The 19th century philosopher Kierkergaard’s quote struck me as a challenge for finance  professionals -  linking existentialism and management accounting.   As our members and students are engaged in informing decision making based on the facts at hand, how best can they ensure that companies progress well, ensuring profitability and success whilst mitigating risk and damage in the longer term.  Not only in relation to the firm,  but to society at large, and to themselves personally.

The quote was the preface of a play I saw over the weekend, the Faith Machine [1], which was exploring “faith and the free-market in the modern world”, so not quite Mary Poppins [2] (but there may be some similar lessons from her too, not least on banking).  Highlighted was the relationship between Sophie, the idealist daughter of an Anglican bishop and Tom a New York based ad agency copywriter, chasing a pharmaceutical account that had been exposed as having tested new drugs on Ugandan children, with fatal results.  Tom’s job was to PR their way out of it. 

“The real world is harsh and cruel and full of compromise"   "..ethics are obsolete and archaic” argues Tom.  And Sophie responds  “How do you feel in your heart about helping this company promote an image of itself which is at the very least dishonest" , or  even "abetting a criminal” in the crimes of “murder, perjury and corruption”.  As one can imagine the romance did not blossom and there was no Mary Poppins ending. 

The core question, that Sophie demands of  Tom, “Who are you?” had been the nature of a recent discussion I had with a senior executive of a global  Indian company.   He was curious about what stopped people from acting unethically: the law, others’ views, company policy, or, as in his case, their conscience.  “How could I look at myself in the mirror.  Living with myself would be hard, so when I have had to make those choices, it becomes easy.  It may have upset people at the time, but that passes.  A moment of indiscretion may stain me.  And those around me”. 

Sadly my belief is there are people who are quite comfortable in tolerating, abetting, or even orchestrating wrong doing in their corporate life.  Is it personal greed, power, fear, or just plain “badness” that drives such behavior?  Or a slippery slope with one minor act accelerating .  KPMG’s global findings [3] in relation to fraud show that for the most part is it senior executives, 26% of them Chief Executives that are the perpetrators.  I think of it like calculated looting.  They may feel comfortable with the distance of a siphoned account here, cooked numbers there  - removing themselves from the act at hand – not physically tearing banknotes from their shareholders or colleagues and stuffing their pockets.   Perhaps only understanding fully the effects of their folly once (and if) caught out.  But if not caught  how many truly may have difficulty in their conscience.  What do you think?

My colleague Naomi Smith [4] recently returned from a major management conference where a presentation by Professor Jean-Francois Manzoni [5], of INSEAD particularly inspired her.  It emphasised the connection between high integrity and high performance.  One slide in particular caught my eye and reflected themes in the play.  It referred to “ethical fading” when the ethical aspects of implications of the decision fade away from our mind.  These are most likely to happen when:

• Business” implications are heavily emphasised
• Language euphemisms are used
• Potential victims are numerous and anonymous

In other words we can de-sensitise ourselves from the consequences of our actions. Business ethics are ever more important, yet can only be upheld by individuals.  They in turn are likely to lend themselves to acting ethically in an environment that promotes and demands such behaviour.  This minimises “ethical fading”.  And  maximises long term success. 

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Our current survey on ethics and ethical culture builds on research [6] from 2008 and will be accessible on our ethics homepage [7] on 3rd October.  We value your views and those who complete it have the chance to win an IPad (16GB wifi only) - click to complete survey [8].

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