Careless Ethics Can Lead To A Culture Of Impunity
When it comes to ethics, anomalies of thinking have a way of coming back to haunt the setting of standards for behaviour in leadership, whether it is in the public or the private sector. In the weeks since Greensill Capital, the supply chain finance provider, collapsed in the United Kingdom in March, the story has moved steadily and swiftly to the point where it is now clear that it is about the most fundamental ethical issues which are facing the U.K. government and its interaction with business and society.
The Financial Times recently covered the Greensill Saga in its Big Read series with the headline: The David Cameron Scandal: just how sleazy is British politics ? To my mind, this is one of the most important points in the FT article: “And yet perhaps the most disturbing aspect is that it is not certain that anyone has broken any rules.”
If nobody has broken any rules, there is an implied affirmation to the general public that nobody has done anything wrong. But that is where the danger lies. The laid down rules on the revolving door between government and the private sector may be unbroken. Similarly, the rules set on lobbying may remain intact. But that does not mean that no ‘wrong’ has occurred, no harm done, to the commercial ecosystem which relies on trust. There is also the potential impact of this scandal on a large section of working electorate that increasingly struggles to reconcile yet another glimpse of what is perceived as the safe sanctuary of British elitism with its own daily experience of pandemic hardship on top of existing economic inequality.
Also, when rules are operating at a very different time when they were first drawn up, perhaps it is time to reconsider the ethics of behaviour in public service.
It was a story by David Hencke in The Guardian newspaper on 20 October 1994 that broke the ‘cash-for-questions’ scandal. There was clearly no social media to speak of at the time - this version had 14 shares. Yet it was the story that was acknowledged to be responsible for John Major’s request to Lord Nolan to examine the arrangements that govern standards of propriety in public life.
It has been almost three decades since that story by The Guardian. The seven Nolan principles it spawned that should govern behaviour in public life are often referred to, but how many could recite them - and of those, how many of those in leadership positions in public life ever think about them on a case by case basis? Here they are, as a reminder.
The Seven Principles Of Public Life
Selflessness
Integrity
Objectivity
Accountability
Openness
Honesty
Leadership
It is, frankly, quite difficult in April 2021 to see how exactly interaction with “lobbying” can operate within the context of all these principles.
Today, if one considers the need to include urgent new concerns in decisions necessitated by a recognition of the need for climate action, for example, or the demands of global public health, then it becomes even harder. Society’s values have changed substantially since 1995, and perhaps now the principles might consider including ‘Compassion’ or ‘Empathy.’ Meanwhile, the blank page of ‘Leadership’ as a principle seems open to bespoke interpretation to a perilous degree.
The formation of the Committee on Standards In Public Life was hailed as a step change towards the acknowledgement of the need to focus on culture, not mere process, to raise the bar on standards of better governance. But every day we have evidence across public and private sectors to suggest that we are still struggling with culture. This is acutely obvious if one looks at progress on the nation’s ambitions on equality, including gender equality, and on wider diversity and inclusion. It remains, like many ambitions, a work in progress.
The rise of the gig economy also makes it ever clearer that societal values are changing as pressure rises on the availability of economic opportunity. Workers choose one security, while losing another, but work designed for better productivity should not demand impossible trade-offs. And all the time that workers make those choices, they are making statements on what they value - flexible working, paying the bills, family time.
On Board Talk and elsewhere, I have written extensively on ethical issues that involve the gig economy, on worker’s rights and corporate governance, on the need for diversity and inclusion and reflecting on the heightened awareness of ESG issues amid an urgent need for climate action. The search engine on this blog works, while a broader internet search will include my content published on other media platforms.
But I would like to draw attention to a piece I wrote on November 1 2018, on non-disclosure agreements. It was in response to the argument by a lawyer that an NDA is a legal instrument, so it’s neither a good thing or a bad thing in itself. “But that assumes, surely, that it is being made between equals” I suggested, going on to make the point that the real purpose of NDAs should be stripped down to the core and exposed in each individual case, before their use can be justified.
The same thing needs to be done on lobbying and on the ethical reasoning behind its role for desirable outcomes for our socio-economic goals for a broad range of citizen stakeholders.
“Where there is great economic inequality, financial incentives given to sign an NDA are deeply questionable” I wrote on Board Talk, just after MPs had rejected calls to allow a parliamentary debate on NDAs despite two separate petitions demanding a change to the law securing 250,000 signatures.
Four months later, by March 4, 2019, the U.K. government made it illegal to use NDAs to cover up sexual harassment, racism and abuse in a move to protect worker’s rights. “But whether it succeeds in its purpose will in the end depend on changing existing corporate culture” said this blog.
The problem with NDAs has not disappeared, although it has stopped hitting the headlines. In January 2021 the U.K. regulators halted a case against an Allen & Overy partner that was based on his role in drawing up a controversial NDA for Harvey Weinstein. The case was halted on serious medical concerns, as reported at the time.
Last month it was reported that the Solicitors Regulation Authority, the U.K lawyers’ watchdog was probing a record level of complaints received about sexual harassment and inappropriate sexual behaviour at work, delayed further by the pandemic. The SRA said the rise in complaints began in 2017 “sparked by the #MeToo movement, followed the next year by a warning notice from the regulator about the improper use of gagging clauses, or non-disclosure agreements (NDAs)” according to the FT.
The problem surrounding NDAs remains one of weighting the system we create with laws and regulations fairly, and that means assuming a representation of inequality and greater sensitivity to those who appear to have bought into the standards that have been set for leadership. Flouting their concerns after first asking them to buy into the standard setting procedures is an own goal in any bid to grow trust.
Interestingly, too, the Financial Conduct Authority (FCA) has just been ramping up its whistleblower programme to encourage whistleblowers to speak out, suggesting a continuing effort by the regulator to change corporate culture from the outside.
A flurry of U.K. government initiatives over the 12 months - despite preoccupations with the critical task of fighting the pandemic - make it clear that there is a belief that improving corporate culture in the private sector is critical for better corporate governance and the gold standards that will make post-Brexit U.K. stand out globally for investors. The launch of the government’s consultation on audit and corporate governance reform was covered here last month.
As the U.K’s leadership role at COP26 grows ever closer, the murmur of stakeholder concerns on the need for climate action and a green recovery as part of corporate governance reforms grows louder. Clearly defining or spelling out the ethical standards at the heart of the national construct for leadership is simply essential.
Anyone who is unconvinced might want to glance at the Edelman Trust Barometer 2021 for the U.K. “The Covid-19 pandemic has had a detrimental impact on public health and the economy and has accelerated the erosion of trust around the world. This is evident in the significant drop in trust across the four largest economies: Germany, the U.S., the UK, and China. Trust in companies headquartered in the UK fell by five points to 56%, its lowest position in 8 years of tracking” said Edelman in February 2021.
This moment of reckoning for countries around the world is demonstrated most pointedly by government’s institutional trust over the course of the last year, it added. “The UK government briefly seized the high ground, emerging as the most trusted institution in May 2020, when people entrusted it with leading the fight against Covid-19 and restoring economic health. But the government failed the test and squandered that trust bubble, having lost most ground in the last six months, down 15 points in the UK to 45%.”
Main image credit: Mitchel Lensink on Unsplash.
