Seven signs of ethical collapse (2012)

&gt; To front-line employees, the line between right and wrong is very bright. Something happens to people as they climb up through management, she said. The bright line seems to fade.<p>This doesn&#x27;t seem like a mystery to me. In my experience the more you climb up through management the more you leave the realm of clear-cut choices and enter a world of nasty trade-offs. Do that enough times, and get your head spun around enough by trade-offs you don&#x27;t know how to navigate but have to deal with immediately, and you&#x27;ll get a kind of &quot;trade off numbness&quot;.

I immediately sanity checked this with three examples.<p>SBF fit amusingly well. His fraud had all of these, with Effective Altruism providing an extreme example of how goodness in some areas atones for evil in others.<p>Stanford&#x27;s president Marc Tessier-Lavigne resigned after his reputation was found to be based on fraudulent research. Descriptions that I&#x27;ve read from those in his lab showed most of these.<p>Enron is too canonical an example to ignore. Yes, it had all of these.

On the one hand, the article and the talk it is about stresses the severity of the moral transgression: &quot;moral meltdowns&quot;, &quot;really crossed very bright lines&quot;, &quot;ethical collapse&quot;.<p>But on the other hand, the implications of the moral failure for the moral status of the company and its employees is pushed far away into the corner:<p>- &quot;These are great companies, great organizations, good people&quot;<p>- &quot;misguided companies&quot;<p>- &quot;good people at great companies&quot;<p>The list that follows is something you can retroactively apply to numerous instances of corporate wrongdoing, but also provides an enormous amount of false positives and a false negatives.<p>Thousands of businesses don&#x27;t meet these criteria and yet are morally compromised (e.g. Cargill). Thousands of businesses do meet these criteria and yet aren&#x27;t going to be called out as &quot;ethically collapsed&quot; by the author <i>before</i> they&#x27;ve been outed and widely accepted as failed.

Seven signs of ethical collapse:<p>1. Pressure to maintain numbers 2. Fear and silence 3. Young ‘uns and a bigger-than-life CEO 4. Weak board of directors 5. Conflicts of interest overlooked or unaddressed 6. Innovation like no other company 7. Goodness in some areas atones for evil in others<p>Umberto Eco&#x27;s 14 signs of fascism:<p>1. The cult of tradition. 2. The rejection of modernism. 3. The cult of action for action&#x27;s sake. 4. Disagreement is treason. 5. Fear of difference. 6. Appeal to social frustration. 7. The obsession with a plot. 8. The humiliation by the wealth and force of their enemies. 9. Pacifism is trafficking with the enemy. 10. Contempt for the weak. 11. Everybody is educated to become a hero. 12. Machismo and weaponry. 13. Selective populism. 14. Ur-Fascism speaks Newspeak.<p>Each list contains symptoms of some degenerating organisation. However, I can easily find counterexamples of successful organisations which demonstrate one or more of these qualities. In fact, these organisations may be successful <i>because</i> they exhibit one or more of these qualities. This way of understanding the world is entirely juvenile and unfit as an evaluative framework.

Part of the problem with this sort of analysis is that hindsight is always 20&#x2F;20.<p>You may think your company has is transparent and has a wonderful process for handling conflicts of interest. Then only when things collapse do people come out of the woodwork and start dishing drama.<p>If they have a fear and suppression program that works, you would never hear about it!

This article, and especially point 2 (Fear and silence) is a great rebuttal against the flaw of the Radical Candor&#x2F;Manipulative Insincerity framework; which considers apathy towards issues in the workplace as tantamount to being manipulative without considering why people resort to this behavior in the first place.<p>It is not easy for an single employee to change deeply embedded negative organizational behaviors, and therefore it is better for the employee to work with the goal of reward maximization (through a focus on total compensation and hitting numbers) and feigning ignorance or not bothering to report issues that cross ethical lines, which may backfire and cause trouble for the employee (constructive dismissal, smear campaigns, lawsuits etc.)

Incentives are a hell of a drug.<p>My last job was at a company where the CEO had the vision and the personality to lead the company through a necessary transformation (it was in a long-tail business).<p>The individual contributors were smart, experienced, and good people.<p>But between the top and the bottom there was a complete disconnect, as people were driven by incentives that rewarded individuals and teams for things that did not serve the company as a whole.<p>Not an unusual scenario in any large organization, but it was beyond frustrating.

The WayBack Machine&#x27;s 2018 snapshot &lt;<a href="https:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20181008124103&#x2F;https:&#x2F;&#x2F;www.scu.edu&#x2F;ethics&#x2F;focus-areas&#x2F;business-ethics&#x2F;resources&#x2F;seven-signs-of-ethical-collapse&#x2F;" rel="nofollow noreferrer">https:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20181008124103&#x2F;https:&#x2F;&#x2F;www.scu.e...</a>&gt; dates this article to (2007)

Not exactly clear-cut to identify... 7 different subjective signals?<p>Sounds too much like astrology where 10&#x2F;12 different horoscopes would apply to most people anyways.<p>Before subscribing to something like this, I&#x27;d want to see hard data around how common each of these signals is in a random sample of companies(possibly even with a breakdown by industry)

&gt; 4. A Weak Board of Directors<p>&gt; Weak boards tend to have inexperienced members, often ones who are too young to have experienced a complete business cycle, which was often the case with companies in the dot-com boom.<p>&gt; Often they have ethical conflicts of interest as well, in terms of consulting arrangements, related party transactions, …<p>Sound familiar?

Feels like half of this advice is directed at people that wouldn‘t profit from it. The reason people higher up are&#x2F;become less ethical is because that usually is a quality needed to rise.

1. Pressure to maintain numbers<p>2. Fear and silence<p>3. Young ‘uns and a bigger-than-life CEO<p>4. Weak board of directors<p>5. Conflicts of interest overlooked or unaddressed<p>6. Innovation like no other company<p>7. Goodness in some areas atones for evil in others

The direction of progress is the direction of increasing accountability<p>good book about that - <a href="https:&#x2F;&#x2F;www.amazon.com&#x2F;Reckoning-Financial-Accountability-Rise-Nations&#x2F;dp&#x2F;0465031528&#x2F;" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.amazon.com&#x2F;Reckoning-Financial-Accountability-Ri...</a> tldr thesis is that the invention of double entry bookkeeping is the thing that has caused modern prosperity, not capitalism. we can only cooperate to the extent that we can detect cheating. Consider a 1600s merchant – without the ability to detect fraud, how can you give your goods to a shipping company? Capitalism is only possible if you can count your capital! a memorable example was a French king (Louis XV?) who bankrupted the realm because he didn’t know how much money he had.

Pressure to maintain numbers Fear and silence Young ‘uns and a bigger-than-life CEO Weak board of directors Conflicts of interest overlooked or unaddressed Innovation like no other company Goodness in some areas atones for evil in others<p>I was hoping for something, but sadly feel these all apply to our majority government in many world countries today, don&#x27;t they?

Unsurprisingly, there&#x27;s some gross oversimplification going on here, but this is interesting stuff.

That&#x27;s 2012. Now we have a TikTok generation. After seeing interviews with Free Palestine protesters and general TikTok crowd, I fear US has no future and it will be an easy pick for China. These people are from prestigious universities but they are so dumb. Very, very dumb. In 20 years they will be working for US government ( because Yale, Harvard). TikTok is a weapon of mass destruction.

Show me one company not checking at least one of the boxes...

So economy in the aggregate is in the midst of ethical collapse?<p>You can find numerous examples across institutions and industry that meet all these criteria.<p>1. Pressure to maintain numbers… line must go up economy.<p>2. Fear and silence… quiet quitting, workers keep going in while expressing fear in private<p>3. Young uns and bigger than life CEO… see tech, finance, academia, politics exploitation of naive grads<p>4. Weak board of directors… voters and workers are subservient to 1%<p>5. Conflicts of interest overlooked… why do so few have so much reach into all our lives?<p>6. Innovation like no other… US capitalism is unsurpassed! World cannot do without it!! Resell yesterday with faster chips and flatter design!! … metrics hacks line up!!<p>7. Goodness in some areas atones for evil in others… we are burning up the planet for the next generation but how about that iPhone 15, dick rockets into space, and those massive F350s!

&quot;Our competitor is getting away with it&quot;

sounds like google

(2012)

Here they are:<p>1. Pressure to maintain numbers<p>2. Fear and silence<p>3. Young ‘uns and a bigger-than-life CEO<p>4. Weak board of directors<p>5. Conflicts of interest overlooked or unaddressed<p>6. Innovation like no other company<p>7. Goodness in some areas atones for evil in others

(2012)<p>&gt; “I hire them just like me: smart, poor, and want to be rich,” she quoted former Tyco CEO Dennis Kozlowski as saying.<p>Some time later... &quot;Ex-Tyco CEO Kozlowski says he stole out of pure greed&quot;<p>( <a href="https:&#x2F;&#x2F;www.reuters.com&#x2F;article&#x2F;us-tyco-kozlowski-release-idUSBRE9B417820131205&#x2F;" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.reuters.com&#x2F;article&#x2F;us-tyco-kozlowski-release-id...</a> )

Fundamentally ethics are a luxury. I might have some if I ever become rich and financially independent of the rest of society, but until that point I will not have any.<p>And even then, it comes after other needs like comfort and achieving my own goals. I won&#x27;t sacrifice much of anything for ethics.