Questions of Morality for Business Leaders

The “Navigating the Grey” series featured many enthralling speakers that brought their perspectives to some of the most difficult questions of life and business. How do you define success? How do you make trade-offs in line with your values? Where are you going and not somewhere else? The most fascinating speaker might have been Steve Preston, former CEO of Livingstone International and Former US Secretary of housing during the crisis who delivered his message that only ethical businesses are truly sustainable.

It was clear that the matter was personal to Mr. Preston given his long career in finance and the public service where he was frequently faced ethical breaches. First, in his role as a banking associate right after graduation, he witnessed firsthand a rising star manager being led out of the office, handcuffed, for insider trading. He was a CFO during the period preceding Sarbanes-Oxley where widespread fraud and unethical behavior destroyed the public’s trust in US companies.

Steve Preston, secretary of housing during the financial crisis, was speaking about morality at Chicago Booth

Steve Preston, secretary of housing during the financial crisis, was speaking about morality at Chicago Booth

In addition, as Secretary of housing, he had a front-row seat to the financial crisis. While most people just blamed the crisis on the banks, Steve argued that the cause was due to moral failures that were far more widespread in the system, including lawmakers, mortgage providers, credit agencies, in addition to the home buyers themselves.

So what lessons did Mr. Preston take away from these anecdotes? First, people and organization don’t go from ethical to unethical in one full swoop. Rather, it is the slow erosion of principles over time that results in the kind of unethical behavior that we are increasingly seeing. Individuals and organization usually have plenty of time to realize their moral drift and correct the trajectory. Unfortunately, the slow and progressive divergence is both hard to notice and doesn’t inspire action even when noticed. There is a sense of urgency in a boat sinking that one can hardly find when oceans are rising, even though the final result is the same.

So how do we protect against this moral drift? The first step would be to start noticing it when it happens, which requires being conscious and deliberate about our values and principles. Intentional moral principles serve as an anchor, but also as guardrails while unspoken and implicit ones can be carried away by everyday busyness.

As the reader of this article will most likely be in a position of responsibility in the future, it is worth asking the question: What values do you stand for in your professional life? Is there anything your company can legally do, that doesn’t impact you and for which you would consider quitting your job? What is it that is so fundamental to your sense of identity that you could not work in an environment that does not provide it? Those are the values you are willing to stand for. Knowing them is half the task of standing for them.

By Ziad Abouchadi, Class of 2017. Ziad is a second year MBA with questionable ethics