Why (or When) Do People Comply? Ethics v. Compliance part I

On the Society for Corporate Compliance and Ethics web site forum, I came across this post. Though personally I’m very distressed (perhaps overly so) by people who cut lines, don’t use their turn signals, etc., I don’t think that the original author’s point (whose name I’ve omitted) is supported by his argument. People, by and large, only follow rules if:

  • (a) They are rules against something morally wrong and/or
  • (b) The overal negative consequences of the act are high.
My response is a bit roundabout, but I do think it makes the point:


Original Message:

Sent: 06-28-2010 11:41

Subject: Ethics Without Compliance

This message has been cross posted to the following eGroups: Ethics Forum and Chief Compliance Ethics Officer Network .


On Friday I saw some behavior that made me wonder if a faith in ethics is worth having, absent a strong compliance regime.

I was on a plane and, after the doors closed, the flight attendants made the usual announcement about turning off all electronic devices until ten minutes after take off.  It’s a rule that is announced on every flight, but as every frequent flyer knows, it is poorly enforced.  The flight attendants often don’t notice people breaking it, and many hide their use of the devices.  Plus, some people honestly forget and leave their phones on the entire flight.

Such was the case on the flight I took on Friday.  After the announcement was made many people pretended not to hear it and went on tapping away at keyboards.  When the flight attendant spotted them and told them to turn their devices off immediately, some did, but my seatmate only pretended to.  As we were taxiing out to the runway, I saw her checking Facebook statuses on her iPhone.  All I could think was “I know your iPhone is highly unlikely to cause the plane to crash, but is it really worth taking a risk on the safety of a couple of hundred passengers just to read that Cindy is psyched for the weekend?”

Bottom line is, she didn’t believe in the rule, knew no one would be monitoring it effectively, and chucked any ethical considerations.

She wasn’t alone.  Within seconds of the plane’s liftoff I was amazed at the number of iPads, iPods and other devices that were up and running.  I seemed to be the only one waiting to hear the double chimes indicating it was now safe to use approved electronic devices.

Why did they do it?  There was a rule that they didn’t believe was worth following, it got in the way of what they wanted to do, and there was no real effort at compliance.  And what about the ethical considerations about potentially putting others at risk?  They made a calculus and, not surprisingly, found in their own interest.

It’s no different, as I’ve written before, at the ten item or less line at the supermarket, another weak compliance environment.  It’s exceedingly rare for a clerk to turn anyone away for having too many items.  So, a significant percentage of the population will try and sneak in with as many items as they can.

All this makes me wonder:  can we talk seriously about business ethics without their first being regular and strict compliance?  To be fair, not everyone cheats on the 10 item or less line or turns on their phone when they shouldn’t, but the numbers are high enough to make me wonder about the potential mayhem it would create in a business setting.

Ethics is often discussed as being useful for navigating the gray areas, but that assumes someone is policing the line between black and white. 

There are many who argue that we should put ethics first and compliance second.  I’m starting to think it would be a disaster. 

Am I onto something or should I stop flying so much?

My response:

It coincidental that I’ve just been working on a blog post on this very topic, that is the way the terms “ethics”, “compliance”, “social responsibility”, etc., get used.  And beyond that, like you I sometimes despair at the fact that people so flagrantly ignore rules which are based solely on the fact that their universal compliance would mean a safer and/or more convenient world for everyone. However, Steve, I think your analysis of the situation goes in the wrong direction because you assume that people only follow rules because they are explicit and, therefore, what chance do ethical strictures, which are not, have? Especially since, as you point out, people often do not follow the explicit rules.
I think there are several different categories of judgement for of rules of behaviour.  On one hand, we have the purely utilitarian view: does this behaviour affect people (myself included) in a positive or negative way. On the other, we have the purely ethical/moral dimension, which philosophers call deontological judgement and which is usually segregated from the utilitarian judgement. I actually think that people use a calculus in which they weigh the two against each other before deciding just how permissible an act is. You see, I think that, beyond the utilitarian aspect of compliance (I’ll have a negative effect if I get caught), compliance is actually not a significant motivating factor in the examples you suggested.

I think of it like an x/y graph, with ethics on one axis and utility on the other.   We judge each other, and ourselves, by the combination of these factors. If we think something (even if it is against certain rules or regulations) has no negative effect on anyone else and there is no moral prohibition against doing it, rules will not stop many people from doing it. Cell phone usage on the plane is the best example I can think of. No one believes that there is any chance that their 3G iPad is going to bring a plane down so, crew member instructions or not, people will do it if they can get away with it.

Move up the utility scale a bit to the grocery 10 items and under line and more people start to judge others badly. There is a real (if minor) effect on other people if you get into the 10 items line and count your 6 gallons of milk as one item (it’s the same item!): they have to wait longer to get their items checked out.  And while there is not a universal moral code against getting in the wrong line at the supermarket, we do tend to think badly of people who don’t care enough about others to follow these kinds of rules.
Further still up the utility scale is a particular peeve of mine: people that don’t use their turn signals at intersections. I’m not sure why, but the neighborhood I live in (Belmont Shore in Long Beach, CA) has an incredibly high ratio of people who think using their turn signal at intersections is optional. On one hand, it inconveniences people in the same way supermarket line libertine does: by not signalling, others have to wait before making their turns, thereby delaying them. Even more seriously, though, it creates a real danger for intersection vehicle accidents. I have to admit a certain sense of schadenfreude when I see the daily non-injury accidents on 2nd Street, assuming as I do that at least one of the people involved didn’t use his or her turn signal. But I think we would rate the lack of turn signals as more morally suspect than the people in the supermarket lines because it does put real people in real danger, in addition to being a time-wasting nuisance.   
On the other axis, most people rate dishonesty, especially when in pursuit of money, as being ethically indefensible. We know that the entire edifice of enterprise depends on a certain amount of veracity so we can do business. Without a degree of trust, no one would ever buy or sell anything. Additionally (perhaps more importantly for this post), lying is something that is fairly universally considered wrong. There are certain exceptions to that, of course (when a greater evil would be prevented by lying, for example), but that’s not the case in sales, however.  On the other hand, since the total effect of a salesman’s dishonest tends to be pretty limited, although we judge him as having done the wrong thing, the severity of the judgement isn’t as great as it might be. We expect a certain amount of, shall we say, imaginative truth-construction among sales people, so the fact we anticipate the dishonesty of the used car salesman lessens our judgement of him/her.
The people we reserve the most severe judgement are those who both do the wrong thing (from an ethical perspective) and whose actions have a large effect on people’s well-being (utility). People who have perpetrated large accounting frauds or who have gamed the capital markets are two particularly relevant recent examples. Those who brought down Enron, WorldCom, etc., both lied and destroyed peoples lives. Similarly, the investment bankers who both created secondary mortgage instruments that they knew were bad, sold them to their customers, and then bet against them, causing the global financial meltdown and bringing on the worst depression since the 30s, are generally judged very harshly.  
This may seem like a long way around to my point, but it’s important. I don’t think you can draw any conclusions about whether ethics in the absence of a compliance motive would result in chaos based on your examples. If a rule is neither useful nor ethically motivated, many people will ignore it as officious, and why not? The supermarket example is more interesting, but not much because it is still pretty low on both axes.  I contend that if we educated people on both the ethical dimension *and* the utility of their actions, the compliance motive would far less necessary.  The compliance aspect is a part of utility (I’ll lose my job if I get caught) but that is quite a low bar to hit. What we want is people acting better than just barely compliant and if you focus on compliance, I think, you only get the bare minimum. Ultimately I think compliance is a necessary but not sufficient condition for ethical behaviour in most companies. It’s necessary to keep people out of the very worst behaviour but I think you need ethics training and/or motivation to inspire them to their best.

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