By Jack Hoey

At a recent industry conference, I attended a CEO roundtable discussion of corporate ethics. At one point the discussion leader asked the CEOs how many of them had published corporate codes of ethics. Several hands went up; many heads nodded approvingly.

One CEO, however, challenged that approach. He argued that ethics stem from values, not rules, and that setting ethical standards without linking them to clearly understood values is useless.

In my opinion, he raised an interesting point. There are two ways leaders seek to raise the ethical standards of organizations. One approach sets rules that prohibit undesirable behavior. The other approach encourages desirable behavior by linking it with high aspirations.

Rules were meant to be broken

Rule-based approaches are straightforward and objective. They make clear what is prohibited. But there is a problem with improving ethics by setting rules: Behavior tends to degenerate to the lowest acceptable level. The system focuses on the line between acceptable and unacceptable behavior. As a result, some people will walk as close to that line as they can without actually crossing it.

The rule, “Don’t lie,” for example, doesn’t specifically require that you tell the truth. You can fulfill it by using weasel-words just as readily as by truth-telling.

The absence of dishonesty is not the same thing as truth, just as kindness is more than the absence of cruelty and fairness is more than the absence of oppression. The virtues that color our ethical concepts are much more than the absence of evil. They require the presence of good things that we value.

Ethics cannot stand alone

Ethical systems help us to make decisions consistent with our values in a wide range of circumstances and moral dilemmas. Put another way, the role of ethics is to translate values into conduct. Without well-understood values, ethical reasoning has nothing to translate. The results of ethics depend entirely upon the values that provide its context.

For example, consider the raging controversy about “offshoring.” Some companies have been closing U.S. operations and sourcing products and services from third-world countries. Is this ethical? If the highest value of any institution is its contribution to the society in which it operates, one could argue that it’s wrong to bring the pain of economic dislocation on a community simply to fatten shareholder profits.

Others question why it is right to favor middle-class workers in one country over people struggling to escape poverty in another.

A third view is that economic institutions must make wise decisions within an economic framework. If its leaders make decisions based on their ideas of social good, they are likely to achieve neither economic nor social goals.

Which ethical position is correct? It depends on what is valued most highly. The problem we face as a society is that there is no chance of reaching agreement, since the argument focuses only on the differing conclusions and not the values that lead to them.

This issue underscores the limitations of ethical systems: They will not necessarily lead us to the highest and best choices. Our ethical choices will only be as wise as the values that inform them.

What values inform the choices you make as a leader? Do they comprise a vision of the good that is attractive and motivating to others, or are they selfish and small?

Each of us is responsible for our contribution to the society in which we live. Will you contribute the best of which you’re capable, or something less?

Jack B. Hoey Jr. is president of Coastal Glass Distributors, a leading glass fabricator based in North Charleston. He can be reached at jhoey@coastalglassdist.com.

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