LRN Perspectives

Transforming Corporate Culture Through Behavioral Ethics: A Conversation With Alexandre di Miceli

November 19, 2019 LRN Corporation
 

“For the business world, behavioral ethics plays a key role by shedding light on the situational and psychological factors that can encourage or discourage ethical behavior in the workplace.”

 – Alexandre di Miceli

This episode of the Principled podcast is hosted by Ben DiPietro, Editor of LRN’s ENC Pulse Newsletter, sits down to talk with Alexandre di Miceli, a professor, consultant, researcher, and expert on corporate governance and business ethics. Alexandre is a founding partner of Direzione Management Consulting in Brazil and has authored many books, including The Virtuous Barrel: How To Transform Corporate Scandals into Good Business via Behavioral Ethics. Behavioral ethics is a new and multi-disciplinary field, which addresses two questions: how do people actually behave when exposed to ethical dilemmas and why do good people do bad things? Because behavioral ethics addresses the inner psychological factors and the contextual pressures that influence a person’s transgressions, Alexandre explains how it has greatly changed how companies address Ethics and Compliance issues.

WHAT YOU'LL LEARN THIS EPISODE...

  • [1:12] How did you develop an interest in behavioral ethics, and what led you down this career path?
  • [1:23] Alexandre’s interest in the field came from his frustration with the old carrot-and-stick paradigm, and his work in academia has allowed him to build a bridge from there to corporations to help build a corporate governance model.
  • [4:17] Are companies understanding the importance of developing an ethical corporate culture, or is there still some way to go?
  • [4:27] Organizations need to understand that ethical issues do not result from a few bad apples, but rather from well-intentioned people rationalizing unethical actions and succumbing to daily pressures. In addition, organizations should focus on three key elements to ensure ethical decision making: ethical culture, a virtuous leadership style, and the pursuit of a higher purpose beyond profits.
  • [6:49] What role does emotion play in the study of behavioral ethics?
  • [7:02] Research has shown that our reasoning is rather limited and that our decisions are strongly influenced by our distorted version of reality. Decisions are therefore predictable, but not rational. Research has also shown that when faced with an ethical dilemma, people behave virtuously, and are driven by intuition, emotion, and empathy.
  • [8:52] Is there an economic case to be made for using behavioral ethics?
  • [9:06] Alexandre’s research has shown that companies which score high in unethical behavior are less profitable. For institutional investors interested in environmental, social, and governance issues, ethical culture, as measured by employee reviews, is likely to be a relevant source of information. Boards should measure ethical culture in an objective manner, going far beyond employee engagement surveys.
  • [11:00] What are two challenges companies face when they try to use behavioral ethics and what would you suggest they do to overcome those challenges?
  • [11:18] The first is to rethink two fundamental questions: what does ‘business success’ mean and what should be the role of senior-level managers? A successful company is one that pursues a broader purpose beyond profits. The second is to build an organizational culture that is less hierarchical, rational and profit-driven and, instead, move towards one that is more egalitarian, humane, and trust-based.
  • [13:45] Are there ethical considerations to companies using behavioral ethics on their employees, in light of things like artificial intelligence and technology?
  • [14:05] More research needs to be conducted to have a conclusive answer. There are ethical issues to do with the use of algorithms to promote, hire and dismiss people, which may lead to unintended biases. There are also concerns with companies surveilling employees and potentially knowing them better than they know themselves. Technology can move companies away from trusting and toward controlling their employees, which will erode their sense of intrinsic motivation, so leaders must consciously move that pendulum back toward trust.

    Don’t miss our next episode! Be sure to subscribe to Principled on Spotify, Apple Podcasts, Google Play or wherever you listen to podcasts.
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