An illuminating op-ed by professors Mark Bazerman and Ann Tenbrunsel in the Times, “Stumbling Into Bad Behavior,” explaining the phenomenon known as “ethical fading,” in other words, unethical conduct which is unconscious in nature (as much apparently is) – mainly in relation to business practices, but the lessons translate. Once again we’re confronted with evidence of the unpopular truth that conscious transgression is really only the tip of the ethical iceberg, and that to limit the sphere of justice, either “worldly” or divine, to actions that are premeditated/intentional is woefully unwise, or dare I say, irresponsible. In other words, what good news it might be if forgiveness were to extend to facets of behavior or personality which operate outside of our ability to control them:

folder-4Regulators, prosecutors and journalists tend to focus on corruption caused by willful actions or ignorance. But in our research, and in the work of other scholars who study the psychology of behavioral ethics, we have found that much unethical conduct that goes on, whether in social life or work life, happens because people are unconsciously fooling themselves. They overlook transgressions — bending a rule to help a colleague, overlooking information that might damage the reputation of a client — because it is in their interest to do so.

The underlying psychology helps explain why ethical lapses in the corporate world seem so pervasive and intractable. It also explains why sanctions, like fines and penalties, can have the perverse effect of increasing the undesirable behaviors they are designed to discourage.

When we fail to notice that a decision has an ethical component, we are able to behave unethically while maintaining a positive self-image. No wonder, then, that our research shows that people consistently believe themselves to be more ethical than they are.

08-Vested-InterestIn addition to preventing us from noticing our own unethical conduct, ethical fading causes us to overlook the unethical behavior of others. In the run-up to the financial crisis, corporate boards, auditing firms, credit-rating agencies and other parties had easy access to damning data that they should have noticed and reported. Yet they didn’t do so, at least in part because of “motivated blindness” — the tendency to overlook information that works against one’s best interest. Ample research shows that people who have a vested self-interest, even the most honest among us, have difficulty being objective. Worse yet, they fail to recognize their lack of objectivity.

Our legal system often focuses on whether unethical behavior represents “willful misconduct” or “gross negligence.” Typically people are only held accountable if their unethical decisions appear to have been intentional — and of course, if they consciously make such decisions, they should be. But unintentional influences on unethical behavior can have equally damaging outcomes.

Our confidence in our own integrity is frequently overrated. Good people unknowingly contribute to unethical actions, so reforms need to address the often hidden influences on our behavior. Auditors should only audit; they should not be allowed to sell other services or profit from pleasing their customers. Similarly, if we want credit-rating agencies to be objective, they need to keep an appropriate distance from the issuers of the securities they assess. True reform needs to go beyond fines and disclosures; if we are to truly eliminate conflicts of interest we must understand the psychology behind them.