Is it time to move away from tick-box ethics training?

Can ethics training for legal, tax and corporate professionals evolve beyond simple tick-box training and toward something more meaningful and rooted in real-world implications?

The recent headline, Ernst & Young to pay $100 million fine after auditors cheated on ethics exams, reads like something from a satirical magazine. Last month, however, accounting firm Ernst & Young (EY) was fined by the U.S. Securities and Exchange Commission for withholding evidence from the regulator’s enforcement division when some of its audit professionals were found to have cheated during exams required to obtain and maintain Certified Public Accountant licenses.

On the face of it, this is an appalling story; when the people whose job it is to keep an eye on organizations fail to attain even the most basic ethical standards, there is a huge problem. After all, one has to be particularly dumb — or unethical — to think it is acceptable to cheat on an ethics test.

There is arguably little point in making people take an ethics test that permits them to cheat — aside, potentially, from an exercise in entrapment to test their ethical make-up. Organizations that use these kinds of tests might wish to consider what they achieve. The fact that cheating is even an option means such tests have standardized answers, which means that they are highly likely to comprise multiple-choice questions, such as:

A client has offered you an envelope of cash and asked you not to look too closely at their stock levels. Do you:

1. Accept their kind gift and accede to their request?

2. Explain that the going rate for turning a blind eye is twice what they have offered and ask them for more?

3. Accept the gift but give the money to charity?

4. Refuse the gift and immediately report it to your ethics officer?

Ethics by numbers

Aside from an exercise in box-ticking and potentially highlighting the existence of ethics officers, this is a pointless question. If staff need to be told not to accept bribes, this may be a sign that the employer has more serious problems.

One of the main reasons this type of training persists is because it feels like a good idea, at least from the perspective of some lawyers and compliance officers. The former because, theoretically, it makes it easier to dismiss people who behave unethically, and the latter because they can report to regulators that everyone has completed their ethics training.

What such an “ethics by numbers” approach ignores, however, is that most employees are not setting out to be unethical. Given a choice, they would like to do their jobs ethically, and those that do not wish to do so are unlikely to pay any attention to the training anyway.

Forcing people to do pointless training that asks silly questions is not helping them to be more ethical. Rather, it risks sending a signal that the firm views ethics as a performative check-box exercise. The form might suggest we really care about ethics, but the substance screams we really do not.

If firms want their employees to behave ethically, they need to give them training that helps them to do the right thing. Not by asking simplistic questions about hypothetical scenarios, but by openly talking about real challenges that people might encounter — those situations that do not have simple answers that lend themselves to being copied.

More talk, less tick-box

The most critical step toward the more effective management of ethical challenges is to acknowledge the unique dynamics of ethical issues. Rather than thinking of ethics as a series of consistent principles, we must recognize its fluid nature. What is relevant and appropriate in one organization or situation might not be in others.

With that in mind, here are three principles that need to be at the core of any ethics program:

1. Inevitable

Organizations need to recognize that ethics is not something they can avoid, however hard they might try. Whatever business model an organization has, whatever sector to which it belongs, and no matter how well-run, there will be ethical challenges that need to be considered.

By starting from the principle of when rather than if ethical issues arise, organizations can design frameworks that reflect the realities of the modern world. As Prof. Linda Trevino has explained, ethics are like a garden that needs tending. Weeds will grow if the garden remains untended, but in a well-maintained garden, weeds are less likely to grow.

All too often, ethics are seen and described in terms that depict them as undesirable problems. In fact, they are just a part of everyday life. Organizations that talk openly about ethical challenges and how to solve them will create a culture in which employees are more likely to raise them.

2. Invisible

Ethical issues rarely come nicely sign-posted, so organizations need to recognize that staff may not always be able to spot them. It is critical to recognize situations in which ethical issues are most prevalent and to design interventions that make doing the right thing easier than doing the wrong thing.

For example, an organization in which certain employees are highly likely to be required to travel to countries with an enhanced risk of bribes being offered or expected needs to make those employees aware of the dangers they are likely to face and equip them with practical skills that can help them spot ethical traps. That means providing training that deals in the kinds of real-life situations they are likely to encounter, not theoretical dilemmas that bear no resemblance to reality.

3. Impaired

People intuitively understand ethics — even the most unethical person desires to be seen to be ethical — but is also true that humans are often incapable of spotting ethical issues in which they are themselves involved. People are also perfectly capable of “motivated reasoning” — finding reasons to justify their decisions — and “wilful blindness” — ignoring those things that they know will be challenging. It is therefore critical that organizations recognize when staff might be incentivized not to spot issues, or to ignore problems they come across.

This can be done by providing a course of action that makes reporting issues or getting help seem more attractive than not doing so. For example, the United Kingdom’s familiar “See It. Say It. Sorted.” campaign for the British Transport Police, encourages the reporting of anything suspicious that people see on the transport network. By recognizing that people want to help, but often worry about wasting police time, the campaign makes reporting such incidents feel far better than not reporting them.

The bottom line is that organizations cannot just expect their employees to manage their ethical issues. They need to help their staff spot problems and provide support to make that happen. This costs time and money, but if an organization really cares about ethics, it is an investment they should make.

With regards to the EY story, clearly one of the biggest issues is not people thinking it is acceptable to cheat during an ethics test. The far more significant question is why a subject such as ethics is being relegated to a tick-box test.

This article was written by Christian Hunt, Founder of Human Risk, and was featured first on Thomson Reuters Institute and republished with full permission.

Thomson Reuters, a worldwide trusted provider of answers, helps professionals make confident decisions, run better businesses and gain competitive advantage in complex arenas – law, tax, compliance, government and media.

Subscribe toLegal Insight

Discover best practice and keep up-to-date with insights on the latest industry trends.