‘Hear no evil’ – how typical corporate communication leaves out the ethics

Evidence from the 2018 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was not the first and won’t be the last revelations of unethical behaviour in business. In fact, it’s been a busy few years for anyone interested in business ethics.

We have seen the Panama Papers and Unaoil scandals play out, the muddied relationship between Clive Palmer and Queensland Nickel (who was in charge of the company, really?), managers falsely inflating earnings at Target and an admission of fraud by a senior manager at Seven Network.

Ethical issues involving accusations of dishonesty, bribery, corruption, fraud and theft are, sadly, never too far away from the news. Sometimes that ethical failure has an easily identifiable cause – someone who negligently steered a course into moral hazard or selfishly set out to do something they knew was wrong. It’s also easy to identify a solution: we deal with those people through education, punishment or both.

But what about those more commonplace ethical slip-ups – the ones that don’t fall into the #epicfail bucket or make headlines, at least not immediately? Where it’s not so easy to find a guilty person in need of punishment? It’s useful to think of these as instances of ethical drift – where an organisation unconsciously drifts away from its ethical True North.

How does ethical drift happen?

A big factor could simply be the way people communicate within an organisation. Ethical context, insight and commentary is easily lost in day-to-day business communications, and it can happen in a number of ways:

The ethical framework is nowhere to be seen

Most organisations have a mission statement about their purpose, values and principles, which is expected to provide the overall direction for the company. But this ethical framework is rarely localised or given the same status as other performance indicators. That makes it hard for people to stand back and assess if, for instance, a change management project is on track to reinforce the organisation’s values as well as meeting other objectives.

Emphasis on short time periods

Internal reporting is time-driven. The emphasis on monthly, quarterly or yearly figures makes it seem irrelevant to include commentary about longer term ethical symptoms or effects. As a result, the ethics of an activity are not assessed with the same regularity and urgency.

Managing up

Managers do manage up. As reports go up the line they narrow the focus of the reader and set the agenda for what might need to be understood. Such reports tend to leave out any information that might go against the usual approach or beliefs, be unclear or prompt questions. On one hand – fair enough. Who wants to get a management report and be confused? But the downside is that the reader might be being well managed toward a certain conclusion rather than being well informed.

The glut of communication

We are drowning in information, so wherever possible reporting is abbreviated and metricated. Qualitative assessments are expected to be backed by hard figures and compared against something – a benchmark, a previous period or a competitor’s results. Assessing whether an organisation is still heading in the right ethical direction isn’t something that lends itself to metrification. And if a report’s format doesn’t include a space for ethical insights, it sends a signal that it’s not important or welcome.

Misplaced emphasis on annual staff surveys

Whether an organisation is on course for its True North is often determined by an annual staff survey. Frequently, such surveys ask people to put a numerical score (say, one to 10) on how well their team lives the ethics of the organisation. This can act as a quick point-in-time morale check, but it hardly lets people question an organisation’s accepted norms. It takes an extra level of sophistication for an organisation to change its routine reporting to capture ethical insights and measures, and to put them on an equal footing with routine performance measures.

For organisations to function at their ethical best, they need to have proactive, fearless but humble debate. But it’s hard to foster debate in an environment where reporting tools are very narrowly defined and don’t link back to the organisation’s ethical framework.

Instead, organisations need a culture where questioning is not treated as a ‘gotcha’ opportunity. Where leaders welcome information that indicates all might not be simple and rosy. Where ambiguity creates interest rather than fear. And where numerically insignificant data or exceptions are not confused with ethical insignificance.