What is ethical leadership? Do you base it on something as simple and straight-forward as Don’t Do Evil or is it grounded in one of the more well-known philosophers, such as Jeremy Bentham and utilitarianism, John Stuart Mill and the concept of liberty, or Peter Singer who delineates “practical ethics” which he defines as the application of morality to practical problems based on philosophical thinking rather than religious beliefs? In the Harvard Business Review (HBR), Max H. Bazerman takes a look at this issue for the business leader in a piece entitled “A New Model for Ethical Leadership”.

A key for Bazerman is value creation. He states, “Whereas many experts would define negotiation ethics in terms of not cheating or lying, I define it as putting the focus on creating the most value.” This is certainly a welcomed approach in the corporate world and one that a Chief Compliance Officer (CCO) is well suited to facilitate. This is because “a focus on value creation is still likely to work for you in the long run. Your losses to the occasional opportunistic opponent will be more than compensated for by all the excellent relationships you develop as an ethical negotiator who is making the world a bit better.”

Value creation is obtained through trade-offs in any negotiation. He notes, “Negotiation scholars have offered very specific advice on ways to find more sources of value. These strategies include building trust, sharing information, asking questions, giving away value-creating information, negotiating multiple issues simultaneously, and making multiple offers simultaneously.” This is largely because internal negotiations often “involve a tension between claiming value for yourself (or your organization) and creating value for both parties—enlarging the pie.” He concludes, “All the leading books on managerial negotiations highlight the need to create value while managing the risk of losing out.” The key would seem to be in communications by the CCO during any such negotiations.

Bazerman then goes in a direction little considered by CCOs, compliance professionals or in most corporate compliance functions. He asserts, “People tend not to think of allocating time as an ethical choice, but they should. Time is a scarce resource and squandering it—your own or others’—only compromises value creation. Conversely, using it wisely to increase collective value or utility is the very definition of ethical action.” He goes on to note that allocating tasks among employees offers managers other opportunities to create value, which he calls the notion of comparative advantage.

While many view it as an economic idea; Bazerman sees it as a guide to ethical behavior as it is through the assessing of comparative advantage by determining how to allow each person or organization to use time where it can create the most value. Indeed, if you think about companies which create a comparative advantage when they can produce and sell goods and services at a lower cost than competitors do; you can then see that “individuals have a comparative advantage when they can perform a task at a lower opportunity cost than others can. Everyone has a source of comparative advantage; allocating time accordingly creates the most value.”

I find this to be a key insight for the compliance professional. Time can be an ethical behavior. Now consider the Department of Justice’s (DOJ) Evaluation of Corporate Compliance Programs admonitions around risk assessments. The DOJ continually reminds CCOs to determine, assess and manage their organization’s risks. Now in the era of Coronavirus, this mandate has become even more important. If you have scare monetary and head count resources, you, by definition, have scarce time resources as well. Bazerman certainly provides an ethical analytic framework for this issues.

As you move forward, you may find organizations socially responsible in some ways but less so in others. He stated, “Most organizations get higher ethical marks on some dimensions than on others. I know companies whose products make the world worse, but they have good diversity and inclusion policies. I know others whose products make the world better, but they engage in unfair competition that destroys value in their business ecosystem. Most of us are ethically inconsistent as well. Otherwise honest people may view deception in negotiation with a client or a colleague as completely acceptable. If we care about the value or harm we create, remembering that we’re likely to be ethical in some domains and unethical in others can help us identify where change might be most useful.”

In think this is an excellent prescription for CCOs and compliance professionals to sit back and take stock of their programs from a much more holistic approach. Your compliance programs and company culture may be doing quite well in some areas, less so in others. Now you have the time to consider those areas which are not as robust and you can plan to remediate those areas.

Bazerman believes that leaders can do far more than just make their own behavior more ethical. As “they are responsible for the decisions of others as well as their own, they can dramatically multiply the amount of good they do by encouraging others to be better. As a leader, think about how you can influence your colleagues with the norms you set and the decision-making environment you create.”

Obviously, employees follow the lead in the behavior of others, “particularly those in positions of power and prestige. Employees in organizations with ethical leaders can be expected to behave more ethically themselves.” Tell those stories and make them memorable. Bazerman provided the example of one corporation which secured “rave reviews for its social-responsibility efforts, created an internal video featuring four high-level executives, each telling a story about going above the boss’s head at a time when the boss wasn’t observing the ethical standards espoused by the corporation. The video suggested that questioning authority is the right thing to do when that authority is destroying societal value. By establishing norms for ethical behavior—and clearly empowering employees to help enforce it—leaders can affect hundreds or even thousands of other people, motivating and enabling them to act more ethically themselves.”

As a CCO you should model ethical behavior. However, to the extent you can, influencing the behavior of others is the mark of true leadership.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2020

On this special bonus episode of The Ethics Experts, we speak with Loren Sanders about how many different Learning and Development buckets there are, how vendors catch CVS’s attention, and how to get their business once their attention is captured.

Check out more episodes, and don’t forget to subscribe on your favorite podcast platform!

CONVERGE is in its 5th year of bringing together the world’s leading companies for 2 days of dynamic speakers, thought-provoking breakout sessions, and opportunities to connect with like-minded professionals. This year the conference has gone virtual. You will leave the conference with new resources and best practices allowing you to continue the hard work of driving ethics to the center of your business. In today’s episode I visit with Salima Fajal. We visit about her presentation at Converge20 on Accountability Beyond Diversity & Inclusion.


It’s no longer enough to let your company’s Diversity, Equity, and Inclusion team—or more likely, the one DEI person you might have on staff—struggle to move the needle on equality. In 2020 and beyond, we ALL have a role to play in the movement for racial justice, perhaps no team more so than Ethics and Compliance. After all, failing to live up to your company values on behalf of all employees represents a significant risk. Join this session for an open, vulnerable conversation on how that accountability translates into your daily work, from leading the fight against bias to influencing company culture, monitoring social media activity, and more.

For more registration and information on Converge20, click here.

In this podcast, I am joined by AMI Managing Director Rod Grandon. We engage in an in-depth discussion what the government expects from contractors.

The heart of the business ethics and compliance program distils to three basic elements:  PREVENT misconduct from occurring. DETECT misconduct when it occurs. CORRECT by taking appropriate steps to remediate the consequences of the discovered misconduct (internally, with customers, and with other stakeholders), to understand the root cause of the misconduct, and, based on the findings of the root cause analysis, to revise policies, practices, and controls to prevent similar acts in the future. Many of these same considerations are addressed in the United States Sentencing Commission Guidelines Manual (Guidelines) (as amended November 1, 2016), offering additional guidance for contractors to consider in developing and maintaining effective ethics and compliance programs. The Guidelines make clear that courts will assess effectiveness, at least for the purposes of federal sentencing, by determining whether an organization’s ethics and compliance program has been “reasonably designed, implemented, and enforced so that the program is generally effective in preventing and detecting criminal conduct.” To do so, the program must achieve two fundamental outcomes: (1) it must require the contractor to exercise due diligence to prevent and detect criminal conduct, and (2) otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.



Tom Fox chats with Simon Greany, co-founder and Chief Learning Officer of Elucidat, in this week’s show. They discuss how technology can support communication and personalized learning, and how companies can scale online training beyond Zoom.


Technology Can Support Communication and Training

Technology can support communication and training through engaging, immersive online learning experiences, Simon says. He and his partners built Elucidat to make online learning scalable. Thus far, they’ve supported 17 million learners. Tom asks how the pandemic has impacted e-learning. Simon describes three ways COVID-19 has changed the industry:

  • There’s a shift away from face-to-face training;
  • Organizations respond to change more quickly;
  • More data is being delivered.

He describes how Elucidat is supporting organizations to make the shift from in-person to online training.

Personalizing Training

“We all consume training differently,” says Tom. He asks how Elucidat approaches the differences in how people learn. Simon responds, “A philosophy that we have underpinned our product by is people-centered learning. We have a philosophy around six pillars: respecting time is one of those, and being personal is another. That’s really about respecting the audience, taking time to understand their individual needs, context and perspectives, and designing learning experiences that take those into account and adapting to them… [Using] multiple ways to invite someone in and support them in a way that’s comfortable and contextually right for them, but also in the format that works for them as well.” He describes how Elucidat supports personalization by enabling organizations to crowdsource their expertise. “If you’re going to use someone’s time wisely,” he argues, “you just need to give them what is relevant to them, not everything… What the technology does is to support core messages so that you can adapt, but not replicate everything all of the time.”

Scaling Beyond Zoom

Tom asks Simon how training can scale beyond the limitations of Zoom. “What we see is that the sustainable, longer-term strategy here… is to build digital online training experiences that can… be designed and iterated to really have that effect [the same effect as Zoom], but… can be rolled out in a consistent way,” Simon replies. “It’s a way of working that can actually be not only scaled, but lead to a higher quality over time, by pinpointing through data and analysis what’s working out there, and if it’s having the desired effect on the organization and its record-keeping.”



Simon Greany on LinkedIn