Much has been said over the last several years about business ethics. The reasons are obvious: high profile corporate scandals and abuses that have grabbed the public’s attention. My concern, in the midst of this media blitz and legal chaos, has been on how much attention has been given to compliance as a remedy for ethical lapses and how little attention has been focused on integrity.

Steven Greisdorf

Much has been said over the last several years about business ethics. The reasons are obvious: high profile corporate scandals and abuses that have grabbed the public’s attention. My concern, in the midst of this media blitz and legal chaos, has been on how much attention has been given to compliance as a remedy for ethical lapses and how little attention has been focused on integrity.

Compliance without integrity is a façade, a charade. It is a house built without a foundation which will not stand when challenged by situations and circumstances not prescribed by rules. Compliance thrives on a fear-based culture that keeps people in tightly controlled boxes of activity. Out of this fear, carefully contrived risks emerge: How close can I come to the rules without technically breaking them? Or, how can I maintain the letter of the law, even if I am not in keeping with the spirit of the law?

By directing our attention to business ethics or to compliance, we miss the point. As John Maxwell, noted American author and speaker has said: “There is no such thing as business ethics. Business can no more practice ethics than it can drive a car. Business, or more precisely, the corporation, is a legal creation of convenience. It is the people who run businesses to whom our focus should be directed. People practice ethics; businesses do not.”

So how do we swing the conversation around from the abstract world of business ethics based on compliance to the much more significant, meaningful and frankly painful subject of ‘people ethics’ based on integrity?

When talk about ethics moves away from compliance and towards the individual, we often hear that we are opening a Pandora’s Box by imposing a set of values, morals or standards upon those who may not believe or perceive the world in exactly the same way. As long as we stick with the rules or the laws, they say, we won’t interfere with people’s personal beliefs. Is this a valid argument? The problem is that the world and the business environment are not static. Changes occur daily, bringing with them new conditions which require more than rules. Rules can’t address every eventuality. Even if they could, the complexity required would be beyond most of our capacities. With this being the case, what is the alternative?

I would suggest that more attention should be given to developing and nurturing the habits of integrity which should undergird the compliance-based corporate culture. Building this habit is like developing one’s muscles: it takes discipline, it takes practice, and it takes time.

Yale University law professor Stephen L.Carter, in his book, Integrity, defines integrity as ‘the courage of one’s convictions.’ So as to prevent someone from saying, “Well, my conviction is to steal from my company.” Carter goes on to describe a three-step process for identifying whether someone is acting out of integrity:
1) discerning what is right and wrong;
2) acting on the discernment; and
3) saying openly that you are acting on your understanding of right and wrong .

By itself, this three-step process will not keep someone from stealing from a company; however, it will allow those in the company to determine whether someone whose conviction is to steal from it should be allowed to stay.

In his book, The Ethical Executive, Donald V.Seibert, former CEO and Chairman of the Board of JC Penney Company, said this: “Among the people I know at the top of the nation’s major corporations, the personal quality that is regarded most highly is a solid, unwavering sense of integrity. The higher a person moves up in business, the more important it is for his peers and superiors to feel they can depend on his word.” Having heard directly from employees at both Enron and WorldCom, it is my perception that neither a culture based on integrity nor leadership based on one’s word was present in either of these corporations.

Can we envision a business environment built upon principles of personal integrity and not dependent upon compliance? What will it take to get us there?

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Building this habit is like developing one’s muscles:
it takes discipline, it takes practice, and it takes time.

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I believe that what we need to begin nurturing in workplaces and business schools is the concept of the ethical entrepreneur. Entrepreneurs are afforded a special place in society. They are risk-takers. They are renaissance people. They have ideas that they are convinced need to be developed in order to meet a perceived need, either commercially or socially. Add to this the concept of integrity and what you create are people of moral courage, convinced that putting practical ethics to work is essential to the success of either a social or a commercial venture.

Ashoka, the well-known social development organization, lists ‘ethical fiber’ as one of the key criterion in selecting fellows for its program. Why? Because Ashoka knows that trust – the corner-stone of ethical fiber – is essential for building net-works, selling ideas, and encouraging and sustain-ing supporters. In How to Change the World, David Bornstein highlights nearly a dozen Ashoka fellows who exhibit characteristics of not just social entre-preneurship, which is what the book is primarily about, but who also demonstrate integrity, a whole-ness that is not distracted by circumstances nor deterred by those who would seek to undermine their efforts.

Over the last fifty years, MRA-Initiatives of Change, through its outreach to the business community, has sought to motivate ethical entrepreneurs. By encouraging discipline – listening to God, the inner voice, or conscience on a daily basis – and by providing a set of absolute standards by which one can discern whether one’s actions are right or wrong. IC has developed a cadre of individuals who believe and act on the idea that change in the world, including in one’s workplace, begins with one’s self. Examples of individuals who have put these practices to work with notable success abound, from auto manufacturing executives in France to high-tech executives in Japan to agriculturalists in Africa.

I began putting these practices to work in my own life over a decade ago. During that time, I have found myself leading change initiatives in a large multi-national institution, in a small, self-run business and in a non-profit organization. I have found that listening, reflecting, and discussing what I have discovered during my discernment process has helped me to engage more effectively and perhaps with better results in business decisions, career choices, how my wife and I raise our children, and how we set household priorities. Each activity involves its own set of rules, its compliance issues, but each functions and thrives based on personal integrity.

Can a workplace built upon integrity eliminate the lapses in ethical behavior that we have witnessed of late? Probably not. But what we might discover is that as individuals act out of a sense of integrity, they will motivate similar behavior in those around them. It seems to me that this would create a more nurturing workplace environment than one based simply on following the rules or trying to get around them.

Steven Greisdorf is the Director of Caux Initiatives for Business and is based in Washington, DC. This article first appeared in Disha (India), Vol. 7, No. 4, July 2004.