Digging into ethics: building--or rebuilding--trust in your organization goes deeper than banning conflicts of interest.
Conflicts of interest are at the heart of ethical dilemmas. A conflict of interest is a situation in which the decision maker has two or more competing interests. Association leaders can count on facing conflicts or dilemmas on a regular basis. This article suggests a number of ideas for developing methods to identify, analyze, and resolve the dilemmas that they will face.
Identifying ethical Dilemmas
Taking ethics seriously requires more than simply doing good and avoiding evil. Even when association staff and members resolve to "do the right thing," challenges remain. Often association professionals face right-versus-right situations. Such ethical problems require a choice between two equally correct courses of action.
The Web site at www.friesian.com /dilemma.htm provides a menu of classical ethical dilemmas. Further, Rushworth Kidder of the Institute for Global Ethics, Camden, Maine, has organized ethical dilemmas into four basic categories:
1. Truth versus loyalty. Consider a dilemma that pits truth against loyalty. Association professionals are often privy to industry truths or abuses within their industries long before the public is aware of them. Should an association professional ever reveal his or her industry's shortcomings? For example, what should the leaders of an agricultural association do if they discover that current methods of livestock production might threaten the public's access to safe water? Because release of the information might injure association members, shouldn't loyalty to members cause the leaders to keep their concerns to themselves? Or should they play the role of whistle-blowers and share what they know with regulators or others who could address the possible threat? Both courses of action are, in different ways, right. The real question is, "How should an association member go about resolving such an ethical dilemma?"
2. Justice versus mercy. When association members break their group's code of ethics and harm their colleagues, how should the association respond? Suppose a member violates a confidentiality agreement by revealing embargoed information. Once the deed is discovered, should the culprit be expelled or given another chance? Justice demands some sort of punishment. But by extending mercy and maintaining his or her association membership, the organization might be able to reform the offender and restore unity within the group. Which right should guide association leaders in this case--justice or mercy?
3. Short term versus long term. Suppose an association has an opportunity to reduce dues by drawing down its reserves. Some association leaders will likely object to operating the organization with savings rather than current revenues, arguing that the future benefit of financial stability should not be sacrificed to create current member benefits. They will maintain that today's members must sacrifice to secure the association's future. Other association leaders will disagree. They will argue that this is the time to put the group's savings to work despite the risk to its future. How should the dilemma he resolved?
4. Individual versus community. Should a member support his or her association when it takes a position that is not immediately in his or her best interest? Should individual members maintain their association memberships when the larger group rejects key policy positions that they prize? On the surface, it's not wrong for individuals to look out for themselves. Where would associations be without healthy individual members? On the other hand, our conscience tells us that sometimes the good of the whole requires the sacrifice of a few. When the interests of individuals tangle, which interest should prevail--that of the individual or that of the community ?
Analyzing and resolving ethical dilemmas
The association professional need not confront such ethical conflicts alone. In fact, association leaders need policies that encourage, if not require, peers to bring dilemmas to one another's attention. Dilemmas are most easily seen when they affect someone else. Rationalization can prevent even the noblest person from recognizing his or her own conflicts of interest.
Associations should adopt ground rules that require members to point out dilemmas or conflicts of interest. Associations cannot deal effectively with conflicts simply by prohibiting them. It's not a question of whether conflicts will exist. It's a question of how to deal with them whenever they arise.
Help in thinking through ethical dilemmas can be found in many places. For example, on EthicsWeb at www .ethicsweb.ca/guide, Professor Chris MacDonald, of the department of philosophy, Saint Mary's University, Halifax, Nova Scotia, Canada, offers a method that can be used to consider and resolve ethical dilemmas. MacDonald's terminology has been simplified here.
Ask, "Is this really a dilemma?" Some conflicts are apparent but not substantial. For example, a leader learns that his association has a job that his son might be able to fill. He wonders whether his loyalty to the association (and its no conflict-of-interest commitment) means that he cannot commend the job to his son. Before the analysis goes too far, the leader should check to see whether his son is interested in the job. This Factual inquiry is important, for if the son has no interest, no dilemma is facing the association leader.
Decide who has an interest in the situation. Take, for example, the case of a loyal association employee whose traumatic divorce has caused a serious decline in job performance. The situation involves employer and employee. But it also involves association members who deserve better service than they are getting. If the supervisor identifies other staff and association members its stakeholders, it becomes apparent that the employee's performance has a ripple effect. Acknowledging the full extent of the threat can make it easier to justify taking action (perhaps even firing the individual) to remedy a situation that initially appears to involve only one person.
Determine what values are involved. List as many as apply. Which of those values are dear to the one making the decision and to his or her organization? The values of honesty integrity, and service are common to associations. But the values of loyalty, tradition, and innovation are also powerful criteria for ethical decision making.
Brainstorm solutions. What are the benefits and the burdens of each possible solution? One often overlooked and rather simple solution is patience. If no one is being seriously harmed by the situation, the passage of time can satisfactorily resolve many dilemmas.
Look for analogous examples. How is the present case like others? How is it different? Most ethical dilemmas have been faced before-likely by previous leaders of the group. Association professionals would be well served by keeping a careful record of association-based ethical decision making and maintaining familiarity with the association's history, perhaps through minutes of past meetings. What parallels do association veterans remember? Are sufficient reasons viable to make a different call in the present case?
Discuss your preferred solution with an ethically savvy person who is not directly involved in the situation. The only way to compensate for our inherent subjectivity is to seek the opinion of an independent party. The other party will be affected by his or her situation, but it will not be the same situation as that of the primary decision maker. By consulting with others, the person faced with a challenging decision will have the benefit of a variety of perspectives. That's the next best thing to objectivity.
Ask, "Am I comfortable with this decision?" Rely on intuition as a check on your analytical decision making. Sometimes decision makers are encouraged to imagine that the decision is reported on the front page of the newspaper. The notion behind this challenge is that human beings often fool themselves by a process that psychologists call rationalization. Rationalization is the use of logic to, as columnist George Will once said, "get to a conclusion and stay there." The hollowness of the logic, however, is apparent when one re-examines the decision using intuition.
The failed model and new Approaches
Like many American industries, some associations have tried to deal with ethics in conventional ways. Staff and members may be issued a code of ethics generally requiring conduct "in accordance with the highest ethical standards." The codes state the obvious: People ought to behave themselves. Sometimes codes go even further and state the impossible; for example, that conflicts of interest should be avoided. But conflicts of interest and ethical dilemmas are part of the very fabric of life. Instead of simply telling people to avoid them, organizations should show members and staff how to deal with ethical challenges.
News stories about corporate and association moral failures show that the traditional approach to ethics has had limited effectiveness. A new approach is necessary because the world has changed, a fact noted by the Harvard Business School. For more than a decade the Harvard Business School required its first-semester MBA students to register for a class called "Leadership, Values, and Decision Making." But after the downfall of Jeffrey Skilling, Enron's chief financial officer and a Harvard graduate, the school added a new ethics course called "Leadership, Values, and Corporate Accountability." Business School Dean Kim Clark explains, "Our commitment to educate business leaders who have ethical values hasn't changed, but the society out of which our students come has changed."
Recently the Illinois Community College Trustees Association, Springfield, chose a new approach to help bring about a higher level of ethical decision making. One element of that approach is a collaboration involving the Illinois Community College Board, Springfield, as well as college presidents, faculty, and students to address "Leadership and Core Values." Convinced that today's world is too dangerous to navigate without a moral compass, community college leaders are sponsoring state and national conferences developed from content based on this collaboration.
The price of unethical practices
In the association world, ethical scandals have lost associations both membership and external support. According to The Philadelphia Inquirer (February 6, 2003), "eroded trust" has reduced support for many American charities. Almost 40 staffers from eight regional United Way offices were dismissed after financial irregularities caused a drop in contributions.
Ethical problems of some major associations may soon attract the attention of Congress. Federal lawmakers have already targeted private corporations. In 2002, Congress passed the American Competitiveness and Corporate Accountability Act, known as the Sarbanes-Oxley Act. It subjects American companies to a number of new governance requirements. W. Warren Hamel's "What Corporate Governance Legislation Means to You" (ASSOCIATION MANAGEMENT, March 2003) outlines the demands of the Sarbanes-Oxley Act on private corporations and their officers. Hamel properly suggests that not-for-profit organizations can learn from the requirements of Sarbanes-Oxley. The new law generally prohibits personal loans from the corporation to directors or executive officers. Auditors are now warning nonprofit organizations to avoid senior executive compensation packages involving special incentives such as a relocation loan or allowance. In February, the board of trustees of Drexel University, Philadelphia, voted voluntarily to include compliance with Sarbanes-Oxley in its bylaws. "We felt that we should be on the leading edge of ethics," says Board of Trustees Chair Chuck Pennoni.
Many associations already have taken a closer look at the board's fiduciary responsibilities, revamping finance committees and making sure audit committees are functioning effectively. In "Enron-Proof Oversight" (ASSOCIATION MANAGEMENT, August 2002), Charles F. Tate recommends that audit committee members be free of financial ties to the organization. Tate also suggests that members of the audit committee be knowledgeable about corporate finance and that the organization have a code of ethics.
Clearly, something more than the conventional approach to ethics is needed. Enron failed to benefit from its 64-page ethics code and an audit committee that included a retired dean of business and the former chair of the Commodity Futures Trading Commission. What Enron did not have was a policy requiring board members to raise ethical issues whenever they had questions. Nor did Enron's board request the advice of independent third parties. In short, Enron was long on code and credentials and short on practical processes and policies that would have averted disaster. The lesson is clear: To avoid ethics scandals, organizations must find ways to make genuine ethical decision making an essential, automatic part of their operations.
Making ethics intuitive
Association leaders who want to dig into ethics and make ethics an intuitive part of their organizations should consider three initiatives:
1. Decide what ethics is and what ethics is not. What is the ethical thing to do? The answer can be difficult because individuals' values, cultures, and situations may be different. Nevertheless, ethical debates are as old as humankind, and there is some consensus about what constitutes ethics.
Ethics is more than obeying the law. Many people mistake legality for ethical propriety. The Sarbanes-Oxley Act and other efforts by government in enforce ethics may actually contribute to this misunderstanding. An action can be legal yet unethical. The opposite is also true. When ethical issues arise, association members and staff often turn first to the organization's attorney for advice. If the attorney responds that the actions in question are not illegal, leaders should ask themselves, "Are the actions ethical?" For example, an association board may be on solid legal ground when it retains an external auditor who is the board chair's brother-in-law, but is the action ethical? Would the auditor feel free to report fiscally irresponsible conditions caused by the actions of a close family member?
But legal compliance by itself does not create an ethical culture within the association. Lord Moulton, a 19th-century English jurist, summed up the relationship between law and ethics when he said ethics is "obedience to the unenforceable." More than 2,000 years ago, Plato established that ethics can function without the protection of laws. In his Republic, Plato describes his teacher, Socrates, persuading his friends that humans ought to act ethically even when they are granted immunity from punishment. Ethics and ethical thinking are broader than legal issues and legal thinking.
Laws grow out of the ethical convictions of the people who enact them. Rather than being an extension of the law, ethics is the law's root or foundation. For example, in the abolitionist movement of the 19th century and the civil rights movement of the 20th century, laws changed only after society's ethical norms were transformed. These examples show that ethical decisions have the power to change behavior even though they are not legally enforceable.
Some associations have ethical codes with enforcement mechanisms. Concerned about the legal liabilities that such enforcement mechanisms create, other associations have decided not to engage in enforcement. Whether or not the association attempts to enforce its values and codes, it can encourage ethical thinking and behavior.
Ethics is not a fad. In the New Yorker cartoon (March 30, 1992), a CEO glowers at a contract and growls to his assistant, "Have you noticed ethics creeping into these deals lately?" the executive seems to think that ethics is a passing fancy. But values questions have always been a part of life. Traditionally economics is a branch of moral philosophy. Although ethics may now seem to be in fashion, moral issues have always commanded the attention of serious writers, leaders, and politicians.
Ethical behavior often exacts a high price and requires a change in behavior. Although an association's values can develop pride and self-respect in the association, ethical behavior cannot be expected to produce measurable, positive results in the organization's bottom line. Legendary baseball manager Leo Durocher was partly right: Sometimes "nice guys finish last." Although society sometimes honors its heroes, more often they are overlooked by their contemporaries or even persecuted. Consider Socrates, Gandhi, and King. Before digging into ethics, association leaders ought to ask, "Are we prepared to pay the price?" and "Do we have the will to act accordingly?" Everyone must ask, "What will I do when others fail to recognize or reward a commitment to principle?"
Ethics is partly a matter of getting the facts straight. Ethical bungling can result from a failure to comprehend the situation. Strong values misapplied because of a faulty understanding of one's circumstance can be a recipe for moral disaster. When the American Red Cross raised funds for the 1989 San Francisco earthquake relief--and more recently for 9/11 victims--while planning to use some of the money for other causes, donors were misled. The organization failed to get its facts straight in its communication with donors. The result was a collapse of trust.
Ethics is more than everyone doing his or her best. The death this past winter of Duke University Medical Center transplant patient Jesica Santillan illustrates the problem of thinking that good people can overcome bad systems. The people at the organ bank that Santillan's surgeon used all assumed that the other had matched the blood type of the donated organs. Nobody had, and Santillan died. She died not because of the moral failure of any one individual. She died because of a flawed system.
Association leaders can begin by recognizing the importance of systems and social structures. The Harvard Business Review's collection "Boards Under Fire" indicts not individuals but organizations. They are cited for failing to create a climate of trust, candor, and accountability. Harvard editors note that organizations often fail to require leaders to "challenge one another and unearth the truth."
Without sound processes and systems, associations will experience ethical failure even when everyone within the organization is trying to do his or her best. No snowflake, one wit observed, ever thinks it is responsible for the avalanche. The collective power of the community often outweighs individual attempts to do the right thing.
Recognizing that many ethical issues cannot be resolved through the efforts of individuals, association professionals must turn their attention to their organization's structure. Boards should ask themselves the following tough questions:
* How does the association assign responsibility? Are the parties responsible held accountable?
* Does the organization re-examine its own structures regularly? Does it look for ways to safeguard fairness, honesty, caring, and other commonly prized values? Association members and staff must be challenged to live up to a high standard. But their organizational system must also pass ethical muster.
* are work rules fair? Are they clearly communicated to those they affect? Or are they--perhaps inadvertently--composed and applied in a way that unfairly favors some and punishes others?
2. Gain the commitment of the entire organization. Commitment comes hard. Mere talk about ethics can make people uncomfortable. The threat can be reduced by letting people know that they are not targeted. Admitting that the subject may be threatening can enhance the productivity of ethical discussions. Ethics is intensely personal, and no one is comfortable being the target of others' judgments. On the other hand, human performance is rooted in self-concept and understanding. Everyone would like others to understand their values and deepest longings. Association leaders will be willing to dig in if ethical discussions can help others develop an appreciation for who they are.
Once they are engaged in ethics discussion, association leaders and members open themselves up to the possibility of being changed. Adults learn best by getting involved. While abstractions and theories appeal to younger learners, the real world holds more attraction for association leaders. The use of case studies can encourage a real-world approach to ethics. Case studies can dramatically illustrate the moral dilemmas that bedevil associations, their members, and stale Association leaders should consider posting relevant case studies on their Web sites. Names can be changed to protect the people and organizations involved.
3. Teach association staff and members to recognize and resolve ethical issues. To Our newest member of the family lets you have it all--right in the middle of one of the country's best locations. The new Radisson Plaza Hotel, adjacent to the Myrtle Beach Convention Center offers you convenient accommodations adjoining incredible meeting space.
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And when you choose Myrtle Beach, you've caught it all--ingrain a commitment to ethics in its members, the Illinois Community College Trustees Association facilitates ethics retreats for its members and for other associations. Ethics retreats strengthen the bonds of trust among board, staff, members, and clients of participating associations. Participants review the high stakes of organizational behavior, fine-tune organizational values, and discuss ethical issues they may be facing. Through deliberating on case studies, they acquire tools for resolving their own ethical dilemmas.
Retreat leaders use an ethics-audit template to probe for specific organization issues. When the audit identifies problems, solutions are explored. Solutions usually are related to processes rather than ethics codes. Codes may prohibit conflicts of interest, but unless someone--often a third party--who discerns a conflict of interest is constrained by a reporting process, conflicts may go unchallenged. If the process obliges board members, as a condition of their participation on the hoard, to point out possible conflicts, they will be more likely to raise such issues.
Help is readily available for association leaders who decide to make ethics an essential component of their organizations. Kidder's Institute for Global Ethics trains teams to prepare employees to deal with ethical dilemmas and offers "Ethical Fitness Retreats." Michael Josephson's Josephson Institute of Ethics in Los Angeles (www.josephsoninstitute .org) has broad experience in ethics training with public and quasi-public organizations and is well known for its "Character Counts" campaigns. The Greenleaf Center for Servant-Leadership in Indianapolis (www.greenleaf .org) carries on the work of consultant and author Robert K. Greenleaf; emphasizing novel approaches to openness and trust building. All three organizations have qualified facilitators across the nation who can help associations meet the challenges of ethics issues.
We live in a skeptical age, and our ability to trust weighs in the balance. Government leaders have deceived us. Television networks and newspapers have apologized for misleading viewers and readers. Major corporations have filed false financial statements. Teachers and clergy have abused students and parishioners, If trust is to remain the strength of our social fabric, we must take positive steps to demonstrate a commitment to ethical behavior. With the policies and processes that their associations adopt, leaders can rebuild trust. When we gain the power to deal with ethical dilemmas, we strengthen our society's capacity for effective ethical decision making.
CONDUCTING AN ETHICS AUDIT
One way to establish a framework for digging into ethics is to conduct an ethics audit. The Illinois Community College Trustees Association, Springfield, developed an ethics audit format for a session al a nationwide conference for schools and colleges last year. In the course of the audit, leaders answer the following questions to determine their organization's status and prepare to better equip and guide their own boards:
* Does the organization have bylaws?
* Are the bylaws easily accessible to members?
* Do the bylaws clearly explain the association's purpose? Whom is the association to serve?
* Do the bylaws ensure accountability? Do the bylaws require association leaders to evaluate the organization's performance? Do they require that the organization's performance be weighed against its cost?
* Do the bylaws provide a fair and open opportunity for members to rise to leadership positions within the organization?
* Do the bylaws prohibit unethical and inhumane treatment of members, staff, and clients? Do they require that the board examine the association's relative level of success in protecting members, staff, and clients from unethical or inhumane treatment?
* Do the members have a working knowledge of the bylaws? Do they know what their options are if they have an ethical concern about the association's operations?
* Are those who raise concerns protected from reprisals?
SEVEN ACTIONS TO INCREASE ETHICAL SENSITIVITY
Now is the time to dig into ethics. Here are some ways to do so.
* Recognize that ethical issues often cannot be solved by legal solutions.
* Resolve to move beyond shallow moralism to something meaningful and challenging. Seek reliable guidance from national organizations experienced in ethics.
* Examine your organization's bylaws, Make sure they contain built-in checks and balances that ensure ethical behavior.
* Study your association's values.
* Encourage the board to publish a statement of values.
* Organize practical and relevant training for everyone from the chair of the board to the newest member. Expect everyone in the organization to develop skills for clear and consistent ethical thinking.
* Remind everyone within the association of its original noble purpose, and challenge everyone to contribute to the association's ethical legacy.
TUNE IN TO ASAE'S ETHICAL FITNESS TRAINING SEMINAR
Don't miss ASAE's upcoming virtual seminar "Get Ethically Fit" scheduled for Wednesday. October 15, 2-3:30 p.m. eastern time. Presented in conjunction with KRM Information Services, Inc., the program will outline a framework for making ethical decisions and walk you through its practical application to the dilemmas you and your organization may face. Gary W, Davis. CAE, president, Illinois Community College Trustees Association. Springfield, and a member of ASAE's Ethics Committee, teams up with Bruce Conners, vice president of educational services at Kaskaskia College, Centralia, Illinois, to explain how volunteers and staff can learn to define their values, discover ways to formulate group value statements, and use these skills to identify and resolve ethical issues, Conners, an ethicist trained by the Institute for Global Ethics, Camden, Maine, joins Davis to help you come away with a well-researched and tested method for instilling ethical thinking into your association's culture.
The registration fee for ASAE members of $179 (and $279 for nonmembers) includes one telephone connection; one Internet connection; a set of audiotapes: and one CD-ROM, which includes the audio and visuals of the presentation. To register, call 800-775-7654 Monday through Friday from 7 a.m. to 5 p.m. central time, and request program code ASE7799-0; or register online at www.krm.com/asae
Gary W. Davis, CAE, who holds a doctorate in religion and ethics from the University of Iowa, Iowa City, is president, Illinois Community College Trustees Association, Springfield, and a member of ASAE's Ethics Committee. E-mail: firstname.lastname@example.org.
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|Author:||Davis, Gary W.|
|Date:||Oct 1, 2003|
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