Is Ethics Training ‘Full of Sound and Fury, Signifying Nothing”

March is Ethics Awareness Month in the insurance and financial services industries, and this seems an appropriate time to suggest that the majority of what passes for “ethics training” is having little or no effect on individual or corporate behaviors. Case in point: Enron, which has become the poster child for lack of ethical behavior, had an extensive ethics program in place, evidently to little effect.

Yet, as insurance continuing education regulators and others have jumped on the ethics bandwagon, the number of courses on the subject has mushroomed. I find the majority of these courses fall into two basic camps: those that are primarily morality essays, and those that are basically an academic exercise.

Both have key flaws. In the former case, the flaw is that someone has ultimately to decide what is “moral.” Therein lies the path to perdition in our multi-culture and multi-religion society.

In an attempt to avoid such a morass, case studies are sometimes used, but the choices are often so blatantly obvious—Should an agent lie to a client or tell the truth? Is it ever acceptable for an adjuster to accept favors/kickbacks from a body shop? Should an underwriter allow a powerful agent to coerce him/her into conveniently overlooking underwriting requirements for a special client?—that the thinking person’s response would likely be “well, DUH!”

Perhaps those who choose the academic path are hoping to avoid such obvious choices by sticking to the esoteric world of philosophical issues. That way the class can be taught and interesting discussions take place—and, of course, the exam can be passed—without any student actually being forced into the awkward position of having to make a real choice.

Perhaps the problem lies in a basic misunderstanding of the subject. Morals are not ethics, and ethics are not morals. Let me define the terms:

Moral decisions (right vs. wrong): Honesty vs. lying, paying vs. stealing, playing by the rules vs. cheating.
Ethical decisions (right vs. right): Honesty vs. loyalty (I need to honestly answer your question vs. I promised to keep the information confidential); short-term vs. long-term (go on vacation with the kids vs. saving for their college costs); justice vs. mercy (“you embezzled money, so you’re fired” vs. “look, I know you’re having problems at home, so let’s work out a payback schedule and see if we can make sure this never happens again”); individual vs. community (“I know a college degree from night school will help you finally get out of that dead end job, but the kids hardly ever see you now”).

The concept of right vs. right originated with Rushworth M. Kidder, Ph.D., founder and president of the Institute for Global Ethics in Camden, Maine (www.globalethics.org). He discusses the concept of right vs. right and other issues involved in resolving ethical dilemmas in his book How Good People Make Tough Choices, published by Simon & Schuster. By following Dr. Kidder’s lead, we can offer insurance practitioners some real guidance, avoiding both the theory of academia and the morass of conflicting moralities.

In the spirit of Dr. Kidder’s philosophy, I developed a workshop, “Street-Level Ethics,” for the American Institute for CPCU. The workshop materials include a teaching outline, handouts, PowerPoint slides, and a series of case studies based on my 30+ years of experience in the insurance business. The workshop materials are downloadable at no charge on the American Institute’s Web site, www.aicpcu.org.

Among other things, I included in the materials the guidelines below that can be used to help determine how to handle a situation that involves a true ethical dilemma:

Situation-based: What is the best outcome possible given the circumstances you face?

Rule-based: Follow the rules, and let the chips fall where they may.

People-based: Following the Golden Rule, what would you have others do if faced by the same situation?

The object when discussing an ethical dilemma is not to arrive at THE right answer. If that were possible, the case is not a true ethical dilemma and serves no purpose. The object is for each participant in the discussion to confront the complexity of the issue, recognize the possibilities of multiple solutions, and then begin formulating a personal approach (based upon one or a combination of the three ethical approaches identified) to choosing a solution when confronted by such situations in their own daily activities.

Participants should also begin to recognize the value of a Code of Ethics in providing a “roadmap” to follow in such situations, as opposed to wandering lost in the ethical wilderness. It should be made clear such codes are not meant to take the place of individual accountability. But when an individual joins a profession or earns a designation that carries with it the explicit or assumed acceptance of such a code, the public has a right to expect that person, at a minimum, to use the code as a strong determinant of his or her individual behavior.

If the study of ethics is to become realistic and not devolve into arguments over morals or theory, students should come to understand that “right versus wrong” is not an ethical issue and has no place in ethical decision-making. Only those situations that survive the “right versus wrong” filter and emerge as true “right versus right” scenarios should have the light of ethical analysis shone upon them.

Anything less, and the discussion may be better described by Shakespeare’s famous description of life in Macbeth: “full of sound and fury, signifying nothing.”

Which, I believe, is where we came in.

Chris Amrhein, AAI, is a speaker, seminar leader, and industry consultant who began his thirty years in the insurance industry as an agent. Feel free to contact him at chris@insuranceisfun.com.