Don Blankenship, the former CEO of Massey Energy, was recently convicted of conspiring to violate federal safety standards. Blankenship’s actions are believed to have created the conditions that led to the explosion that killed 29 people at the Upper Big Branch coal mine in April 2010.
Volkswagen is in the news again and not for the best of reasons. Headlines speak of the ‘flubbed apology tour’ of the new CEO, Matthias Mueller, who recently declared in an interview with National Public Radio (NPR) at the Detroit Auto show that, while the company’s actions may have ‘let down’ customers, regulators and the public, Volkswagen did not lie or mislead U.S. officials.
Every day, another axe seems to fall with the scandal at Volkswagen, as news reports unveil new victims and layers of the investigation. Unfortunately, this is just one more example of unethical behavior at an organizational level: regulators allege that Volkswagen circumvented environmental regulations by manipulating the software that measures emissions on hundreds of thousands of automobiles.
As someone who is very interested in how leaders can build and maintain an ethical culture based on shared values, one of the challenges that is often raised is how (and IF) this is possible in a work environment comprising multiple generations.
The 1971 Stanford Prison experiment was originally designed to investigate individual behavioral responses to the experience of the prison environment. It is back in the news on account of the release on a new film which dramatizes the events.
I hosted an event where the participants were composed of compliance professional in the financial services industry. As an ‘ice-breaker’ I asked each one to provide me with an example of an action that was an ethical violation, but not a compliance violation. In other words, I wanted examples of actions that could be considered a ‘failure of ethics’, but not a failure of compliance. It turned not to be a pretty unsuccessful ice-breaker since most people could not come up with a single example.
It is important not to fall into the trap (often attributed to academics) of elegantly describing a problem without offering anything in the way of a solution. Let’s think about a solution in terms of the three legs of the Fraud Triangle (1) Pressure (2) Opportunity (3) Rationalization that we discussed in the last post.
While the Fraud Triangle is well-known concept in the accounting industry, I have not seen it used to describe acts of fraud in the financial services industry and I thought it would be interesting to take a closer look.
In June 2014, the Chancellor of the Exchequer and the Bank of England announced the formation of the “Fair and Effective Markets Review” (Review). The impetus for the formation of this committee was to respond to: “The scale of misconduct seen in recent years [that] has both damaged public trust and impaired the effectiveness of these important markets. The lack of firm governance and controls, acceptable standards of market practice and a culture of impunity all contributed to a process of ‘ethical drift’, leading to huge fines, reputational damage, diversion of management resources and the reining in of productive risk taking.”
The Cary M. Maguire Center for Ethics in Financial Service has been privileged to receive funding for a Cary M. Maguire Fellow in Applied Ethics since 2009. In 2015-2016, the Maguire Fellowship will be used to support the research of four young scholars.