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Ethics as innovation

By Karen Wensley

A culture that encourages individuals to look at issues from different angles is likely to attract great people and win awards for creative solutions.

I was recently sitting in a boardroom waiting for a meeting to start. I had never met the person opposite, so we introduced ourselves and asked each other the usual questions. He was a venture capitalist. I mentioned that I sat on a couple of boards, and also taught a business ethics course at the University of Waterloo. “We had an ethicist on one of our boards,” he told me. “It was a disaster — she was always wanting to talk about whether our paper towels were made of recycled paper.”

I don’t describe myself as an ethicist (that implies formal training) and I have never interrupted a business strategy discussion with a question about paper products. But it was disconcerting to think that being associated with ethics was a negative brand. Do people in business view ethics as a distraction from the real work to be done?

While mulling this over, I received an email from a reader of this column. (I have fans!) He described a discussion some years ago with colleagues over whether to accrue a revenue item (he was in the public sector, so accruing revenue that you won’t be able to spend before year-end is a bad thing). Here’s what he wrote:

“Someone asked the question, ‘What is the right thing to do?’ I distinctly remember all talk stopping. The consensus was we should accrue it. Then he asked why we were thinking about anything else. … I was always ashamed that it wasn’t me asking the questions but it changed my life and after that I have frequently asked the question, ‘What is the right thing?’ and apply that to all decisions.”

I realized that there was a link between these two experiences. Having a designated ethics person in a meeting is not the best way to raise moral issues. He or she will end up being excluded from participating in discussions of other business issues, and thus will become branded as a disrupter, as irrelevant, or impractical. And it may discourage others in the group from raising ethical issues — after all, someone else is looking after those.

What allowed the other situation to work so well? First, the individual who asked about the right thing to do felt empowered to do so. Second, the question was asked in the context of an actual business decision, not as a side issue. And finally, the other people in the room were open to the question.

I have several times been in meetings in which someone (not me, alas) completely changed the course of a discussion by asking whether something was right, or in line with our values, or fair to customers, etc. It’s amazing how often this is successful. Of course, you have to pick your battles. Saying, “I think it’s wrong that we are in the oil business” is unlikely to win over colleagues. But we frequently hesitate to speak up, assuming someone else will voice what we are thinking. They might not be thinking the same thing, however, or they too may be hesitating, so we all have to take the responsibility to raise the issue.

I am not opposed to appointing a chief ethics officer in a large organization. If I were working in an accounting department and had just been asked to process a journal entry to reflect a bribe paid in cash to a foreign government, I would appreciate having someone to speak to. But having a designated ethics person on a team or in a meeting is not a great strategy.

Ethics aside, a culture that encourages individuals to look at issues from different angles, and to raise those ideas in meetings with colleagues, is likely to attract and retain great people and to win awards for creative solutions. So the next time someone proposes ethics training, think instead about helping people develop the skills to listen to different points of view, and to voice their own ideas effectively. If we can brand ethics as a component of a culture of innovation, everybody wins.

This article was originally published in the January/February 2017 edition of CPA Magazine.