Anticipatory Ethics: The New Frontier

Article by Herb Rubenstein

Introduction

As much as we would like to think that we are improving in the field of ethics and ethical behavior, the ethical failures of Volkswagen, Wells Fargo, Russia’s doping scandal, sexual abuse by UN Peacekeepers in Central Africa Republic, fake news stories designed to take advantage of lies to promote political ends, and the corruption scandals of Brazil and South Korea and other countries, all took place in just one year, 2016. And, now in 2020, things have gotten much worse regarding ethics throughout the world. This article makes the case that pressures to be unethical are growing right in front of our eyes and we need to be more than vigilant about policing ethical failures and setting rigorous ethical standards.

What is needed is a system I call “Anticipatory Ethics.” This system is designed to predict where there will be future ethical lapses and take preemptive measures to thwart off the expected attack on ethics. I will use four examples – one from the corporate sector, one from the nonprofit sector, one from the educational sector, and one from the government sector. Each of these examples shows clearly that foresighted thinkers and ethical leaders could easily have predicted cheating and unethical behavior exactly the way the unethical behavior took place. There is an old says, “If you cannot measure it, you cannot manage it.”

Prediction is at the Heart of Prevention

Regarding ethics, I would like to paraphrase that statement. “if you cannot predict it, you cannot stop it” Four Examples of Unethical Behavior Over the past decade, tests that were basically only “high stakes” for students have become high stakes for schools in the US. With the new law called “No Child Left Behind,” schools could lose funding, teachers could lose their jobs, schools could be closed, and administrators could be fired if student test scores were low or did not improve or actually declined. Thus, high-stakes tests became a big-time win-or-lose situation for teachers and educators. I will be the first to tell you that overall I bet teachers and school administrators are among the most ethical people on the planet.

However, you did not have to be a genius or a futurist to predict that when these “old” tests achieved new importance, teachers and school administrators would conspire to cheat on the tests, even if that mean erasing the wrong answers by their students and filling in the right answers so their test scores would be acceptable. And, that is exactly what happened in Atlanta, in Pennsylvania and in other areas of the country. Cheating began on a large scale. Could it have been avoided? Yes, if we can predict it in advance, we can stop it in advance. We could have put into place internal controls so this cheating could never have occurred. We could have established a set of very tough penalties for this unethical behavior that would have changed the cost/benefit calculus of those educators who participated in or led the cheating. In government, especially in the US, we would like to believe bribery is not common. We are wrong.

In the coal, oil and gas sectors government creates leases and companies pay a royalty to the government which is a percentage of the amount they say they produce from the leased property. Millions and millions of dollars are at stake, and companies are under pressure to show big profits and government agents who are supposed to collect the royalties often have a price, and that price of being bought off is low enough that both the companies and the regulators participate in an operation where the government does not collect all of the royalties due to the treasury and the company and the regulators share some of the royalty payments “saved” by this cozy relationship. This is exactly what happened with US Department of Interior officials in Lakewood, Colorado. New regulations on emissions standards and miles per gallon are getting more and more attention and becoming “high stakes.”

If the car you produce emits too much pollution or has too low of a miles per gallon performance, then some governments will not let you sell the cars. Now, you don’t have to be a genius or a futurist to predict that companies will find a way to cheat and they will report their cars meet the emission standards when they know they do not or they get a certain number of miles per gallon of gas or diesel when they know they do not. The Volkswagen ethical debacle should come as no surprise to anyone, especially higherups at Volkswagen or their informed investors. First, Volkswagen lobbied hard, and succeeded, to get governments all around the world to test for emissions in only one manner – in a testing environment and not in regular on the road measurements of actual performance of the vehicle in actual driving condition. This was warning sign number one and it was a huge one. So, a professor and several students at West Virginia University got a grant from the Environmental Protection Agency to allow them to create a real, on the road, actual driving conditions test of the actual emissions coming from cars. The Volkswagen tested emitted almost forty times the amount of pollution that it showed it emitted under the test conditions specified by the government. How did they do this? They put software in their cars that detected that the car was in an emissions testing 3 environment created by the government and shut down much of the operating capacity of the car that was necessary to operation in real driving conditions. The cars passed inspection. Volkswagen cheated, and to this day, the company has not reported the names of the people involved in the cheating or described how the cheating took place in their company.

In the nonprofit sector, even the Red Cross has been an ethics violator. It raised $564 million in 9/11 funding and those who gave it money thought the Red Cross would use it for the victims of 9/11. However, the Red Cross kept over half of the money and put the money into its own pockets for other “operations” and future reserves. (Source: Stanford Social Innovation Review. Ethics and Nonprofits, reported on the web at: https://ssir.org/articles/entry/ethics_and_n onprofits). After great outrage against the Red Cross it redirected the money to more closely align with the purposes for which the donors donated the money. (More on this type of social pressure later in this article).

Lessons Learned

These four examples were all predictable. The Red Cross never told donors how it would spend the money, nor even had a plan that it made public for how it would spend the over one half billion dollars that it solicited and received for 9/11 purposes. Other nonprofits have simply had their top officials walk off with money donated or spent the money on themselves with lavish expenditures. Clearly, there is substantial pressure on nonprofits to raise money, but not similar pressure by donors to make sure that the money they donated was spent the way the donors intended. Anticipatory Ethics We can see ethical challenges coming well before they actually happen. Whether it was the U.S army misrepresenting the numbers of casualties the U.S. or the enemy suffered in Viet Nam, or cheating in sports or doping, or bid rigging on leases on energy projects, since ethical violations are rarely novel or something new, we can predict with some precision that when something new is being measures, someone will cheat and expect not to be caught.

Anticipatory ethics is not just about predicting who will cheat and when. Anticipatory ethics is about knowing this will happen and figuring out a way in advance to stop such cheating from happening. Surely, as bicycling became a big money sport, we could predict a Lance Armstrong type person would cheat, and then threaten all of those who accused him of cheating and doping. The officials of the sport of bicycling looked the other way, when not only should they have anticipated it, they should have done something about it to prevent it from happening in the first place. We can all be assured as measuring the “carbon footprint” or methane leaks from energy operations or the emissions of businesses and their supply chains become high stakes events, there will be cheating in these areas. Similarly, since oil is shipped by rail cars again, it does not take a genius or futurist to predict that some companies and their “transportation contractors” will intentionally misrepresent the flammability of the product they transport. This has already happened and without controls to prevent it, it will happen again and again.

Conclusion

Anticipatory ethics is a new subject for both the academic community and the practitioner community interested in improving ethics in both the United States and the world. Wells Fargo and Volkswagen will not only be punished by government agencies who force them to pay huge fines, they will be punished permanently by individuals and other companies, and governments, who will refuse to do business with them in the future due to these huge ethical violations. Social pressure, transparency, and most importantly, diligence is now required to stop unethical behavior.

This behavior will never be stopped by punishment along, because the one thing you can be sure of is that Wells Fargo and Volkswagen were certain they would not be caught, much less punished. We can’t catch everyone quickly enough who commits unethical acts to stop the real damage to our society, our economy, and the human species (not to mention other species who often lose when humans cheat or act unethically) that such acts cause. That is why we need a new branch of ethics I call “anticipatory ethics.” This new branch of ethics is about predicting the future unethical acts of others before they happen, or figuring out that unethical acts are occurring before any real signs of it are evident. We can lean from the field of predictive analytics, especially human capital analytics, because human cause unethical behavior, machines don’t. Once there was a bank that hired a budding leader in the field of human capital analytics to survey the employees and advise the bank on how well each of the divisions of the bank was doing from a process standpoint. The survey asked operational questions, not ethical questions, and the response rate was very good. When the data were analyzed, most of the bank received flying colors. But, one branch was given very, very low marks. Its people did not follow bank processes even when they knew about them, and the processes in this division of the bank were not clear. When the human capital analytics person gave the report to the bank, the bank laughed it off saying that the division in question, the international division, was its best, most profitable division, and the researcher did not know what she was talking about. Soon after, the international division was found to be routinely violating US banking law, was acting in an unethical manner, and the bank was fined over $50 million dollars. A potential buyer of the bank was able to buy the bank at a discount of over 75% from its original offer made prior to the government catching the bank acting unethically throughout its international division. This story from decades ago shows us the power and the potential failings of “anticipatory ethics.”

We can make all of the predictions that teachers will cheat, the Red Cross will pocket money donated for 9/11 victims, that government agents whose job it is to collect royalties will get in cahoots with the companies they are supposed to oversee and will take bribes in exchange for looking the other way when companies do not pay the royalties they owe to the government. We can even predict that teachers, principals, and school administrators will erase wrong answers and put in correct answers for students on high stakes test in order to keep their jobs, their schools open, and avoid the designation of a “low performing” school. 5 We can predict all of this, but if these predictions do not lead to new internal controls, new watchdog efforts to monitor the actions of the expected future ethical violators, then the predictions will be worse than worthless. These predictions, if they fall on deaf ears, will bolster those who say, “humans are by nature unethical, and there is nothing you or anyone can do about it.

The basic premise of this article is that even if humans are “by nature” or “by opportunity” unethical, there is a lot we can do about it. We can predict it, we can put into place measures that reduce or eliminate the risk of unethical behavior, and we can stop unethical behavior. That is the new battleground in the world. Call it a war on unethical behavior, or just call it good management, now that we have the tools to predict unethical behavior, we have the means to stop it in its tracks.