Ascendant Compliance Conference Takeaways: 10 Tools of Behavioral Ethics

Hope and fear play a major role in behavior ethics. Behavior ethics is teaching us that we are teaching ethics all wrong. We cannot rationally try to persuade people to act ethically.

People see themselves as ethical, but often don’t see the ethics of the situation. Behavior ethics gives us tools to help people make a more ethical decision.

Set the moral compass in the ethical direction.

Does hope and fear filter into the topic of behavioral ethics? Well, that was the underlying theme that started off Ascendant’s Fall conference: Compliance Disruptors: Seismic Shifts of the Regulatory Landscape. The pre-conference session started out with an incredible presentation on incorporating behavioral ethics into your everyday culture of compliance. Keynote speaker John Walsh, a longtime advocate of behavioral ethics, provided the top 10 tools of behavioral ethics for compliance professionals to consider.

John Walsh’s 10 tools of behavioral ethics: 

  1. Do not be afraid to draw bright lines
    Ethical fading is a slippery slope. Everyone is able and even willing to cheat so long as they feel good about themselves. Ethical fading usually begins with small unethical behavior breaches, but when it starts to feel bad, then people will stop the behavior. Draw a bright line of honest! Don’t tolerate the behavior. 
  2. Use ethical framing to your advantage
    Framing tells us that we are more likely to make an ethical decision if we are aware that there is an ethical aspect to the situation. Bring ethics into the decision.
  3. Brainstorm about possible outcomes, because myopia is a very common problem
    Humans tend to fixate on one outcome, so bring the awareness to other outcomes. In the complex world we live in, anything is possible. Ask questions about other options, and present other outcomes for consideration.
  4. Say it out loud – “Everyone else is not doing it!”
    Be the voice of reason within your organization.
  5. Beware of the dynamic of distancing
    Distancing allows people to process situations unethically because they distance themselves from the situation. Don’t distance yourself from the situation. It’s not someone else’s fault; ethics is everyone’s responsibility.
  6. Be careful about how you burst someone’s behavior bubble
    When you speak up, understand that others may not always believe you because they don’t think anything unethical will happen.
  7. Be careful with after-the-fact penalties; they don’t work
    Fines and penalties after the fact just don’t work. Create remedial actions to modify the behavior. The last step is termination.
  8. Be honest with yourself about your real-world expectations
    The reason we sometimes fail to do the right thing is because when we are in the moment, there are often other motives at play. If you are sitting there silent, you will not do well as a compliance professional. Compliance needs to be the voice of reason, and a loud voice at that.
  9. Be open to real-world motivations
    Compliance training often lacks effectiveness because of the many variables in play. Consider people, personalities, circumstances, etc.
  10. Stay true to yourself!
    We have to recognize that we are also subject to ethical fading because we are human.

The reality is that Compliance professionals need to build their arsenal to make training more effective. Additionally, Compliance professions need to train their employees to view all situations as ethical situations and not just business situations – because in reality, almost every business decision affecting investment advisers is an ethical consideration! Set the moral compass in the ethical direction.


Subscribe to CSS Blog

CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.

Loading form...

Latest Content

Countdown to CCPA: Are You Ready to Comply with New Data Privacy Requirements?

With less than one month before the California Consumer Privacy Act (CCPA) is effective, companies are preparing to update their cybersecurity programs. Many must address the regulation’s new data privacy requirements, which have caught some financial institutions off guard. Modeled to some extent after the European Union’s General Data Protection Regulation (GDPR), the CCPA provides … Continued

ESMA Updates AIFMD Q&A on Reporting to National Competent Authorities

The European Securities and Markets Authority (ESMA) has updated its Questions and Answers on the Alternative Investment Fund Managers Directive (AIFMD). One new Q&A has been added with regard to reporting to National Competent Authorities. ESMA has provided clarification on reporting on liquidity stress tests for closed-ended unleveraged Alternative Investment Funds (AIFs). These AIFs are exempt from the … Continued

CSS Named to RegTech 100 List of World’s Most Innovative RegTech Companies

NEW YORK – Compliance Solutions Strategies (CSS) is proud to announce its inclusion in the RegTech 100 for 2020, a list recognizing the world’s most innovative RegTech companies compiled by RegTech Analyst, a specialist research firm. “We are honored to be selected as one of the most innovative companies within such a competitive and evolving … Continued