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”(1).

 These “rules of the game” are to be understood as a particular society's laws. In a nutshell, Friedman is arguing that business people are ethical if and only if they struggle to increase their profits and that they are entitled as part of that struggle to do whatever the law permits.

 As long as a person's profit-maximizing actions conform to the law and professional rules, he is, in Friedman's view, acting ethically.

 Ethics is not rules.

The activities of businesses under the Nazi regime should be sufficient to show that morality (2) and law are distinct. Helping to build extermination camps was legal and good for profits but it was not ethical. Even in a more just society, laws often state only a minimum requirement, usually what is enforceable in practice, rather than what is right.

 Yet Friedman’s answer is the most common one in business today.

Friedman’s approach to ethics is limited because rules cannot cover every situation. An ethical code that simply gives detailed rules and nothing else will sink under pressure either from clever people who find ways round the rules or from new situations the rules don’t cover.

 Another very real problem for investors who take law as their professional moral guide is the different laws that operate in the different countries where they do business. While the sale of the pesticide DDT is illegal in the EU, it is legal in many less developed countries. Does that make it morally acceptable to invest in factories producing DDT in poor countries?

 What distinguishes ethics from rules is that rules tell you how to act while ethics tells you how to think before acting.

 If rules are the bricks with which we build the house that shelters us from greed and selfishness, then the foundations of that house are ethics. Without ethical foundations, the house of rules will collapse under the growing weight of regulations and the pressure of financial storms.

 So what is ethics?