Ethics was all over the place at Enron. When Professor Sam Bodily and I visited the company in 2000, we saw the company’s code of ethics posted in elevators, hallways, and cafeterias. The company’s CEO, Ken Lay, was the son of a Baptist preacher and annually urged the employees to be ethical. Yet all the words, signs, and exhortations couldn’t prevent Enron’s spectacular implosion in the fall of 2001 in reaction to revelations of fraudulent bookkeeping, market manipulation, conflicts of interest, and an avaricious trading culture—Enron’s trading counterparties simply deserted the firm. Of all the arresting aspects in the story of Enron, the disparity between words and deeds is one of the most astonishing. They didn’t walk the talk.
Cynics will say that we should expect nothing else: people are susceptible to all kinds of temptations; incentives, power, and pay are corrupting; and talk is cheap–it is easy to say things just to make yourself look good. Ultimately, you can’t force people to believe in a set of values. Others will point to the latest Gallup Poll, which shows that business executives rank relatively low in honesty and ethics and just ahead of telemarketers and Members of Congress. The cynics will say that imposing a culture of ethical dealing on business people is like putting lipstick on a pig.
Most people recoil from the thought of working in that kind of environment. We want to be proud of our place of work. Fortunately, the business world offers a host of counterexamples, companies that talk openly about the importance of ethical behavior and then walk the talk. You can find examples of these companies in published lists of trustworthy companies at Forbes/Audit Integrity, Ethisphere, and at Trust Across America (TAA). Smithfield Foods (which, as they say here in Virginia, is “just down the road a piece,”) ranked #1 in the 2011 TAA listing. Leaders of such companies are not shy to discuss the importance of ethical dealing: John Mackey (Whole Foods), Tom Linebarger (Cummins Inc.), and Indra Nooyi (PepsiCo). A truism in management and family life is “if you can’t talk about it, it won’t get done.” Making progress on anything important is not a matter of giving orders: one must communicate, engage, enlist, and inspire others. So it is with creating a community of integrity. The best leaders get this and use plenty of opportunities to talk about integrity in the workplace.
To be a community of integrity is not a once-and-done decision. It is an every day choice that we must make. Here, at the start of 2012, I am writing to ask you to reaffirm our vision and our commitment to walk the talk.
Surely we can agree on the values that will shape Darden to be the community of our aspirations. UVA and the Darden Mission Statement call us to do so. We share expectations that create a community of trust. Three years ago, the faculty reaffirmed the Darden Mission Statement. It commits us to graduate “principled leaders.” The Board of Visitors of the University endorsed the University Code of Ethics. It states that, “We do not condone dishonesty in any form by anyone.” Why should we rally behind the values embedded in the Mission and Code? I can think of at least three reasons:
· We want to create a sustainable legacy for Darden. To incorporate ethics into our workplace mindset is to think about the kind of community that we would like to live in, and that succeeding generations will inherit.
· Ethical behavior builds trust and dividends of trust are valuable. The foremost dividend is an unimpeachable reputation. Equally important, ethics and trust build strong teams and strong leadership. Stronger teams and leaders result in more agile and creative responses to problems. Ethical behavior contributes to the strength of teams and leadership by aligning employees around shared values, and building confidence and loyalty.
· Darden can’t afford the costs of doing otherwise. We cannot afford to lose one shred of our reputation; we cannot afford to lose one talented member of our community, applicant, or corporate partner over an ethical lapse; and we cannot afford to lose our self-confidence and self-respect.
Here’s the bottom line: we expect each other to manage, study, lead, and work with integrity. To animate this expectation, (and to address the cynics) I ask two commitments of you in 2012.
First, encourage others around you to do what’s right. We are not an “anything goes” community. We have mutual expectations for exemplary behavior. No number of messages from the Dean can top the impact of peer expectations. A community is only as strong as its most vulnerable link. Help those who may be headed in the wrong direction. Speak up for our values.
Second, if you see something, say something. The UVA Honor System provides representatives with whom students and professors can share their concerns on a confidential basis. Similarly, faculty and staff members can share concerns with senior leaders, me, Brad Holland, University Ombudsman (434- 924-7819, firstname.lastname@example.org), and/or Barbara Deily, Chief Audit Executive of the University (434-924-4110, email@example.com). The mark of a good organization is not that it never has ethical lapses, but rather what it does about them. At Darden we must get the facts and take appropriate action as fast as possible.
High-performance organizations take integrity seriously—they talk about it regularly, often starting with the CEO. It is never too early or late to talk about integrity. People get distracted, confused, or forgetful. We can all use conversational reminders about what is important. Darden is, and aspires to remain, a high-performance organization; for us, striving to be a community of integrity is not an afterthought; it is where that high performance starts from.
The handshake is a sign of trust. Let us grasp hands with one another in a commitment to integrity in all we do at Darden in 2012.
And Happy New Year!