Behaviour is either ethical or it's not; but the effects and consequences are greyer, as is our own perspective. Tony Bromell is head of integrity and markets at ICAEW. The views expressed are his own. This article first appeared in a slightly different format in 'Accountancy', April 2010.
By and large, people expect other people, when going about their daily lives, to do so within a set of boundaries set by society. Some of those boundaries are accepted by pretty much everyone, for example, murder. Others, such as stealing, would seem to be generally accepted in terms of what other people should not do, and yet this may not be the case when it comes to our own behaviour.
A light trawl of research into the public’s views on what they regard as ethical boundaries in their own conduct is quite revealing. For example, according to a 2007 survey by a recruitment agency:
In another survey, 39% of office workers would download potentially useful information if they thought their job was at risk. In the interests of transparency, I do need to note that this survey was by a cyber-security company. And finally on numbers (even chartered accountants can overdose on statistics), a survey by a catering magazine indicated that 33% of hoteliers reported towels as stolen commonly from hotel rooms.
Very often people don’t think they're doing anything wrong. Some of the surveys mentioned above asked why people did what they did. Usually, the theft was justified by the person as not being a theft at all; they were getting back something due to them, for example recompense for, say, unpaid overtime, or using personal phones for company business. So here we have people rationalising to themselves that a sense of justice prevails over strict property rights.
The MPs' expenses issue is a different set of circumstances as it appears that they were ‘following the rules’ and not only that, but the practice was being endorsed by an oversight body. It has been suggested that the enhanced expense regime was some sort of tacitly agreed extra pay, when a regular pay rise was thought to be politically unacceptable. ICAEW often talks to regulators and others about the advantages of principles-based regulation, one of which is that detailed rules are quite easy to comply with, to the letter, while at the same time subverting the underlying intent. These were rules but the ensuing outcry well illustrates that the public understands the difference between compliance in form and spirit, and one person’s self-justification is another’s (at best)cheating.
Another reason people find themselves doing something they would not accept in others is scale-creep. Google throws out something about war gaming when you type that in, so to explain what I mean: a series of circumstances arises where a misdemeanour is initially so small as to be beyond consideration. And then it happens again to a slightly larger degree, but no one notices, not even the offender, because the degree of change is minute. And then it happens again, and so on, until there is some quite serious unethical behaviour, the extent of which was never intended. But, if it stops, the whole series of infractions becomes noticeable to others so the perpetrator is caught on a treadwheel. This sort of thing is often the cause of misleading accounts presentation; nobody ever planned it, but it just crept up!
Starting with the basics, the ICAEW's Code of Ethics (‘the code’) applies to all ‘professional and business activities.’ However, that is not carte blanche to do absolutely what we like when off duty. The whole point of professional behaviour is to ensure that the purchasing public can trust ICAEW Chartered Accountants to behave properly so when it comes to disciplinary matters, whether a behaviour falls within professional and business activities is not the point. We potentially need to consider any member’s (or student’s) activities if they bring discredit in the eyes of a reasonable and informed third party, and non-compliance with the Code of Ethics is just one indicator of a problem.
Let’s consider the examples above. Fiddling the numbers is definitely within the scope of professional and business activities for an ICAEW Chartered Accountant. The standards of the profession are intended to be an example to the rest of society – that is one of the key reasons people choose to employ or engage ICAEW Chartered Accountants. So, in my view, any amount of intentional accounts manipulation would be likely to be a breach of the code and a discreditable act.
Moving on, I would hope that pilfering stationery and enhancing expense claims would not fall to be treated as a professional or business activity but as noted above, that is not necessarily relevant for disciplinary purposes. In the first instance any disciplinary action in these sort of instances is going to be in the hands of the employer or other directly aggrieved party. However, even these sorts of activity might also fall within the scope of happenings we are interested in if discredit results. In principle, the scale of a particular behaviour is not relevant to whether it is ethical or not. In some areas it is not even a theoretical issue: you cannot, for example, murder someone a little bit. So, committing a murder is undoubtedly a discreditable action; indeed it is an indictable offence and as such would automatically lead to disciplinary action, though it has to be said that the prison sentence is most likely to be the key thing on the murderer’s mind at the time.
However, in other areas there are clearly degrees of effect. How would we react to a complaint about a member walking off with a paperclip? Well, we are getting into the realms of the hypothetical here as, to the best of my knowledge, ICAEW has not had any such complaints. If we did we would need to bear in mind society’s own levels of acceptable behaviour. Intent is relevant, but so, in this case, is the effect on our reputation. You could construct a case where that could be significant: suppose, for example, a member who was also a politician made a reputation on being so honest that he or she ‘had never even taken a paperclip’. In that instance the reaction to their taking a paperclip might result in a great deal of discredit. In other circumstances you would have to say the effect on our reputation would be minimal.
What can you take away from here? Certainly not that all minor infringements are not a problem by definition. The point is that behaviour is either ethical or it's not; but the effect, and the consequences, need to be considered on a case-by-case basis.