Ethics and Responsibility Question -
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Author Topic: Ethics and Responsibility Question  (Read 3058 times)
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« on: June 19, 2012, 01:18:28 PM »

Considering there are people with both experience in consulting, and the capability of rational thought combined with a definite moral compass, I figured I'd ask a question of the developers here regarding a ethical question that was posed to me.  Theoretically, if one consulted for a financial institution in the past (along the size of "Too Big To Fail") and someone that still worked full time for that institution contacted the consultant outside of channels for questions regarding things that might indicate that the current state/practices might (no smoking guns) violate SOX requirements (link to specific area), would one be ethically required to report such possible violations?

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« Reply #1 on: June 19, 2012, 01:27:37 PM »

Ethically, no, seeing as you are no longer hold any position within said company, and if its not breaking the law per sé, then you have no legal requirement to do so.  Morally speaking, however, is a different matter.  If you FEEL you MUST report it, then how do you explain how you gathered the evidence about it, without the person who gave you this information being "Dropped In It" so to speak.

This is only my opinion on the matter.  Others may see it differently/

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Stoic Joker
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« Reply #2 on: June 19, 2012, 01:34:09 PM »

I would think ethically, yes ... And strategically no - Leave it up to the "outside channel partner" to report it if/as needed.
(^I tend to equate ethics with morals)

Without a confirmed smoking gun, it just to easy to blow yourself (and/or your friend) out of the water.
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« Reply #3 on: June 19, 2012, 01:35:28 PM »

+1 what Stephen says.

How do you want to feel at the end of the day?

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« Reply #4 on: June 19, 2012, 01:52:28 PM »

I think the condition that someone acting in an (implied) unofficial capacity contacted someone "outside normal channels" puts it squarely into 'dealer's choice' country as to any follow-up action.

From a purely pragmatic viewpoint it's important to ask yourself how involved you want/need to be in this situation.

In my particular case, I make it a point not to pass judgements or participate in any "off the record" discussions where violations of law may be concerned.

I will give testimony in court, or before a regulatory panel - or participate in a discussion with acknowledged "parties responsible" if I have a contractual or other legal relationship with the organization involved. But as a purely outside party with no current legal ties or status with the organization in question, I tend to stay clear of involvement unless: (a) I'm subpoenaed to testify; or (b) it's something so egregious and/or illegal that I personally can't live without reporting it.

I guess it all comes down to a matter of what you believe and what price you may have to pay for your involvement in something. Not everybody who suffers is responsible for what was done. Some merely reported it and got caught in the backdraft since the law tends to paint things with a very broad brush. And any involvement with the law, or the government acting in its official capacity, is a headache at best. At least as far as my experience as a consultant goes.

Much like the above comments by Stepehen, SJ, and Ath, my rule of thumb is to do whatever best allows me to sleep at night, and face myself in the mirror.

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« Reply #5 on: June 19, 2012, 07:53:53 PM »

I'll add that it's not enough "not to have a position", you should be careful of "proprietary info" termination contract clauses. It's easy to get into hot water on those.
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« Reply #6 on: June 19, 2012, 08:56:10 PM »

I don't think that you're really asking a question about professional ethics. The question seems broader than that to me.

But practically, would reporting lead to a prosecution? It's second-hand information, so, that's debatable. It might be an idea for the hypothetical consultant to have a hypothetical conversation with the district (or crown) prosecutor.

It would be easier for the prosecutor to take things forward if they had some kind of evidence (files, etc.) drop into their laps, even if it were from an anonymous source. But they really do need something to start taking action.

The reality is that illegal activity is par for the course in business now because it's just a cost of business. If you can make more money than you'll get fined, then it's "ok". e.g. Vioxx made $12 billion, but incurred fines and penalties of almost $1 billion, making the almost 30,000 deaths that it caused well worth it.  undecided

I suppose that the question is whether or the hypothetical consultant believes that he/she can make a difference. If yes, then there's a pretty compelling moral/ethical case to do something.

Quote from: Edmund Burke
"When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle."

Commonly: All that is necessary for the triumph of evil is that good men do nothing.

Quote from: Mahatma Gandhi
An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it.



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Freedom is the right to be wrong, not the right to do wrong. - John Diefenbaker
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« Reply #7 on: June 20, 2012, 02:16:00 AM »

The OP presents a typical poser of the sort that HP used to pose in their "business ethics and responsibility" training programme. All new hires had to undergo online induction training in this. The ethics programme may have had little real benefit for HP though, as the organisation seems to have suffered from serial ethical execution errors from the top executive down, over a number of years.

Golden rule #1 - Operate from the basis of principled action. Formulate some ethical principles, and stick to them.
The principle here is clear communication upwards of any areas of ethical concern.
A general rule-of-thumb I was taught in consulting in the UK Defence/SS sector is to always report upwards in writing any instances or circumstances of actual or suspected fraud or unethical practice in a client account or in your own organisation. Your opinion is irrelevant, and your job is not to sleuth out the truth or otherwise of the matter - it will be out-of-scope of the Terms of Reference for the project you are engaged in. Just the facts and salient points as you know them is all you need to communicate.
You would usually do this as an email to your staff manager and CCd to the account/commercial manager, and would ask the former (in that email) for advice as to what action (if any) he/she may require you to take other than reporting the matter.

Golden rule #2 - Paranoia.
  • (a) Always ensure that at least two (2) people are sent the email, but address it to one only (CC the other), so as to focus responsibility for action. Also CC a Central Corporate File, if your company operates such a thing.
  • (b) Make sure you retain a personal copy of the email. You could forward it (do not Bcc it) to your private email address, and then delete the forwarded email from your outgoing email store, or (safer) print the email off and retain the hardcopy at home or somewhere else safe, but not in the office anyway. Scan it to a document image.

This achieves:
  • 1. Monkey-handling: The removal of the monkey from your back and the placement of it on 2 of your superordinates' backs. They would generally be expected get on with discussing an appropriate action between themselves, and you would be entitled to the courtesy of a written response from your staff manager, answering your Q and telling you what their approach is to be.
  • 2. CTAM (Cover-The-Ass-Method): as an insurance/protection of your own career. You can be certain that, "when push comes to shove" or if the SHTF, no-one else will be interested in protecting it for you, as they will be too busy protecting their own hides.

If you receive a verbal response from either of them, whether in a formal meeting discussion or just in passing, then send them both an email confirming your understanding of the discussion.
Repeat and rinse: same paranoia and CTAM as above, with this email and any others.

Golden rule #3 - Just remember to always keep it in writing.

The proof of the pudding:
This training has served me well over the years as a sort of Teflon coating. It has enabled me to survive unscathed several serious attempts by defective, unscrupulous or politically-motivated characters - in my own organisation or a client or associate organisation - to drag me down, or get me out of the way, or associate and tarnish me with blame for their own and/or someone else's unethical/corrupt or otherwise unprofessional practices or mistakes.
I have felt obliged to leave some companies where I could not be bothered continuing to work in such dysfunctional organisations, but in each case I have been paid a lot of exit money ($$$) to keep my mouth shut, and in two of the most egregious examples I was later invited back by senior management, to find that the defective people had been fired with prejudice in my absence and there was a saner working environment.
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« Reply #8 on: June 20, 2012, 07:59:08 AM »

@Renegade - I think you hit the nail on the head- it's more a combination of the two.
@Iain - More good stuff.  I was assuming this was the hypothetical in the sense of 'hypothetical', but perhaps its as he says, and it was in a workshop for the consulting firm.  I didn't think that companies did this, but I guess its possible.

And thanks for the replies, all.  When he asked, I just couldn't come up with the correct answer for this, especially considering the financial crisis and how much suffering it has caused.

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