In the Forward, Yeshiva University professor Moses Pava reports that his business students tell him that, “corporate social responsibility is merely rhetoric designed to fool environmentalists, consumer advocates and other do-gooders.” Pava recognizes that this attitude is consistent with most of today’s textbooks in business schools. Moral Courage stands in contrast. It seeks to connect “knowing” the right thing to do, and “doing” the right thing.
A series of articles examine how organizations make it hard for individuals to raise moral concerns. Financial incentives, peer pressure and a deeper issue about how we define ourselves impede most people from speaking up. Gina Vega writes about the competition between risk and rewards in an individual’s decision to move from knowing to acting. She also identifies the “moral hazard” individuals face if they lack an incentive to avoid risk. In the Bernie Madoff scandal, the rewards of his ongoing scam protected him from the risk of discovery. When investors saw their accounts go up, they had no incentive to explore whether it was the result of misconduct. Putting aside the repeated efforts of one seeking SEC action, no one showed the courage to raise a concern. In our present economic crisis, those who ran irresponsible risks faced little risk, and small consequences if their risks went sour. Together, the circumstances created a moral hazard big enough for our whole economy to fall through.
In a chapter called, “For the Great Good,” Stephen Kohn writes about the benefits whistleblowers have wrought. Nixon’s resignation and Clinton’s impeachment; the Pentagon Papers and the collection of taxes from UBS – all flowed from the courage of individual whistleblowers. From a variety of studies, we now know that employee disclosures are the most common means by which frauds are detected. Yet, our laws and legal procedures do not yet provide the level of protection and incentives needed to draw out more potential whistleblowers. U.S. laws are uneven. They protect whistleblowers only for certain categories of concerns and activities. Actual rewards are available only for frauds against the government (including tax fraud) and now for securities and commodities violations (in the Dodd-Frank Act, enacted after Kohn wrote this article). Then Kohn compares the experience of Fredrick Whitehurst at the FBI lab and the promise of the First Amendment. Whitehurst had to risk his career to disclose that the FBI’s lab had developed a culture of outcomes instead of integrity. His courage led to new legal protections for FBI whistleblowers. Yet, our Founding Fathers had foreseen the need to call on all Americans to disclose information about “any misconduct, frauds and misdemeanors.” Kohn calls for change in our workplaces and our laws. With changes in our law to protect and encourage whistleblowers, “real change is possible.”
While Moral Courage in Organizations is written for use in business ethics education, its principles have wider application. Lawyers, doctors, and anyone with professional responsibility will find challenge and inspiration in these pages.
Moral Courage in Organizations is available for $39.95 from the NWC Book Store.