Can Ethics Be Taught?

Tay Kay Luan

Applying sustainability principles demands inclusion of a wider set of stakeholders. It calls for ethical and responsible behaviours.

Applying sustainability principles demands inclusion of a wider set of stakeholders. It calls for ethical and responsible behaviours. Ethical sustainability calls for stakeholders to uphold the moral standards and ethics. These demands will always face challenges especially in situations where individuals or businesses may be required to accommodate certain standards of behaviour that they may find inconvenient or unfamiliar. But if the global communities are serious over the idea of applying sustainability principles to their business and society mainstream then the case for adoption of sustainability practice and principles will need to be strengthened, simplified and sustained both in depth and breadth.

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Decades of economic progress and developments have led to rapid depletion of precious resources including diminishing forests and resources on land and sea including freshwater. The linear production that has been so successful in producing goods and services to satisfy the growing appetite of its population, but the end-product of its consumption is waste that needs to be got rid of. Societal dependence on fossil fuels that have powered industry and services is another example. But the release of greenhouse gas that comes from use of these fossil fuels, primarily coal and oil is now being regarded as the primary cause of climate change.

The unintended consequence poses the ethical dilemma for all stakeholders. The issues of social sustainability are many. But one of the concerns involves the widening of the income inequality between the rich and poor.

Addressing this takes efforts and time. But sustainable living demands a more functional system where access and means will constantly need to be addressed. Numerous cases of corporate failures in modern times from Enron almost two decades to bank failures not too long ago questioned the moral system that includes values, ethics and behaviours.

Business historians are quick to deduce that poor moral standards and ethics are to be blamed rather than the fault of poor regulation. Within the financial services industry which has more of its fair share of unethical scandals, the root cause of such unacceptable behaviours, for example pursuit of self-interest and greed is to do with values, environment and behaviours among the many reasons often cited. This reflects the possible failure of the traditional moral standards and ethical principles, both of which are pillars to sustainable living. Such ethical misdeeds have caused much damage financially to the wider stakeholders, but it is equally important to point out that public interest has been compromised. It reinforces the authorities’ conviction that a major overhaul and installation of the industry ethos and professionalism as the main engine of the industry as an urgent “must-do” on the agenda. Hence, there are enough justifications for an education for ethical sustainability where ethics becomes the core of the curriculum and an integral part of the learning outcome.


Universal scandals


A quick browse in the Google search engine for ethical scandals, will not only result in more 125 million hits but the topic is very universal across diverse cultures and industries. A point which has often been debated and has attracted much attention is whether ethics in business can be taught. Today in a complex world, with much uncertainty and volatility leading business schools are the first to defend their curriculum to counter the argument that business schools are churning out graduates who have no concern for unethical behaviours and practices. One of the learning objectives of MBA courses is to ensure business school graduates are equipped with the knowledge and understanding of the right values and behaviours in their future roles. No business school can take this for granted.

The debate over whether ethics can be taught has been going on for mor than the past two decades. No one has the complete answer, but the debate has left behind more questions than answers. But many professors will agree that ethics classes will not convert every student into more ethical citizens but the professors at Stanford Business School in one of their events themed “Does Teaching Ethics do any Good” agree that they do teach their MBA students to engage more confidently in ethical dialogues.

Business schools have included ethics modules as one of the electives or even a core topic in the postgraduate qualifications. The learning approach varies from understanding meaning of values and behaviours to one at Arizona State University where students are being requested to take an oath as “evidence” of their commitments to be an ethical leader. There are others that do not insist but open their minds to the bigger picture of what it takes to be an ethical leader – and repercussions if they don’t.

One common approach among leading business schools includes helping students to understand the concepts of ethical business and values and these are being deployed to handle the related issues in the courses. It is not uncommon to find business schools using case study approach allowing students to understand and apply the principles and concept of ethics and professionalism.

There will always be the challenge of selecting the appropriate balance for such value-based education. Differing culture practices and acceptance are one. But an acceptance of universal standards within the context of sustainability principles will be relevant.

The rationale for such an approach is the opportunity to test “real life” examples where different perspectives and opinions are being debated.

Interestingly, values and cultures do play a part in producing contrasting viewpoints. It is interesting to note that ethical guiding principles can be derived from religious beliefs – and these are important for educating ethical sustainability.

While the use of case studies allows critical thinking, it gives students a better understanding to relate and explain ethical issues and complexities. In many cases today the ability to relate and exemplify the understanding of ethics in business and society do give students the edge in job hunting and future careers. Education on ethical sustainability and principles should also be part of the life-long learning across all jobs and responsibilities. The application of ethical knowledge and skills for example will always question the balance between the objectives of the social and environment objectives against the business needs. The sustainability agenda will always include the question of ‘moral’ judgement of doing good. Reforms on training curriculum had already taken place to ensure ethical competence be included and applied, focusing on the behaviours of integrity and application of moral value across industry practices.

Ethics training needs to be delivered through a series of applied case studies, proper “testing” and reinforced at various stages of learning – formal and informal. Beyond the teaching and learning environment, ethics in the form of its standards and forms are also reinforced through institutions and processes.

In the United Kingdom the Financial Services Industry, with the help of regulators, established the Banking Standards Board (BSB), the remit of which is to promote high standard of behaviour and competence across UK banks and building societies. The BSB worked with their member banks and others, including consumer bodies, professional bodies, universities etc to identify the best way to increase and improve the ethical standards of behaviour and competence in banking. Among the deliverables rolled out include: consumer framework to identify the good banking practices and outcomes; guiding principles on raising standards of professionalism; education that involves learning a research work including exposure to real-life case studies (BSB has a strong advocacy role for higher standards of ethics, responsibility and professionalism across the local financial services industry).

Recognising the contagion risk from its observations of the inherent inter-connected nature of global banking, it has a purpose to ensure the convergence and harmonisation of standards of professionalism and ethical behaviours through the sharing of research, international best practices and partnership with the industry. Regulators recognised that the local industries have no choice but to embrace and integrate the wider agenda of professional ethics from boardroom to shop floor, one of which includes ensuring the code of ethics is well understood across the business mainstream and reminding staff to fulfil continuing professional development (CPD) requirements including business and professional ethics.

Indian women protesting in front of the RBI over its decision not to accept old currency. AFP

While research studies show that education and training may solve half the problem towards shaping and reinforcing the ethical culture, corporate cultures and leadership play a more crucial role towards shaping employee behaviours. Reinforcing the ethical values within the internal environment through introduction of a code of ethics is a necessary support to ensure the promotion of right behaviours and values. The introduction of an industry code of ethics to support standards of professional conduct are to ensure members of the industry fraternity observe the expected standards to act or serve their stakeholders including customers, peers and business partners with integrity, competence, diligence and respect. This is in line with regulated professions such as accountancy, legal and medicine and bankers, who must always also act ethically with regard to the public, clients, employers, colleagues and others in the industry. Employees in banks for example are also expected to complete successfully mandatory on-line assessments. To complete successfully, individuals are expected to display a typical code of ethics. This sets out the following key attitudes and behaviours it expects of banking professionals: treating all customers, colleagues and counterparties with respect and integrity; considering the risks and implications of actions and advice and holding his or her self accountable for them and for the impact these may have on others; complying with all current regulatory and legal requirements and following best industry practice; treating information with appropriate confidentiality and sensitivity; being alert to and managing potential conflicts of interest that may arise while performing a role; developing and maintaining professional knowledge and skills; acting, always, in a fair, honest, trustworthy and diligent manner.

The code of ethics, designed to support the standards of professional conduct typically defines specific behavioural requirements and commitment to professionalism, integrity and discharging duties to clients, employers and the institute. The purpose of the codes is also to ensure clear benchmarks against which customers, colleagues and others can measure their ethical and professional competence. By doing so, the public will be duly informed and assured by the commitment of the banking industry to practise a higher level of ethical professionalism. Such focus on standards of professionalism is intended to raise higher levels of public confidence and trust, as well as to improve credibility among customers.

For bankers, this is about sustaining a culture of professional development and continuous improvement and pride in the profession. Implicitly, the codes are designed to ensure good standing of the professional body for which the members come from and represent.

The code is consistent with many other organisational and professional body codes. This will bring the financial services professionals in line with the high standards of professionalism expected of many professions where public interest is key. They are expected to understand and agree to subscribe to the code and to embed its principles within their organisations. This is a must within the industry, such that behaviours are part of the mainstream – encouraged, recognised and rewarded. It should not remain a “do as you are told”. Rather, such values must be woven into the organisational culture, or “the way things are done here”.

The standards of professional conduct will not only demand a set of well-defined behavioural standards on professionalism and integrity. They are expected to comply with laws and regulations and exercise independence and objectivity.

In this regulated sector, employees are prohibited from insider trading, tipping and market manipulation. Employees must also exercise duties of fairness, objectivity and observe strictly client confidentiality. Professional conduct includes rules on their duties in observing loyalty to their employers and avoidance of potential conflicts of interest. Indeed, any potential conflicts of interest must be disclosed openly and fairly. The standards of professional conduct will place special mention of confidentiality, conflict of interest and honesty. The underlying guiding principles will include a more definitive list of explanations on client confidentiality, disclosures, investment decisions and arresting potential conflicts. Ensuring clients’ interests are intended outcomes of the professional codes.

In grappling with the issues of ethical concerns at workplace, many employers will face the challenge of not only putting in place a robust framework in an already regulated environment. Educating and teaching employees the importance of ethics, is part of corporate sustainability which corporations must embrace and be accountable to the interest of environment and community at large. The codes of ethics are not without its shortcomings. The very set of standards in values and practices will not be of help if these are ignored. But importantly the presence of codes will not stop companies from continuing to use resources that are harmful to the environment or use materials, for example plastic that will become waste after being used. In this context, it is necessary for corporations and businesses to ensure public interests are protected through professional conduct and actions reflecting the values of responsibility and standards they espouse. Walking the values may make more sense to demonstrate commitment and to fulfil public expectations of corporate responsibility.

In the final analysis, the value propositions are clear – the responsibility of businesses and corporations in upholding ethical standards to protect the interest of the community at large is expected and high ethical standards cannot be compromised. Ethics, in other words, can be taught but must be reinforced within the framework of monitoring and enforcement of institutional values and processes.

Tay Kay Luan is the vice-chancellor of the International University Malaysia Wales and is also the author of Perspectives on Social and Business Sustainability. He graduated from the London School of Economics and Political Science and Kingston University London.

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