Personal Value Ethics: Will They Help or Hinder Us?

Often the top managers have a fiduciary duty to guide the company in a positive direction no matter what; regardless of their own personal values. It is impossible to ignore the relationship between a person’s personal ethical values and their management ethics. There are countless times when a top executive has to make a decision for the company; sometimes this decision can have a negative impact on the decision makers themselves. If the decision that is made is unethical according to an executive’s personal value ethics; will they continue to carry-out their fiduciary duty? Alignment of executives with the same values as the company is very hard but is essential for many companies. In the case of Bank of America their CEO Ken Lewis is being charged with committing fraud. In this quote the extent of the lawsuit is described:

Cuomo also sued the bank’s former chief financial officer Joe Price and the bank itself for not disclosing about $16 billion in losses Merrill had incurred before it was bought by Bank of America in an effort to get the merger approved. Afterwards, Lewis demanded government bailout funds, Cuomo said. (Business Week)

The actions by the former CEO were clearly unethical, he was trying to defraud taxpayers and the company’s image suffered because of his poor decision making. In this example it’s apparent that Lewis’ personal value ethics hindered his management ethics. I believe that our ethical values of self interest and personal virtue will ultimately help our management ethics and help us avoid situation like the one faced by Bank of America.  The conclusion we reached was that an executive’s personal value ethics can be very impactful on their management ethics. The conflict between ethical behavior and honoring a fiduciary duty towards a company is a science that must be approached cautiously because of the immense ramifications of decision making.

Source:

  • Hosmer, L. T. (1995). Brief Summaries of Ten Ethical Principles. Academy of Management Review, 20(2), 396-397.
  • Arnold, D. G. (2005). The justification of human rights. In R. J. Zwettler (Ed.), Perspectives in business ethics (pp. 25-29). New York, NY: Mc-Graw Hill.
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One Comment on “Personal Value Ethics: Will They Help or Hinder Us?”

  1. Dr. G. Young Says:

    You ask a very interesting question: “If the decision that is made is unethical according to an executive’s personal value ethics; will they continue to carry-out their fiduciary duty?”

    Chester Barnard, a famous AT&T manager from the 1930s, expressed the same personal dilemma when he wrote “To do something that is required obviously for the good of the organization but which conflicts with deep personal codes – such as the sense of what is honest – destroys personal probity; but not to do it destroys organization cohesiveness and efficiency” (1938, 1968: 279).

    I read about an idea called “moral travel” which basically says “when the organization has you by your paycheck, your heart & mind will follow.” According to “moral travel”, good people who stay in organizations violating their personal values are whores selling their virtue for money. What do you think about this?

    Thanx for starting an interesting discussion.

    Dr. G.

    thanx for starting an interesting discussion


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