Ethical dilemmas at the workplace and what drives people to compromise

Barbara Balfour | CPA Canada

A look at how CPAs can improve culture and ethics within their organizations and get better output from employees

Picture this: you've got a family to feed and a mortgage to pay. Now, imagine your job is on the line. Could you be tempted to compromise your ethics to keep your livelihood intact? It's a scenario many of us could face, and according to recent research commissioned by CPA Canada, it's more common than we realize. 

“We like to believe we’re resistant to doing unethical things, but it’s easier to do than you think. It doesn’t require a death threat,” says research scientist Brian Harward and co-author of the paper, “Navigating Ethical Systems: How professional accountants can drive ethical behaviour.” 

“Having your job threatened is all it would take for many good people to go along with something they know isn’t quite right. That’s not what a bad person would do—that’s a typical person.” 

Much discussion is held on professional accountants’ personal willingness to make difficult decisions under pressure. But what’s often missing from the conversation is how the systems of influence surrounding ethical systems can help ease or hinder some of those pressures, depending on the organization.  

Harward conducted interviews with 14 leading figures in the accounting profession to delve into the ethical challenges professional accountants face today. From executives in risk management to regulators and academics, these thought leaders shared valuable insights into the pressures and actions that drive ethical behaviour in the field.  

So, how can CPAs improve culture and ethics within their organizations and get better output from employees? Based on his research, Harward suggests transitioning from viewing failures as human error or character flaws, to creating systems that modify individual activities and decisions for the better. He shares some practical tips below on how to go about creating those systems: 

• Create, review and implement a clear code of conduct. It should provide a framework of guiding principles and identity, similar to the oaths doctors and lawyers take to uphold sacred values, and that impact daily behaviour and willingness to speak out when something unethical takes place. 
• Incentivize your employees to align their goals and objectives with the organization’s values and purpose. Often career progress is about meeting short-term financial targets and not long-term outcomes and relationships, which is another way ethics can get left by the wayside. 
• Train CPAs on negotiation skills and having difficult conversations. “Many of the interviewees said having a ‘backbone’ and ‘standing your ground’ were important skills not taught in educational programs,” says Harward. “Many people become CPAs because they are technically proficient, but are then thrust into high responsibility roles that may not be what they had in mind. It can come as a shock to realize how much power and social and ethical sway they actually have.” 
• Appoint a specific individual to the role of overseeing ethical behaviour within the organization. This prevents an "other people will take care of it” mindset, which happens when it’s not clear who is supposed to be doing what. 
• Establish effective and safe “speak up” or internal whistleblowing channels for reporting unethical behaviour, where employees feel they have the ability to speak up without retaliation, and that their feedback will be viewed as valuable contributions rather than disruptions. “It’s very important to think about how your employees can communicate their ethical concerns,” says Harward. “Many times the culture tells them not to stir the pot or cause problems. Can they speak up in a meeting or to a supervisor and if so, what would the repercussions be?” 
• Walk the walk. There must be consistency with what employees are told the culture is and how they witness the culture in action. The tone at the top should cascade down through the rest of the organization and be embraced by everyone who works in it. “If they get the sense it’s all window-dressing and they’re just supposed to break the formal policy, that’s exactly what they will do,” says Harward. 
• Be aware of biases that justify bad group decisions, or what Harward refers to as inertia. “Why fix what’s not broken? That’s what we call inertia – the idea that what we’ve been doing is what we will continue to do. As new concerns pop up, if you stay resistant to change you may find yourself on the wrong side of the law or public opinion.” 
• Use the filter of risk management when assessing organizational behaviour. Could there be a scandal one day if you get caught by the government or outed by a whistleblower? “Even if you’re not ethical, if you want to be successful, you should behave ethically for your own selfish purposes,” says Harward. “Whenever we look at scandals more closely we find many of them could have been preventable; for example, if a whistleblower felt they could speak with you first it would have been far better for the organization to handle it internally.”