Tuesday, 18 February 2014

Ethical not mythical

Over the past couple of years SNC Lavalin, one of Canada's pre-eminent companies operating in the international marketplace, has been found to have acted in a corrupt manner.  Charges have been laid against current and former employees for alleged criminal activities in both Canada and abroad - typically relating to bribery.  The company has already agreed to certain sanctions imposed by the World Bank and more penalties are likely to follow.

Beyond the obvious public relations issues that this kind of corporate behaviour elicits, consider some of the deeper implications that are less apparent at first glance.

  1. When any company participates in illegal, immoral or unethical activities - bribery, price fixing, influence peddling etc. - the message to all employees essentially says "we are not good enough to compete on a level playing field".  Whether the indictment is interpreted about the company's products, services, systems or people does not matter.  The message is the medium.  The workplace is poisoned and employees are embarrassed and disheartened by the fact that leadership has such a low opinion of the company's ability to compete.
  2. When these kinds of activities are known internally they establish the standard for acceptable behaviour for all employees.  While the corruption may be played out at the executive level, the bar is set for everyone.  How is anyone held to account for cheating on an expense account; for taking that extra long lunch; for abusing company benefits etc.  When the line of acceptable conduct is blurred at the highest levels, the implications flow to the deepest levels of the company.
  3. What happens to the opinions of key suppliers?  Will they feel that they have been cheated in their negotiations to supply products or services to the company?  Will they want the speculation that they have somehow directly or indirectly supported the activities of the cheater in order to benefit from future sales?  Will they be concerned about the opinion of other companies that they serve and the potential that these firms will not want to be tainted by association? 
  4. Then there is the attitude of other clients whose business with the offender has been conducted above board.  Unfortunately the same potential to be tainted by association must be considered.  It is only natural that the questions will be asked to determine how wide spread the corrupt activities have spread.  This brings an unnecessary and costly focus on others who must assert and defend their innocence.    Furthermore it will dissuade other companies from considering business with the offender simply because of the optics.
SNC Lavalin and others conducting themselves in a like manner often use the time worn argument that others do it or that this is the customary way to conduct business in the particular market.  Effectively they are justifying their actions through the application of situational ethics.  Whether you operate in a local or in a global market those arguments simply don't hold water.  There are no shades of grey, only black and white.  Just a 2+2 always equals 4, right is right and wrong is wrong.  It is not a case of perspectives.

As my title implies, ethics cannot be mythical.  Ethics are not some unicorn or Cyclops or other fantacy of literature.  Ethics are real, measurable and consistent.  And they hold you accountable.

Too often, for the SNC's of the world, ethics have been found difficult and thus left untried without due consideration of the extent of damage that their choices will inflict.  Don't compromise your leadership role by sacrificing that which is easy to build but almost impossible to rebuild.

1 comment:

  1. Great posting on ethics. Unfortunately, today it has become the norm and not the exception. Be it Wallmart bribing local politicians in Mexico in order to speed-up building permitting, J.P.Morgan and Bank of America settling for billions in the subprime mortgage scandal, stockbrokers being sued for insider trading, even US military personnel cheating on recertification exams, and even closer to home Canadian Banks among others being fined for what you and I would be put in jail for, it has now become "acceptable" to cheat, rape and pillage. I for one do not believe this trend will abate; on the contrary, I expect it to grow and become the "new normal" and soon you will be known as an "outsider" if you do not partake.