The Practice of Integrity in Business

Simon Robinson

• Publisher: Palgrave Macmillan
• Year: 2016
• Print ISBN:
  9781137515520
• eBook ISBN:
  9781137515537
• Topic: Business
• Subtopic: Etica aziendale
• Index: Business

This book explores the role of integrity in business and discusses why all leaders seek to have it. The author argues that it is less about 'having' integrity as an attribute, and more about practising it. The Practice of Integrity in Business examines how taking responsibility for ideas, values and practices, as well as accountability and wider creative responsibility for sustaining business, all contribute to the perceived integrity of an organization or business leader. Providing methods through which integrity can be learned, the author demonstrates the importance of practice, learning, dialogue and developing a narrative in forming the basis of trust. The book offers a view of integrity in which ideas, values and practice come together to make business and social sense, and to form the basis of mutual challenge and creativity.

© The Author(s) 2016

S. RobinsonThe Practice of Integrity in BusinessPalgrave Studies in Governance, Leadership and Responsibilityhttps://doi.org/10.1057/978-1-137-51553-7_1

Begin Abstract

1. Philosophy and Integrity

Simon Robinson¹

(1)

Leeds Beckett University, Leeds, UK

Abstract

This chapter sets out the philosophical debate about the meaning of integrity. First, focusing on the case of Arthur Andersen, it examines different philosophical views of integrity, including the integrated self; moral identity; adhering to bottom-line principles, strength of will, the act of judgment; and as a connecting or epistemic virtue. From this will emerge a view of integrity as connective and complex. Alternative, narrower, views of integrity are then critically examined. Focusing on the re-presentation of identity, the chapter concludes by arguing for the importance of responsibility in holding together the different aspects of integrity.

End Abstract

There is a consensus amongst academics and practitioners about the importance of integrity. A survey by the Council for Industry and Higher Education (Archer and Davidson 2008), for instance, suggests that the third most important quality employers want from graduate employees, behind teamwork and communication skills, is integrity. This theme is taken up by the Institute of Chartered Accountancy in England and Wales (ICAEW) in Reporting with Integrity (2009), which aims to establish the utility of integrity. Integrity, it is argued, provides the basis for establishing trust, both in leadership and in the wider profession. This is so at individual and institutional level (cf. Solomon 2007) and is embodied in corporation and individual practice and in the commitment of the wider profession. Hence the engineering professions (Armstrong et al. 1999), for instance, can write of the need to maintain the integrity of the profession. By extension, it is argued for the accounting profession in particular, that integrity leads to reliability of information and judgement, upon which the future of markets, financial systems and even financial policies depend. The absence of integrity was, of course, exemplified in the credit crisis (Lanchester 2010).

The popularity of the term is also reflected in that it remains the most frequently used value referred to in company value or mission statements (Audi and Murphy 2006). And when governance crises occur in different spheres, it is precisely the lack of integrity which is stressed. A good example was the reaction to the scandal of the UK MPs’ misuse of expenses, which had a strong sense that the breakdown of integrity involved a betrayal of the public.¹

It is, however, less clear exactly what the term means in practice. In thirty years’ experience of teaching business ethics to practitioners and conventional students, whenever I ask those with integrity to put their hands up, there are always a handful who claim this prize with alacrity. The majority keep their hands down and look uncertain. Those who keep their hands down reveal interesting reflections, such as ‘integrity is something about me as a person, and I am not sure I know myself that well’, and ‘I can’t judge if I have integrity, it needs someone else to judge that’. When quizzed further, most respondees suggest that integrity matters and that it matters because it involves something about authenticity. Authenticity, of course, is a term ripe for debate. But it would seem to involve something about not just ‘playing the game’, not just ‘wearing a mask’. Hence, integrity is often contrasted with hypocrisy, whose meaning is rooted in acting or playing.

Some suggest integrity involves openness or transparency. Such terms, however, did not resonate with the focus on feelings found in the student responses. Deciding on whether a person has integrity involves making a judgement about that very person. And judgements about the person involve for most people fear of the negative. No one wants to be thought of as lacking integrity. This would involve, in some sense, corruption, a fragmentation (Cottingham 2010). And no person or organization wants to be seen as ‘corrupt’. This suggests that integrity is as much about psychology and relationships as it is about philosophy and morality—as much about (perceived) worth as it is about evident values and principles. This mixture is powerfully brought to the surface in Cormac McCarthy’s book The Road. In an apocalyptic era a man is taking his son across war-scorched America to the coast, which he believes to be free from the bleak, incessant conflict between the survivors. His primary focus is on saving his son from the gangs who roam the streets, and who might rape, kill or even eat his son. He has a gun with precious few bullets left, and with which he threatens even the elderly infirm who come too close. Noting his father’s reaction to people in need, the son poses the simple question ‘are we still the good guys?’ (McCarthy 2007, 65). This is a question about identity and character and demands reflection on his father’s actions and how he views them, indeed on how he judges them. His father defends his attitude and actions, founded in his role as protector of his son. This is what he stands up for, what differentiates him from the lawless gangs they meet. Ultimately it is to do with what his father calls the ‘fire’, which they carry, a metaphor for humanity. But the son’s question raises the challenge about knowing when we have crossed the line from a strong simple defence of people and principles to an action that might in consequence harm others. That is not just about ethics but about how we see the world.

Intriguing as these reflections might be, philosophers such as Audi and Murphy (2006) and Curzer (2014) want more precision about this term integrity. They fear that it is now doing service for all aspects of ethics, a general value term. For most people that is what the term tends to mean, ‘doing the right thing’, but how is that idea actually going to inform practice. Who, after all decides what the right thing is? And how can we be sure what the right thing is?

Defining Integrity

As Cottingham notes (2010), it is perhaps surprising that a systematic focus on integrity does not appear in either Greek thought or the Judeo-Christian tradition. Aristotle focuses on the virtues and argues that these are interconnected, and that a person who practises one will have them all (cf. Cottingham 2010). Prior to Aristotle, Plato focused on the unity of one virtue, with different aspects (Wolf 2009). This sense of unity suggests something of the core meaning of integer or integras as soundness, purity or wholeness (Bosman 2012), with the corresponding meaning of corruption as breaking down, spoiling or decay (ibid.). Related indicators of integrity are honesty, transparency, consistency and so on (Cottingham 2010).

The Judeo-Christian tradition has some references to integrity, such as in Psalm 26. This begins, in the King James translation, ‘Judge me O Lord for I have walked in mine integrity’. The Hebrew root of that translation (tum) is wholeness or completeness. The act of sinning takes something away from that, suggesting integrity as a form of innocence (Cottingham 2010). The verses that follow, however, suggest a general idea of leading an upright or righteous life, rather than providing any specific account of the virtue of integrity, or any idea of unity of ethical perspective. Psalm 86 offers a prayer for psychological or ethical unity, ‘Give me, O Lord, an undivided heart’.

The Christian gospels refer to the importance of finding one’s true self. Even gaining the whole world is not enough to compensate for the loss of oneself (heautos) (Luke 9:25). Later in Luke (15:17) comes the parable of the prodigal son. Of course, he regrets his prodigality, returns from exile and ‘comes to himself’ (eis heauton elthôn; Luke 15:17). There is something in this about a rediscovery of the person’s true self. This is already beginning to take the ideas associated with integrity into identity, and thus to a relational definition of integrity. The prodigal son rediscovered his identity in relation to his father, and doubtless at some point to his brother. Another New Testament source is the Epistle of James. In James 4:8 the author calls for purity of heart, which is the opposite of being ‘double-minded’ (dipsychos). The idea of purity of heart has its analogue in Islam with the concept of ikhlas (cf. Michel 2014) or sincerity.

How, then, do these ideas to look in practice? I will begin to explore this through a case study.

Arthur Andersen

We do not now associate the US accountancy firm of Arthur Andersen with integrity of any sort. On the contrary, after their connection to Enron (Toffler 2003) and the subsequent collapse of both corporations, the firm of Arthur Andersen is seen as a byword for corruption. It was, however, very different at the beginning of a firm which built its reputation around ethical character and a clear sense of integrity. This was best illustrated by the ethical dilemma faced by the founder, Arthur Anderson, in the early part of his career. The executive of a major railway company asked him to change the figures in a financial report. Despite the risk of losing significant business, Anderson reputedly gave the clear response, ‘There’s not enough money in the city of Chicago to induce me to change that report’ (ibid.). As feared, the railway company business was lost. Within a year, however, the client firm had gone bankrupt, and Andersen’s stance had established the reputation of a firm that could be trusted. It embodied the core purpose and values of the Andersen business, summed up in the adage ‘think straight, talk straight’, something Andersen learned in his childhood. He developed and maintained the firm’s focus on the core value of integrity, involving independent judgement and action, prudence and a clear understanding of the meaning and purpose of the profession of accountancy. This was maintained in the firm’s practice after Andersen’s death in 1947. Key to it was a lengthy induction for new staff, which began with Andersen’s story and focused on: loyalty to the founder, professional identity fixed in the narrative of the firm, and core values of the firm which informed how the firm would be sustained.

In the 1990s, however, the firm began to diversify, increasingly focusing on consultancy (Trevino and K. Nelson 2008). This led to several changes. First, the narrative and core values became less prominent in induction sessions, and in many cases they were lost altogether. This was partly because the growth in consultancy put pressure on time, and partly because it was assumed that a rigorous selection process precluded the need for induction into an ethical culture.

Second, with the diminution of the ethical narrative the firm’s focus moved away from core values such as honesty and transparency to what MacIntyre (1981) has characterized as institutional values, to do with developing and sustaining the corporation. Third, the attitude towards, and perception of, clients began to change radically. Andersen’s narrative had suggested that the profession owed the client an honest judgement on the finances. At one level this involved the best interest of the client, who could not make effective business decisions based on calculations that were untrue. The client, however, may not take this view of best interest, as the original story showed, in which case the task of the auditor was to challenge the client in the light of values that transcended the interests both of the professional and of the client. Either way, this involved respecting the client and remaining true to the relationship with them, something defined partly by context and partly by the perceived identity of the firm. With the focus on consultancy work, the relationship with the client began to involve deception. The client was viewed no longer in terms of relationship and context but rather as means to the end of achieving profit, not as a stakeholder to whom the firm owed an account of values and practice, still less respect. Hence, practices such as inflating fees and extending contracts became commonplace. This in turn led to an unrealistic inflation in estimates of what the firm could achieve.

None of this suggests that consultancy per se leads to an erosion of values; rather, it suggests that, with a change in function, the reflection on values was lost. This led to practice that did not balance the institutional values (principally how to ensure company survival) with the values of the community of practice, i.e. the profession. Hence, there was a breakdown in meaning at the heart of the organization. The original values were still codified in the firm, but the practice was now opposite to those values, something that the firm was blind to. In particular, the fi...

Table of contents

• Cover
• Front Matter
• 1. Philosophy and Integrity
• 2. Integrity and Agency: Being True to the Self
• 3. Integrity and Accountability: Being True to Others
• 4. Integrity and Positive Responsibility
• 5. Integrity and Virtue
• 6. Anchoring Integrity
• 7. Integrity and the Moral Imagination
• 8. Trust Me, I’m a Businessman: Integrity, Trust, Corruption and Counterfeits
• Back Matter