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ethics

How Communication can Help Break the Chain of Corruption in the Private Sector

Roxanne Bauer's picture

When one thinks of corruption in the private-sector, grand scenes of executives paying bribes, bidders lying to win contracts, and senior accountants setting up secret bank accounts are likely to come to mind. In reality, though, the most common form of corruption is small-scale bribery involving people at every step of a company ladder. 

Small-scale bribery can take many forms, including non-disclosure of conflicts of interest, setting up deals that benefit particular people, or paying a little extra money to speed up a normally slow process. You might not think the everyday payments people make to building inspectors, customs officials, their friends across the street, or to themselves matter, but they can create a culture of corruption and set an expectation for future payments.

This was one of the main points of a panel discussion, “The Role of Integrity Compliance and Collective Action in Making the Private Sector a Partner in the Fight Against Corruption” at the International Corruption Hunters Alliance conference held at The World Bank Group December 8-10, 2014. The panelists were Dr. Andreas Pohlmann, Billy Jacobson, and Cecilia Müller Torbrand. Galina Mikhlin-Oliver of the Integrity Vice Presidency of The World Bank was the moderator.

​The Things We Do: Is the Culture of Banking Dishonest?

Roxanne Bauer's picture

Despite its relevance to the broader economy of states, there exists little empirical information on the culture of the banking industry. Identifying the effects of business culture poses several challenges because comparing employees in one sector to those in another can be misleading. Some professions may naturally attract different kinds of people, making it tricky to separate cultural factors from individual ones. Moreover, the financial industry is broad and comprised of many different kinds of businesses and institutions, with some more focused on the consumer and others more focused on fiscal details.

Attempting to shed light on the subject, academics from the University of Zurich designed an experiment inspired by the economic theory of identity.  Identity economics states that economic choices are not only based on personal taste but also on what an individual considers to be appropriate.  Whether a choice is appropriate or not depends on a person’s social identity– their sexual orientation, race, religion, occupation, or where they live.

In the experiment, 128 employees from an international bank, with an average of 11.6 years of experience in the financial sector, were split into two groups. About half of the participants worked in a core business unit, like private banking, asset management, trading, or investment management.  The other half worked in support units like human resources or administration. They were randomly assigned to a treatment or control group.

Reputation and Governance Styles: The Leader as a Smart Aleck

Sina Odugbemi's picture

Because we have a global audience, I must start by explaining that, according to the Oxford American Dictionary, a smart aleck is “a person displaying ostentatious or smug cleverness’.  It also reports that one usage of the word ‘smart’ means: “(of transactions) unscrupulous to the point of dishonesty”. If you watch crime movies the way I do, there is a tendency to admire ‘smart play’, that is, ruthlessly clever and effective maneuvers. The best crime bosses are masters of ‘smart play’. In order words, they are smart alecks.

What is fascinating is how often (particularly in the massed punditry of elite global media) a capacity for smart play by political leaders is glorified. Leaders are routinely judged and compared with regard to whether or not they appear to shape the game, determine events, or impose their will on others and so on. If they do not seem to do that, they are dismissed as effete. If they seem to do that, they are admired and glorified.  What is particularly striking is how often the writers who say these things leave out ethical standards. I believe, for instance, that true evil is a willingness to act without ethical considerations. Yet, notice how often leaders are admired for ostentatiously clever play even if the methods are odious.

But I am interested in a much narrower question. And it is this: if we leave out ethical considerations, is a reputation for ‘smart play’ good for a leader? Does it make her more effective?  To throw this into bold relief, I am going to tell two kinds of stories- one domestic, and the other global.
 

Quote of the Week: Mary Midgley

Sina Odugbemi's picture

"There is this increasing faith that physical science is the answer to all our terrible questions. I want to fight against the whole idea that it is where you go to for enlightenment.”

- Mary Midgley, an English moral philosopher, who strongly opposes reductionism and scientism and any attempts to make science a substitute for the humanities. She is well-known for her work on science, ethics and animal rights.

Weekly Wire: The Global Forum

Roxanne Bauer's picture

These are some of the views and reports relevant to our readers that caught our attention this week.


Three reasons investors are beginning to take sustainability seriously
The Guardian
Most of the ingredients for a healthy, secure, and fulfilling existence come to us from nature. Food, clean water, pollination, and natural hazard protection are all essential goods and services that underpin our economy and secure our wellbeing. But business models that exploit these benefits unsustainably are intensifying pressure on our planet's natural resources, putting their future – and ours – in jeopardy. How can we relieve this pressure before it is too late? As a first step, we need to recognise that rapidly declining natural systems are bad news for business. There is a two-way street between the economy and the environment: businesses damage the environment, and the damaged environment then creates risks to the bottom lines of businesses. But why should members of the investment community care?

Does transparency improve governance? Reviewing evidence from 16 experimental evaluations
Journalist's Resource- Harvard Kennedy School
The idea that transparency can make institutions more effective and provide greater accountability and better results for the public seems uncontroversial on the surface. But scholars and bureaucrats who have been involved in the wave of transparency initiatives over the past decade continue to debate the particular merits of various approaches. Some commentators have been troubled that as a reaction to scrutiny, malfeasance and inefficiency could increasingly be kept hidden and transparency could erode public trust in institutions and personal privacy. The many types of transparency initiatives around the globe are often confused, making sharp distinctions all the more essential.

The Things We Do: Would You Steal for Me?

Roxanne Bauer's picture

When people talk about saying “no” the discussion usually revolves around why we find it so difficult. We want to help, we don’t want to make the other person feel bad, we are afraid of confrontation, we might feel guilty... the list goes on.  There is usually a chapter on ‘saying no’ in self-help books, and it’s a popular topic for religious leaders and psychologists. They claim that we must be assertive, value ourselves, defend our rights, and seek relationships with healthy foundations.

But there might be a more intrinsic reason why saying no is so difficult: humans are social creatures and are inherently vulnerable to the suggestions of others.

Many of us assume that the favors we ask of others will only be granted if the other person feels comfortable with them, but we fail to realize that simply by asking we are influencing the other’s actions and willingness to oblige.  We don’t consciously think about the degree to which we take cues from other people.

This leads us to underestimate how much power our neighbor who asks us for favors has or the amount of influence we, ourselves, have when we give advice to a relative.  We ask favors and give advice without realizing that the person listening will, more often than not, take what we say on board. We agree to things and we say yes because we are unaware of how easily influenced we are.

So what happens when someone asks a favor that is unethical? Do we realize how easy it is to convince someone, and does this influence our decision to ask for unethical things? Do we recognize our tendency to say yes and do we allow our own sense of morality and ethics triumph?

Quote of the Week: Mary Midgley

Sina Odugbemi's picture

In spite of the huge differences between cultures, all that we know about human behavior shows that it can be understood only by reference to people’s own thoughts, dreams, hopes, fears and other feelings. This is not something invented by a particular culture. It’s universal.”

- Mary Midgley, an English moral philosopher, who strongly opposes reductionism and scientism and any attempts to make science a substitute for the humanities. She is well-known for her work on science, ethics and animal rights.
 

 


 

Of owls, ethics and other matters

Saadia Iqbal's picture

There’s no denying the importance of biodiversity. When scientists, NGOs, policymakers and others try to convince everyone to protect biodiversity, they remind us of how we depend on it for livelihoods, medicines, soil protection and all kinds of other things, big and small.

So, naturally, we as humans have a selfish interest in looking after our world’s plants and animals.


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