I ended my previous post with a warning to insurance executives and managers – you can’t rely on a personal commitment to ‘doing the right thing’ when it comes to embedding ethics into your firm’s working habits. That requires particular knowledge and skill, and this post looks at six steps that can be taken to build those capabilities.
The first step is to become familiar with the language of ethics – this means taking a basic course in ethics to learn what it means and how it applies to financial services in general and insurance in particular (the CII has a good on-line course). If you don’t understand the language of ethics, then you can’t be sure if what you listening to matters, or what you’re saying makes sense.
Then build a picture of the key ethical issues for your firm and become familiar with the trends, controls and questions associated with them. In essence, tune into the particular ethics that your firm needs to be good at. If you’re on the ‘senior management function’ list of the UK regulator, then you will of course have already done this!?
The third step is to practice talking about ethics. Think of it this way: if you only talk about the ethics of the decisions you’ve taken when you’re in the middle of an ethical crisis, then you’re likely to come over as out of tune and even worse, missing the point. Don’t just think about regulators as the audience – it could be the public. You may think of this as a rather soft skill – standing around the coffee machine talking about ‘doing the right thing’. It’s not – ethical debate is often challenging and revealing.
Then learn how the prevailing culture inside your firm supports or hinders ethical discussions and ethical decision making. This involves more than just relying on the odd opinion or two – it needs a structured look at the firm’s ethical culture.
Step five is about making sure that when a management discussion touches on some ethical questions, that these are openly debated and then resolved. This avoids the ethical dimension being swept under the carpet and left until the problems start cropping up. It also avoids one of the main warning signs of poor leadership on ethics (outlined in this earlier post), when decisions subsequently become rationalised so as to give them more of an ethical quality than actually happened in practice.
A good technique to use when discussing a tricky ethical situation is to frame it into two distinct choices, one based upon paying attention to the ethical side, the other based upon ignoring it. Researchers have found that people then feel more confident to choose the ethical option when it is clearly juxtaposed against the unethical option.
And finally, look at how easy or hard it is for others in your firm to have similar ethical conversations. As mentioned in this earlier post, a vital aspect of ethical leadership is to shape your firm so that others are able to follow your example. ‘Tone from the top’ is important, but not enough – you have to ensure that the right ‘tone from the middle’ happens as well.
So, you can see that to be good at leadership on ethics doesn’t involve a long roll call of training course after training course of increasingly detailed ‘technical ethics’ (that’s for people like me!). It does involve two essential ingredients, which luckily are what it ‘says on the tin’: know what ethics is and show leadership on it.