David A. Walker AAI, CIC, LIC, ARM, CRM, CAWC

President-Hartland Insurance Agency Inc.Chairman-IIABA

DavidWalker@hartlandinsurance.com

With the SEC and Federal Government regulating the

big guys …..

It is the marketplace that regulates small business

Small to Medium Size Business rely on a

very delicate network of business connections

Gallup poll – # of people who said a strict moral code is important.

1981 – 47%

1989 – 60%

Josephson Institute – Survey of U.S. Students (1991-1992)

78% said cheating on exams is wrong

90% said being “kind and caring” is important

2008 Josephson Institute Survey revealed

64% cheated on exams

42% lied to save money

30% stole something from a store

1 in 6 drink or use drugs while on the job

1 in 2 say they can get ahead by politics or cheating vs. work

1 in 4 expect to compromise personal beliefs to get ahead

Admit they “goof off” 20% of time

Feel #1 cause of business decline is low executive ethics

ETHIKOS

= morals

ETHOS

= character

Standards of conduct based on moral duties and virtues

Applying principals of right and wrong

Discipline dealing with good and evil with moral duty

Of or relating to principles of right and wrong

Conforming to a standard of right behavior

Values

What you believe or hold important

Ethics

What you do

Honesty and integrity

Respect and caring for others

Recognize stakeholders rights

Promise keeping

Trustworthiness

Fairness

Personal responsibility

Happiness

Wealth

Status

Power

Appearance

Ego

Ethical values must always trump ethically neutral values

A

A

Meet deadlines

Cut cost / increase production

Meet immediate self-interest

Gain short term benefits

Protect someone

Avoid punishment

Win admiration / interest

Avoid embarrassment

Virtue Ethicist

Deontologist

Relativist

Egoist

Utilitarianist

Person of “good” moral character deems appropriate

Born with virtue, but can lose

Can be enhanced by belief, knowledge

Above and beyond

Focus on rights of individuals Freedom of conscience

Freedom of consent

Freedom of privacy

Freedom of speech

Due Process

Intentions of behavior rather than consequences

From experiences of individuals and groups

Use self as basis for ethical decision

Actions based on group consensus

Seeking greatest good for the greatest number

Comparison of costs to benefits for all parties

Select alternative that results in greatest utility

Consequences for self

Maximize own self interest Career growth

Power

Pleasure

Fame

Physical well being

Wealth

A statement of core values and ethical principals designed to guide behavior and/or provide inspiration

Virtually every number in a corporate financial report is created by

judgments and estimates made bycorporate insiders whose cash bonuses

depend upon meeting pre-set earnings targets.

William S. LerachEnron Class Action Lawyer

Uberrima Fides

Corporations and individuals doing “the right thing”

Core ethical principals Honesty

Integrity

Responsibility

Promise keeping

Fairness

Ethics place in business

Lack of leadership

Poor communication

Lack of consumer focus

Burdensome bureaucracies

Unhealthy competition

Truth vs. Loyalty

Individual vs. Community

Short-term vs. Long-term

Justice vs. Mercy

10. Could the decision become habit forming? 9. Is it legal? 8. Is it safe? 7. Is it the right thing to do? 6.Will this stand the test of public scrutiny? 5. If something terrible were to happen, could I

defend my actions? 4. Is it just, balanced, and fair? 3. How will it make me feel about myself? 2. Does this choice lead to the greatest good for the

greatest number? 1. Would I do this in front of my mother?

The Ford Pinto

Low-cost sub-compact

Weight less than 2000 lbs.

Cost less than $2,000.00

To market in 2 years instead of 4

Met all legal and government standards

Car was comparably safe

To modify design on 12.5 million autos

$11 per unit x 12.5 million = $137 million

180 burn deaths ($200,000 x 180)

180 serious burn injuries

($67,000 x 180)

2100 burned vehicles ($700 x 2100)

Total of $49.15 million

The Four Way Test

Is it

true?

Is it

fair for all?

Will it

build good will?

Is it beneficial

to all?

We judge others by their worst

behavior

We judge ourselves by our best

intentions

There is no single “right” answer to

many ethical dilemmas

It’s easier when you don’t need it

Questions????????