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Poor Ethics:  A Gateway to Ruin

By Dorothy Riggs, CFE

Recent news reports of the latest Anthony Weiner scandal, once again brings the discussion of ethics to the tips of our tongues.  When it comes to committing acts of questionable behavior Mr. Weiner is definitely not on that crooked path by himself.  Time and time again we hear of politicians, employees, businessmen, educators, husbands, wives and so on who are caught straying away from the straight and narrow. These wandering acts often lead to catastrophe.  Surely no one intentionally sets out on a path of destruction. So, what leads them to a trajectory of ruin?

Contributing Factors to Ruinous Behavior

We have laws that provide direction regarding legal and illegal acts.  An extremely simplistic definition of the law is an establishment of rules that are intended to govern behavior and are enforced by various local, state and federal agencies.  For the most part laws are black and white. It’s very clear which actions are acceptable and which are not. Even still, a massive number of people break laws. They aren’t necessarily “bad” people. But apparently, exhibiting ungoverned behavior is acceptable to them in certain instances. Many factors play into their decisions to maneuver outside the law.  For example:

• Minimal likelihood of getting caught
• The offender’s social status (ego / God complex)
• The offender’s perception of risk or harm involved
• Minimal consequences result from the offense if caught
• The offender's ability to withstand consequences related to the offense if caught
• The reward obtained from committing the offense may be more valuable to the offender than suffering the consequences if caught

Abiding by speed limits and wearing seat belts are areas with high offense numbers. Unless you’re a habitual offender, fines for breaking such laws are minimal compared to punishments associated with higher level offenses.  Before committing full throttle to these minor offenses many drivers look around to see if authorities are nearby.  This suggests that their behavior is contingent upon whether or not enforcers are watching.  We’ve all heard the age-old question; If a tree falls in the forest and no one's around to hear it, does the tree make a sound? We can also apply that philosophical scenario to behavior; If someone commits an offensive act and no one finds out about it, is any harm done?

The Significance of Ethics

This is where ethics enters the scene.  Basically, ethics consists of a set of moral principles that govern behavior, attitude and philosophy.  Whether conscious of it or not, each individual, group or organization exhibits a particular ethical persona or code of conduct. It may be formally expressed and/or merely implied.  But, it absolutely exists.  At times what is expressed may not mirror what is implied, which is problematic.  No matter the circumstances, whether anyone is around to witness it or not, those with upstanding character and ethics strive to steer clear of offensive or questionable conduct.

Last month I attended a fraud seminar and benefited from a presentation about Ethics. The speaker explained that in appreciation for hard work and community support a restaurant offers a substantial meal discount to local law enforcement officers upon each visit.  However, the superior officer instructed his team to visit the restaurant only on sporadic occasions.  The senior official held the agency’s ethics into consideration when issuing the directive.  Upon hearing this a couple of Bible verses came to mind, “Let not your good be evil spoken of”and “All things are lawful for me, but not all things are expedient.”  Just because something may be lawful doesn’t mean it’s in the best interest of those involved.  The restaurant made a good gesture by offering the discount.  However, if officers visit the restaurant too frequently it may appear that the restaurant is receiving security services or some other benefit in exchange for the discount, which could be viewed as a small bribe.  The restaurant’s profit margin could also potentially be affected in one way or the other by frequent law enforcement patronage.  Either outcome could possibly tarnish reputations and call ethics into question.  Other related situations involve individuals being terminated by employers for publicly expressing their personal thoughts, which were considered offensive to others.  While public speech may be lawful, it may not be in good character to share every thought.  Not only do individuals represent themselves, they are considered reflections of their families, employers, friends, churches and all other affiliations, as well.

Establish an Ethical Compass to Curtail Poor Conduct  

As previously mentioned laws are generally black & white and serve as a compass to guide us regarding legal or illegal deeds.  It’s reasonably clear which actions are legal and which are not. However, when it comes to morals, things can get a little cloudy. Moral standards can’t really be legislated. They are a matter of personal perspective.  Some examples are extra-marital sex and excessive alcohol intake.  What may be moral or ethical for one may not be for another.  Just as the illegal acts of an individual can be detrimental to his or her associations, so can immoral or unethical acts. Because personal moral codes of conduct criterion varies so widely from one individual to the next, it is imperative that companies and organizations attempt to govern the acts of associates by developing, demonstrating and communicating a clear morals clause and culture of ethics both internally and externally in order to protect the organization’s reputation and resources. Damaged standing in the community can severely affect businesses financially through industry regulations & sanctions, diminished sales, poor employee morale and etc. Another consequence of poor ethics is fraud.  Unchecked ethical behavior is often a gateway to embezzlement, skimming, financial statement, and other types of fraud. The same factors that contribute to breaking laws, also apply to committing unethical acts. However, those factors can possibly be curtailed with a formal code of conduct.  A business’s ethics guidelines should act as the compass which guides the conduct of associates.  Here are some suggestions for developing and implementing a superior ethical culture within your organization:

• Seek legal counsel to assist with the development of the company’s morals clause to insure that all potential civil and legal issues are properly addressed.
• Include the company’s moral standards in employee contracts, employee handbooks, official website and etc.
• Make sure each employee is familiar with and acknowledges the specifications included in the company’s morality standards via signature indication. 
• The company’s morality standards must be easily accessible to employees at all times, should questions arise.
• The company’s morality clause must unequivocally state the disciplinary process and reprimand(s) resulting from behavior that is inconsistent with company standards.
• Regardless of the offender’s status, the company’s ethical standards must be adhered to consistently and to the letter.
• A hotline should be available to encourage reporting offenses. 
• An open-door policy should be embraced so that employees feel comfortable discussing issues of concern or confusion.

Dorothy Riggs assumes sole copyright of articles authored by her that are published on FraudSense.blogspot.com . Her permission is required before an article can be copied or reproduced. Requests for reprinting an article in any form must be emailed to: FraudSense1@gmailcom.