J Bus Ethics DOI 10.

1007/s10551-012-1535-8

Promoting Ethical Judgment in an Organisational Context

Stephen Cohen

Received: 5 December 2011 / Accepted: 31 October 2012 Springer Science+Business Media Dordrecht 2012

Abstract The essay argues that individual ethical judgment is a necessary ingredient in an organisations ethical performance. Attempts to systematise judgment, removing it from individual responsibility are not successful, and sometimes can even be counterproductive. Focus on systems of accountability can actually detract from the production of ethical behaviour. A number of examples are provided. Although it is much more difcult to produce, individual responsible decision-making and individual judgment should be the features that an organisation focuses on in its interest to promote ethical performance. Accountability systems are important; but they have very limited application toward production of an ethically excellent environment. The essay argues that there has been too much attention paid to accountability systems within organisations, and much too little paid toward the development and cultivation of individual ethical decision making and responsible behaviour. Keywords Ethics Business ethics Accountability Responsibility Judgment Ethical decision-making Ethical empowerment Ethical authorization Ethical excellence Ethical leadership

In this discussion, I will direct some comments at the organisational and structural level and some at the level of individuals within an organisation. I will spell out some things, and I will only gesture at others. I confess that there will be some hyperbole. The centerpiece in all aspects of
S. Cohen (&) School of History and Philosophy, University of New South Wales, Sydney, NSW 2502, Australia e-mail: s.cohen@unsw.edu.au

the discussion is the importance of judgment: cultivating good judgment, encouraging and authorising the exercise of judgment, and calling attention to dangers associated with failure to do this. The focus is not on minimum ethical requirements, considering concerns such as corruption, fraud, and the development of appropriate constraints. Rather, the focus is on ethical excellence, which is a matter of good judgment, responsibility, and high performance. A rst reaction to an ethical failure or breach or shortcoming is often, we need more regulations. It need not be literally with trains running off the rails, as it was for State Rail of New South Wales, where the causes were seen to be largely ethical for the ill effects that occurred. Train drivers lack of judgment and attempts to thwart some procedures resulted in more than one terrible accident. The response from the organisation was to try to install new mechanical devices and tougher rules and regulations on drivers behaviour. In short, the organisations approach was to try to make the dead man brake foolproof. Its approach was to do this, rather than to institute whatever training and selection processes might be desirable to ensure that fools do not drive the trains in the rst place. This, of course, is an overstatement; and it is a glib characterisation of a very serious and dangerous situation, with its attendant history.1 The point is that rules, regulations, and mechanical xes cannot do the job of replacing judgment any more successfully in matters of ethics than in matters of technical expertise and compliance. They cannot remedy all behavioural difculties. Focusing on such things ts with a view that if we can just get the procedures, rules, equipment, and hardwiring right, and people complying with these requirements, then we will not have difculties any longer.
1

The Waterfall train crash, January 31, 2003.

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The attraction of such a view is clear. It implies that a straightforward, often reasonably quick, certain, and measurable remedy can be produced to handle a recognisable difculty. It also ts nicely into any accountability or compliance regime. The difculty is that in many types of situations which are ripe for ethical failure or in which there are ethical shortcomings to be addressed, mechanical xes often simply do not work. And, worse than that, they sometimes make matters worse. I am certainly not the rst to point out that general rules cannot handle all cases. This is what Aristotle had in mind with the notion of equity.2 It amounts to the necessity of judgment making a correction to a rulenot because there is something wrong with the rule, but because of the generality of a rule, which will necessarily make it inappropriate to some cases which it would seem to govern. Trying to accommodate, or replace, equitable judgment with additional rules simply will not work. Consider this brief, somewhat potted, story concerning the role of auditors in the catastrophes of Enron and HIH: The auditors in these failures were either complicit or astoundingly negligent or inexcusably morally blind in their behaviour. One result of the collapses was a spotlight being shined on auditors. Regulatory bodies and lawmakers on three continents basically told the auditing profession, clean up your act, or else. That is, do something so that the kind of ethical breaches which occurred here do not happen again. So, they were saying, either you people do something to improve your ethical performance, so that shareholders and the public are not misinformed like this in the future, or else outside regulators are going to come in and take this self-regulation, with its attendant responsibility, away from you. In response to the situation, accounting bodies (like, for instance, the Institute of Chartered Accountants in Australia, and also CPA Australia (Certied Practising Accountants), as well as their counterparts in the U.S. and in the U.K.) addressed the specic questions of how to improve auditor independence and accuracy, and provide transparent and understandable information to shareholders and the public at large. There were important suggestions about things like peer review, rotation of auditors, improvement of judgment, and clear purpose of auditing. In short, the professional bodies began to seriously consider this ethical dimension and ramications of the problem. They understood that the problem was, at root, an ethical one, and that it had to do with appropriate judgment on the part of auditors.3 Before the dust had settled, however, new regulations were introduced
Aristotle (1968), 1137a321138a4 (Book v, Chapter 10). 3 See, for instance, Clarke and Dean (2002), p. 71, and (2001), pp. 7198.
2

both in Australia and in the U.S. The Financial Services Reform Act in Australia, and the SarbanesOxley Act in the U.S. are aimed at this.4 In the climate that preceded the introduction of these new pieces of legislation, the auditing profession knew what the problem was and what they were supposed to be looking at to improve the situation. They were to be focussing on rectifying ethical breaches, ethical shortcomings, and bad ethical judgment, which had contributed to seriously misleading the public. This was the requirement of the threat, clean up your act, or else. However, with the introduction of new legislation, the focus was removed from matters of judgment, and placed squarely on the prescriptive requirements of the legislation itself. So, the question for accountants, how can we remedy the ethical shortcomings?, was replaced by what does it take to satisfy the specic prescriptions of the new legislation?, or worse, how can we get around the new requirements? In this respect, the initial concern has, to a great degree, become lost in the legislationand not remedied by it.5 The legislation is, of course, trying to remedy the problem. However, given that the problem has much to do with the exercise of good judgment, by not focussing on that important aspect of the difculty, the solution, at best, works on only part of the problem, neglecting the rest; but it represents that it is a solution to the entire difculty. More than this, it squelches further development toward remedying what was accurately perceived to be the serious difculty in the rst place: ethical breaches, and the bad exercise of ethical judgment. It has replaced this with putting the focus on satisfying specic prescriptions. In this respect, more regulation can function as a distractor, rather than calling attention to the appropriate places to focus attention. To a large extent, this is what has happened here. It is, of course, easier to create specic prescriptions than it is to work on improvement of judgment. I will have more to say about this later. Systematic, organisational attention can, in fact, be directed at improving moral judgment. It can be focussed on each of (roughly) four requisite areas involved in reaching justiable ethical decisions. 1. Avoidance of moral negligence. Moral negligence amounts to a failure to consider something that one should consider. Maybe this is because of lack of awareness. Avoidance of moral recklessness. This amounts to a failure to give adequate consideration to something; dealing with it in too hasty a fashion, not paying

2.

In the UK, there is still no legislative move on the CadburyHiggs Report, which recommends legislation along the lines of Sarbanes Oxley. 5 Baume (2002) echoed this view, p. 55.

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enough attention, or not particularly caring to get it right, not giving it the care that it deserves. As a step toward addressing these dangers, a number of organisations have used or developed their own ethical decision-making models.6 An ethical decision-making model is a set of systematically organised trigger questions, Have you thought about this? Have you thought about that? Have you considered these values? These instruments are for the purpose of assisting the decisionmaker in navigating through something that they have perceived to be an ethical issue. Most ethical decision-making models take account of the different perspectives that anyone in an organisation must be aware of in dealing with ethical issues. In particular, they typically recognise that the ethical requirements of the particular organisationand the ethical requirements of being in an organisation per semight not be identical with peoples own individual ethical outlooks. There are, in fact, nearly certain to be conicts in this context. In any such case, one should certainly be aware of the conicts that are present; and must make up their mind accordingly. Sometimes it will be appreciated that the requirements from within the organisation should take precedence over ones individual view; and sometimes it will be the other way around. In any case, among the points that an ethical decision-making model addresses should be the possibility of this tension between public morality (sometimes called role morality) and private morality (sometimes called individual morality). The ethical decision-making model should make it clear that whatever decision is ultimately reached, it will be the reasoner as an individual who reaches that decision. Perhaps the best decision will be to defer to the ethical perspective of the organisation; perhaps it will be to buck the organisations perspective in favour of that of the individual. Whatever ethical conclusion one reaches, it is important to appreciate that it is the reasoner as an individual who must make it, and that it is the reasoner as an individual who must bear the responsibility for it. This is an important point in recognising the complexities involved in conicts between public and private morality.7 It is also an important facet of ethical pluralism. 3. Avoidance of moral blindness. This amounts to a failure to see that there is an issue at all. As a remedy for this

4.

failure, ethical decision-making models do not go very far: A person will only ever think of using an ethical decision-making model if they perceive there to be an ethical issue to reason about. If one is blind to the ethical dimension of a problem, then one would not consult an ethical decision-making model at all, and so would get no benet from it. A person might stare at an ethical consideration all day long, and simply not get it. They are not negligent or reckless, in that they did, in fact, focus on the relevant consideration (it did not escape their attention), but when they did think about it, they were absolutely blind in their comprehension.8 They might have looked directly at the problem, and could even have asked, have you considered this?, this?, and this? all day. But they just did not see itthey did not appreciate it as an ethical problem at all. The person was not negligent; they are morally blind. Maybe moral illiteracy would be a better gure than moral blindness: illiteracy is something that can be worked on to correct9. But the correction does not come from merely staring at words and sentences and book jackets. It needs systematic attention. Whether the gure is blindness or illiteracy, the point is the same: someone who looks directly at a moral situation and does not see it as morally signicant at all.10 Cultivation and exhibition of moral competence. This is difcult. Partly, this is the cure for moral blindness. Partly, it is not a cure for anything. It is the requirement for engaging in moral recognition, reasoning, and decision-making well. It involves developing adequate preparation, sensitivity, awareness, knowledge and conceptual apparatus to deal with ethical issues. It is precisely in this area where exercise of

Probably the two most widely used (and adapted) ethical decisionmaking models (and there are very many indeed) are the American Accounting Association Model [see, for instance, May (ed.) (1990) and the Laura Nash Model (Nash (1981)]. 7 An excellent collection of essays in this general area is Stuart Hampshire (1978). Particularly insightful for an understanding of the position of the individual in the conict between public and private morality are Bernard Williams (1978) and Thomas Nagel (1978).

Here is an example of something quite like moral blindness. In a recent Clemenger BBDO television advertisement for Hahn Premium Light beer, titled Sex Bomb, a woman sets the relaxed, romantic mood, and begins to luxuriate in a serene bubble bath. A short while after she has begun, her male partner enters, sees her, thinks this all looks pretty inviting and does a bomb (a big splash) into the bath, thus destroying the mood. She is clearly annoyed by what has happened. As he then pops the top on his Hahn Premium Light, he notices her expression, and, with a nonplussed look on his face, says, whaaaat? He simply has no idea as to how what he has just done could have been other than enjoyed. He just did not see it. We could even imagine that he considered the mood, his partners enjoyment, and decided that this would be a good thing to do. He was simply blind to the situation. It is not difcult to imagine that someone behaves this way in the face of and with some sort of recognition of a serious moral dimension to a situation. So, did you think about this? this?, this? The answer is yes, yes, and yes; but they did not really see those things in any serious way. (I believe this was the situation in the John Laws cash-for-comment difculties.) 9 I am grateful to Damian Grace for this suggestion. 10 In a recent research project investigating the production and maintenance of, and obstacles to, ethical excellence in the public sector in New South Wales, a commonly cited obstacle to achievement of excellence was moral blindness (or words to this effect).

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judgment is concerned. This is dealing in areas where situations are not black and white, and where judgments are better or worse not because they are correct or incorrect, but because their justications paint more attractive pictures or tell more attractive stories. They are better or worse because they reveal a more understanding and sympathetic appreciation for the situations that they are judging; not because they are truer or more correct. These are the characteristics that are integral to moral competence. Encouraging, cultivating, and maintaining them throughout an organisation are at the core of the creation and maintenance of an organisational culture that promotes and supports ethical excellence.

Accountability requirements not only keep account of who does what. They also dene what activities, decisions, etc., are to be kept track of. They have to do this. We are not accountable for everything. Accountability systems not only keep account; they also declare what is to be accounted for, and what counts. They dene those activities and decisions for which people are to be held accountable; and they themselves set standards: You are expected to do this, this, this, and this; and you are to sign off after having done them. In this respect, accountability systems declare baselines. They dene the problem (if there is one), and, more importantly, they set the parameters for identifying the remedy or improvement, and for measuring these things: In the name of X (say, satisfying your job requirements, or excellence in performing your function in the organisation), it is these things which count. We are going to count them, and hold you accountable accordingly. Later I will have more to say about declared baselines, and the need for scepticism about the status of what they actually declare. To hold peopleor institutionsaccountable for things, the things must be declared, the methods of counting must be specied, and a timetable must be introduced. Inputs, outcomes, milestones, key performance indicators, metrics, productivity, quality check, schedule, timetable: These are some of the notions that apply. Timeframes become important. For example, the people in the materials procurement section are accountable for ordering in, paying, and sending out to the appropriate departments the materials that those departments need. These people can keep records, and can show the incomings and outgoings over a specied period, say 3 months. We can see not merely that there was no fraud, but also that there is efciency in the operation, in terms of what and how much they are ordering and what and how much is being distributed to the organisations departments. We might also have in place an accounting requirement for how the people are spending their time. The idea is the same: we need to see evidence of inputs and outcomes, and perhaps procedures followed, over a specied period of time. Accountability systems go a fair way toward discovering and helping to weed out freeloaders, or free riders. If someone is not doing the job or is doing it inefciently, accountability requirements can help to discover this, and they can help in bringing that person back into line. The periods of time involved are usually relatively short. Sometimes, they have to be short-term, because our interest is in the short-term. Other times, they are short-term, because we need to have some evidence in the short-term, even if our interest is in the longer term.

Accountability and Responsibility I want to spend some time examining these notions, particularly with respect to their roles in an environment which nurtures ethical judgment, promotion of ethical culture, and development and maintenance of ethical excellence. I will try to indicate that focussing on accountability systems is more aimed at rules and procedures, rather than at judgment. And in this respect, accountability systems can, in fact, be counterproductive if the goal is ethical excellence. Accountability is a very important notion these days. Serious concerns about accountability have developed in areas where, not all that long ago, accountability did not receive even a mention. People in various roles employees, employers, directors, managers, CEOs, professionals, academics, etc.are held accountable. It used to be that, for better or worse, people in director or managerial (or academic) positions were simply trusted to get the job done. This was managerialism (let the managers manage) at its height. There were serious problems; and greater accountability and robust accountability systems were introduced to remedy this. Accountability systemsand, in general, a focus on accountabilitysignal a diminution of an environment of trust. They do this primarily in the name of transparency and openness.11 Accountability systems focus on various elements of job requirements. They identify these and keep track of performance in these areas. Partly, such systems are historical, in that they keep track of who did what when. People have to sign off. This can make for clearer lines about where the buck stops, and who will be liable for what.
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For an excellent account of the (ironic) pitfalls associated with thisthe cure actually exacerbates the illness see ONora ONeill (2002), particularly chapters 3 and 4, pp. 4180.

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Under a strong accountability regime within an organisation, there will undoubtedly be many fewer freeloaders than where there is no such regime. Accountability regimes make it difcult, if not impossible, to hide; and they also make it more difcult to pass the buck. The accountability system will discover that the particular individuals or sections within an organisation are not doing their share or that there are errors or inadequacies. This itself can be an important consideration for any practice.12 What accountability systems do not do very well, however, is to encourage and promote excellencebeyond, say, excellence of procedure13 Accountability systems do not sit very well with the creation and nurturing of good judgment. They keep track of and report what people are doingthose declared items which have been specied and are now countable, the identied items which are produced, or the identied procedures which are followed. They establish and then keep track of the norm. By and large, they fail to look at, let alone pay recognition to, anything else. And it is precisely in the anything else basket that excellence resides. If we have become preoccupied with prescribing, recording, and counting the ordinary, and dening procedures for doing these things, then there is little opportunity for even tolerating, let alone promoting, the extraordinary. This really is my main point. Here, an argument might extend further: In dening the norm, declaring what is to be regarded and what is not, the declaration certainly prescribes those activities and, in effect, proscribes others (or, at the least, offers no encouragement or incentive to engage in them). Your brief is to make widgets. You are to produce however many of them you can; and this will be recognised. This recognition will play a part in whatever promotions, benets, and remuneration you are to receive in the organisation. Under this regime, when you are giving an account of your achievements, as well as your job description, within the organisation, this must all be referable to your widget-production. The prescription to make widgets offers incentive to make them. It also offers disincentive to make or to do anything else. If the business is simply the manufacture of widgets, and the accountability regime is aimed only at those whose jobs are hands-on on the assembly line, then this is probably not a bad effect. However, let us suppose that the business is not so clearly dened, or that you are focussing on those whose job descriptions are not as easily speciable, or have a more obviously qualitative aspect to them. Lets say,

for instance, your business is a university.14 There are a number of activities that employees of this institution engage in; and there are, of course, a number of activities for which they are accountable. Lets focus on only one, the research activity of academic staff. Australian universities receive part of their funding based on the research that they do: the more research, the more money. Research is dened in terms of guidelines set down by the Department of Education, Science and Training (DEST)15and more recently the Department of Education, Employment and Workplace Relations (DEEWR)and even more recently, the Department of Innovation, Science, Research and Tertiary Education (DIISRTE). A signicant portion of funding to universities is based on research, as dened by the government body. Of this portion, 80 % is based on research income (i.e., grants received), 10 % on publications (as dened in various categories by DEEWR), and 10 % on research completion (research students completing their degrees). Not only can there be a list of accepted publishers (i.e., the ones which can gure in the counting for published research) but also a list of accepted periodicals (i.e., which professional journals countand so, which do not countfor the purpose of ascertaining whatand how muchhas been published). The Department also denes quite specically what kind of books count as research publications at all. (As of May, 2011, there is be a new government agency to do this: the Tertiary Education Quality and Standards AgencyTEQSA.) The stimulus for this is clearand it is laudable. Academics should not be immune from a requirement for being accountable for what they do. And, if theyuniversities, faculties, schools, departments, and individualsare engaged in research, then they should be able to demonstrate that they are. And if this can be quantied, so much the easier. With Government rules and categories of research, we have a situation like this: Is the book used as a text? If yes, then it isnt research; it doesnt count. Is the book a new edition? If yes, then it isnt research; it doesnt count. Is the book published by a publisher not on the DEST list? If yes, then it isnt research; it doesnt count? Is the essay published in an A-list journal? If no, then it doesnt count for much, and maybe for nothing at all.
I offer this only as an exampleas a striking exampleof this point about the limits of the adequacy of accountability systems. My suggestion is that the point is not only generalisable to other organisations, but obviously generalisable to them. In A Question of Trust, ONora ONeill certainly extends it to an entire public sector, and, in fact, to the management of anything. 15 See, Higher Education Research Data Collection: Specications for the Collection of 2004 Data (2005).
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See, for instance, Condren (1988). Deming (1986) was one of the rst to notice this.

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These and other similar questions are, of course, important, inasmuch as recognition, reward, encouragement, and funding at all levels depend on quantity of research; and denitions of research which easily produce these answers are being employed to determine what is research, how much research is being done, and who are active researchers. By employing such criteria, it becomes a relatively easy matter to determine what is and what is not research for the purpose of Department recognition, and thus, government fundingequally across all disciplines. And similarly, it is an easy matter to determine who are better and who are worse researchers. Arguments, explanations, justications, and descriptions become largely unnecessary (and even inappropriate), and the system can function smoothly, efciently, and quickly, according to the baselines which are declared by the government department, and followed by universities, faculties, schools, and departments. (At any level, of courseUniversity down to departmenta decision could be made to buck the system. There would, of course, be a price to payat least in the short term. But, ethics costsdoing the right thing does not always bring with it prudential rewardsand that is the title of another essay, for another day.)16 It is a well-known phraseand the title of numerous articles in management literaturethat what gets measured gets managed.17 If something cannot beor for whatever reason is notmeasured, then that thing cannot be, or simply is not, managed. The easier and the clearer the measure, the easier and the clearer the management and the management strategy. By and large, other things are simply left by the wayside. They do not count. The notions of active researcher and better and worse research can be easily and mechanically identied. It is all measurable and quantiable. (Lost in this are those in managementlike, say, Demingwho have staunchly opposed this maxim as offering a worthwhile prescription. Or, Albert Einstein, who reputedly had a sign over his desk, which read, Not everything that counts can be counted; and not everything that can be counted counts.18) Of course, there is a rationale here. Some periodicals really are not of high quality. And some are not academic at all. It is also true that some self-proclaimed research activities are not really research activities. But any discussion or argument that we might have over this is reduced to numbers
This brings to mind a claim by Thoreau (1849): if one HONEST man, in this State of Massachusetts, ceasing to hold slaves, were actually to withdraw from this copartnership, and be locked up in the county jail therefor, it would be the abolition of slavery in America. Doing the right thing, in this case, would cost; but it would spell the end of an utterly objectionable practice. And, most importantly, it would be doing the right thing. 17 Attributed to Peter Drucker, although no one seems to know where it occurs in Druckers work. 18 Cited by R.M. Williamson (2006).
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which sit beside the various categories on the Government list. There is no room for discussion of particular research efforts, effectiveness, and quality beyond the list. Expert opinion either is not allowed, or has already been factored into creation of the list itself. The discussion is closed, and the values are set. The parameters have been declared, and there is no room for comment on any particular piece of work. This is certainly an equaliser. It has created a uniform scale on which performance can be judged. And it provides a pretty nely grained comparative ability, as well: she is a 1.5 better researcher than he isjust look at the points. In the name of accountability and uniformity, this has replaced qualitative judgment. It is very difcult to be a freeloader. This is a serious move. It is also very dangerous, as well as invidious. (Never mind that Paul Samuelsons Economics has some important things to say. It is, after all, only a textbooknot research at all. Besides that, Samuelson was really only explaining someone elses principles.) If the basis on which an evaluation is made is a set of quantiable criteria which apply to a large range of activities, then this is very attractive. The evaluation itself can become mechanical, and there is no needand no roomfor the exercise of judgment in evaluating anything. A serious difculty with such evaluations is that in attempting to evaluate something, strong emphasis is placed on particular speciable facets of that activity to the exclusion of all others. It alsolike other accountability systemsfocuses attention solely on those facets. I believe another good example of this, also from the world of education, concerns the evaluation of teaching, with focus on process and procedural orientation (e.g., comprehensive course outlines as a gauge) and identication of teaching and learning indicators. I offer this as a separate discussion in the appendix. There are important questions, largely left unanswered: For example Are the criteria we are measuring really relevant to measuring what we are interested in measuring? (This is a central aspect of the general issue of concept validity, or construct validity, which has been an important consideration in statistics and the social sciences.) Should we allow them to be the sole criteriawhich they currently are? In any particular area, is it necessaryand is it possibleto have generic criteria? In some particular areas, is it necessaryand is it possibleto have quantiable criteria? Can we legitimately do away with a judgmental element in the evaluation of these areas?

In identifying which activities or results are to count, an accountability system prescribes what activities to

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undertake. As mentioned earlier, accountability systems take stock over a short term. This, as well, serves as a prescription: If some activity cannot be done in ways that have countable outcomes over a short period of time, then, inasmuch as it falls outside the accountability regime, the activity itself does not count. It is, in this respect, a waste of time, and a waste of resources.19 This is the way it is with accountability systems. But, with possibly some few exceptions, it simply is not possible to police quality into a product or activity, unless what we are concerned with is itself a purely mechanical, assembly line process.20 As I have suggested, accountability systems can determine and monitor the norm. They can become invidious when they are used to dene and evaluate excellence. I want to go just a little further with this. Satisfaction of accountability requirements is not all there is to achievementand certainly not all there is to high performance, or excellence. As I have mentioned, such requirements are more geared toward, in fact, dening the ordinary. And, they can act as an aid toward preventing corrupt conduct. This element is, of course, important. But, notice, it is not a high-end concern. It is not a concern about excellence. It is conceivable that some organisationor maybe even an entire societyis particularly concerned to weed out freeloaders. This organisation really wants people to pull their own weight. We could imagine that in its statement of values or its mission statement, this point is highlighted perhaps in the name of fairness or equity: NO FREELOADERS HERE! If, in fact, we look at organisations values statements, we nevernot evernd reference to weeding out freeloaders as a value. But we often nd signicant statements about promotion of excellence. It is a mis-t to try, as organisations typically do, to put accountability systems in the same basket as whatever there is toward promoting excellence. This, again, is the problem of concept validity. Accountability systems and promotion of excellence are different things.21 And the worry is that in the respects I have identied, accountability systems and
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promotion of excellence can come into conict with each other. Accountability systems display excellence in reporting within their terms. They do not show excellence in accomplishment. Accountability systems not only are different from excellence-producing systems; they also can work against promotion of excellence. I have referred to declaring baselines, or setting parameters, and closing off the discussion by the declaration of values. That is, the discussion about what is of value and what is not, and what procedure can be used to evaluate performance, can be closed once baselines are set. Baselines are declared starting places, and purport to bound the discussion. That is what baselines do. They constrain the discussion, they close it off with respect to exploration or argument or discussion in certain areas. Sometimes we should be leery of declared baselines. Often we are inclined to treat them as more rigid and as having more credibility than perhaps we should.22 They are presented as givens. For example, Because $97,000 of the $100,000 must be used for equipment, only $3000 is available for paying the people who will be stafng the event. This statement declares that the money will be (better, must be) partitioned in this way, and it does not invite and actually discourages or prohibitsany suggestion that, say, less than $97,000 might be spent on equipment, so that more than $3,000 could be spent on paying the staff. It has declared that $97,000 on equipment is a baselinenot up for discussion or debate. It declares that the only room for discussion is how we can possibly staff the event for no more than $3,000; nothing else can be discussed. Sometimes that might really be the casebut not always. The initial statement declares a baseline. It denes the problem or difculty in a particular manner; and it limits the scope for resolution. Sometimes there are satisfactory answers to questions like, why should we see the problem that way? and why should we treat that as a baseline? But this is not always the case. Sometimes there is no satisfactory answer to that question; and still the question
Analogously, it is sometimes argued that this has been exactly the case with IQ testing. This was initially developed (in 1905, and revised in 1908, 1911, and 1916) in order to identify those who are intellectually challenged, indicated by falling below a certain number on the IQ scale. However, it is, after all, a scale with high numbers as well as low numbers. So, the test began to be used as a way of discriminating at the higher levels, as well. It was not designed to do this; and, so the argument goes, it does not do this at all well. It is not, in fact, a tool for this job. This is exactly the issue of concept validity. 22 In Truisms in Business Ethics (1999), an essay about the acceptance of some claims not only as true, but as obviously true, when, in fact, those claims are not true at all, I spend some time talking about dangers associated with announced baselines.
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Consider this, however: Recently it has been pointed out by some people in the scientic community that the focus on accountability is a serious obstacle to curiosity research, or blue sky research. This type of research might or might not produce results, and it might take a very long time. Schedule, milestones, timetable can have little applicability. Wonderful breakthroughs, elements of genius, and much pure research does not seem to t into the mould of accountability in these respects. Some such work goes on for years and years before producing anything; and some of it gets nowhere at all ever. If we believe that any such research should be promoted or even tolerated then we have to admit that accountability systems as we have designed them to date should not be applied to it. Perhaps less dramatic than blue sky research is any book-length project in which the author does not also produce interim essays along the way to its completion. 20 Deming urged this well over twenty years ago.

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does not get asked, because we accept the baseline as declared, simply because it has been declared to be a baseline. Sometimes we accept declared baselines too quickly; and sometimes we even unwittingly accept them. Thats the way it is with baselines. And sometimes, those presenting the baseline as a baseline are well aware of this rhetorical feature of declaring a baseline, and can exploit it. Sometimes their presentation of it as such is inadvertent. Inasmuch as the Government guidelines do not award any points at all for the particular activity that you are undertaking in the name of research, we in this Faculty simply cannot count it. It is clear that without changing those guidelines, the Faculty will not receive funding based on that activity. But maybe this is a price a Faculty should be prepared to pay, if it thinks that the activity is worthwhile, or if it thinks judgment in evaluating the activity is called for, rather than a simple and straightforward tallying up of what does and what does not get counted according to a Government formula. It is easy to come up with such examples of declared (but, in fact, problematic) baselines. There are lots of them. I have two points about this: 1. We too easily accept, as though carved in granite, a declared baseline, when, in fact, sometimes the most appropriate reaction is to question and debate exactly that which has been declared to be outside the bounds of the discussion. Sometimes in the face of such baselines, the response with the most integrity can be to act in the way you more rmly believe to be right, using judgmental criteria which you believe to be appropriate, rather than accepting the baseline and the benets that it holds out for compliance. This is, of course, fraught with peril. It can involve personal cost or cost to the part of the organisation that decides to behave in this way. Analogously, this is, of course, the situation with much ethical decision-making, which can be at odds with decisions that are purely prudential. In short, ethics costs. This is exactly the way it is with serious and tough ethical decisions.

two facets. On the one hand giving someone the responsibility to do something means that they are to do it, and to decide how to do it. On the other hand, someones taking responsibility for doing something carries with it the requirement that they do it responsiblynot merely that they do it. So, an instruction to take responsibility for something is an instruction to get something done, and to do it responsibly. Unlike accountability systems, a system of responsibility is a system of delegationa system of authorisation, or empowerment. It is a delegation of authority; not merely a delegation of a task. It is a system which requires that people exercise judgment. Ethical empowerment, or authorisation, within an organisation is a topdown notion, involving a delegation of authority for ethical decision-making (Fig. 1). It authorises, or empowers, members of the organisation to exercise judgment in decision-making. Increasingly, organisations have recognised that theyand their managers and supervisors through the rankscannot afford to be risk averse. They cannot afford for their people in managerial or supervisory roles to avoid making decisions or to be rule-bound in ethically charged situations. Organisations must recognise that the alternatives to ethical authorisation are simply not very good: To try to eliminate the possibility of the occurrence of situations where judgment must be exercised is impossible. I have indicated that such attempts simply do not work, and can, in fact, make situations worse. To pass all ethically charged decisions up the line, so as not to make the decision oneself in this ethically problematic environment, is a recipe for inefciency. To simply avoid making decisions in ethically charged situations is a recipe for stagnation. To go ahead and do something, whatever you want in situations where there are no specic prescriptions, is cavalier, and almost certainly a recipe for disaster.

2.

Business, Organisation Top-Level

(General Manager, CEO)
ity sibil on resp

Responsibility and Ethical Empowerment I have suggested that, among other things, accountability systems provide a historical track, in that they identify who did what, and when they did it. Keeping tabs like this can reveal liability. Responsibility systems, on the other hand, are proactive. They provide an instruction that someone or some part of an organisation is to take responsibility for doing something. In this phrase, responsibility itself has

trust

Next Level
(Directors, Supervisors, Managers, )
ibil ons r esp ity

trust

Next Levels
ons resp y ibilit

trust

Fig. 1 Ethical empowerment

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It is dangerous to an organisation not to invest in systems that equip managers to systematically exercise good judgment in such situations (e.g., training in ethical decision-making, clear job descriptions, ethical leadership training, and robust codes of ethics). To trust to common sense (or something like this), or to replace it altogether with apparently comprehensive rules, regulations, and accountability regimes is a common error. Charging managers with responsibility to make ethically defensible decisions is a matter of authorisation, or empowerment. Ethical decision-making can be approached and dealt with specically, seriously, and systematically, while not being rule-bound. Appropriate decision-making discretion can be delegated downward through an organisation. Those receiving the responsibility are to recognise that they must make decisions and that they must exercise demonstrably good judgment in making them. Trust goes downward. From the top downward, those authorising people below them must trust that those receiving the delegation are up to the task. Of course, this should not be simply a matter of luckthe person who receives the delegation needs the ability, skills, and resources to exercise it. And they must believe that this is what is expected of them. Not everything is appropriate for delegation; and delegation is not appropriate to everyone or just to anyone. (This itselfwhat and why some roles are most suitable for assignment of responsibilityis worth more discussion; but I will not enter into it here.) Whatever provisions are made, it is a matter of trusting that the person who is empowered can do the task. Nowand this is at least as importantit is necessary that those who receive the delegation actually trust that the people who purportedly gave it to them actually meant what they saidthat the delegation and the responsibility are real. We all know people who, when they say exercise your discretion actually mean something like, you had better do this exactly as I would if I were in your position; otherwise, Ill come down on you like a ton of bricks. This is not trust or delegation. It is self-deception or fraud or some such thing. It is certainly not a recipe for authorising ethical decision-making in ethically charged situations. It is, rather, a recipe for second-guessing and looking over ones shoulderand doing the minimum. It is not empowerment at all. It is, rather, instilling fear and distrust. In an environment of ethical authorisation, responsibility is delegated downward, and trust must go in both directions. By and large, this is an important, probably indispensable, notion for an organisation that is concerned to promote ethical performance. Authorising someone to engage in ethical decisionmaking does not mean being prepared to license, or support, whatever they decideand it does not mean attempting to pass the buck. It means recognising that

specic prescriptions do not cover all cases, and allowingor even insistingthat in those areas, people can make decisions which will be supported, or at least not have untoward repercussions on them, if they can demonstrate that their decisions are reasonable. A fair model of what I have in mind is this, which is quite different from evaluation in terms of accountability measures: It is commonly the case that when an appeal court hears a case, its job is not to simply decide whether the court of rst instance made the correct or incorrect decision on the evidence. Rather, what is required in order for the appeal court to overturn the original verdict is a nding that the decision was unreasonable on the evidence. An appeal court can well think (and even say), that verdict is not the one that we would have reached if we had been hearing the case in the rst place; but nevertheless, we do not nd the decision unreasonable, and hence we do not (cannot) overturn the verdict. The decision must be accepted.23 Perhaps a law or some other rule can be created so that this is not tolerated in the future; but this decision must be accepted. It is evaluated as being at an acceptable level. Another, similar, model worth considering is the Business Judgment Rule.24 The Business Judgment Rule provides a shield for company directors from charges of personal liability if they can show that 1. 2. 3. 4. they have made their judgment in good faith for a proper purpose, they did not have a material personal interest in the subject matter of the judgment, they were reasonably informed about the subject matter, they rationally believed that the judgment was in the best interests of the corporation.

Thisor something like itwould be a reasonable model, or test, for whether or not acceptable judgment has been exercised in areas involving ethically charged decision-making. Maybe in this area more should be required; a higher bar should be set for reasonable ethical judgment. But, the idea is clear; namely, that there can be a nonformulaic, non-mechanical, non-algorithmic gauge of limits of organisationally tolerable ethical decision-making in an environment of ethical empowerment. Those who are authorised to make decisions should be able to expect that if they can offer justication which is
23 Robert Nozick (1974) makes basically the same point in arguing about the limits of one society having to accept the legal decisions of another being enforced against its own citizens on foreign soil, when it disagrees with them. If those decisions are appraised as being within the scope of what is fair and reliable, even if not the same or as good as the society sees its own, then it should be obliged to accept the decisions. 24 Section 180(2) of the Corporations Act 2001.

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appreciated as being reasonable, then they will not suffer. To that extent, the decision will be recognised as being licensed by the organisation, and the person making the decision will be supported, or at least not made to suffer. It is, of course, possible to retract authorisation in particular areas; and there can be good reasons for doing this. Laws, rules, regulations, and codes of conduct are all mechanisms for doing this. But, if it is admitted that an environment of ethical authorisation is important and valuable, then reasons for diminishing authorisation should be made clear, and should be created with appropriate hesitancy. There is much more that can be said about creation and limitation of systems of ethical responsibility. The central point for here, however, is to distinguish accountability systems from responsibility systems, and to call attention to serious limitations and misconceptions of the former and the necessity of development of the latter, with their insistence on the cultivation and exercise of good individual judgment. Establishing such systems is not easy, but it is critically important for the promotion and maintenance of ethical excellence.

Appendix: Accountability in the Evaluation of Teaching In 1975, Donald Kirkpatrick produced a model of measuring the effectiveness of workplace training, the Kirkpatrick Model25. This consists of four levels: Level 1 Reaction: What was the attendees reaction to the training? Did the attendees like it? How did the trainees evaluate the effectiveness of the training? Level 2 Learning: Did the trainees learn anything? Level 3 Behaviour: Did the training change the behaviour of the attendees? Level 4 Results: Does the changed behaviour have implications for business success? In 1996, Jack Phillips suggested a fth level26, Level 5 Return on investment (ROI): In terms of business, was the training worth the cost? What is the ROI? For this, Phillips suggested a formula designed to show the percent return on the costs involved for delivering a training program. An amazing fact about all this is that in the world of education, as well as in the world of training programs provided for businesses and other organisations, there is very little done beyond Level 1 to evaluate any training. And this, despite the fact that the Kirkpatrick model is widely recognised and applauded. Student/attendee
25 26

evaluations are handed out; and that is pretty well that. With the relatively recent development of workplace training and assessment, with its identication of elements of competence, and performance criteria and the like in the area of vocational training, at least that sector of the provision of training has made a serious effort at focussing on Level 2. But it is true that for nearly all education programs, the measure of their quality and their successas well as the measure of the quality of the provideris at Level 1 only.27 Why is this? A reasonable suggestion for an answer is, because its easily measurable. Attendee evaluations tick a box, or evaluate this statement on a scale of 15 are not difcult data to collect, the same questions can be asked of almost all types of training groups, and the results can be compared pretty well across the board of education and training. There has been only little work done, however, in terms of investigating any correlation between attendee satisfaction and any other important criteria for evaluating the effectiveness of training or education (again, the issue of concept validity); and in particular, there have been no systematic attempts to evaluate effectiveness at Levels 2, and particularly 3, 4, and 5. This is all the more amazing, given the amount of resources spent on training programs, at all levels. So, what does this have to do with accountability? The state of affairs with the Kirkpatrick model is both an example and an analogy. It is an example in that it is an attempt to call trainers and training programs to account to measure their effectiveness in terms of the articulation of the things that matter. It is an analogy in that the current situation accepts whatever criteria it does accept because those criteria are easily measurable; they are easy to quantify. If the basis on which an evaluation is made is a set of quantiable criteria which apply to a large range of activities, then this is very attractive. The evaluation itself can become mechanical, and there is no needand no roomfor the exercise of judgment in evaluating anything. As mentioned earlier, a serious difculty with such evaluations is that in attempting to evaluate something (in this case, training), strong emphasis is placed on one facet of that thingor better, on one result of the training (viz.
27

Kirkpatrick (1975). Phillips (1996).

Of course a number of programs have elements of testing the attendees; examining them over the content of the course. Do not confuse this, however, with evaluating the success of the training. In holding trainers accountable, student evaluations are often collected. If we actually viewed whether or not trainees learned anything in the training as an indicator of the success of the training (i.e., Level 2), we would at least also ask trainers to provide data on something like the pass-rates in their courses and percentages of grades awarded at all levels. We dont. We do use exams; but we do not use them as any part at all of an accountability system or as any part of the measurement of the effectiveness of the training. At most, they are used to evaluate the students; but not at all to evaluate the effectiveness of the training itself or the individual trainer.

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attendee satisfaction)to the exclusion of all others. An attendee at an ethics workshop once mentioned to me, I like physical things. So, give me a rope-climbing course for team-building or anything else, and of course Ill rate it highly. If we get to do the ropeclimbing and other activities, then Im happy. I dont even really think about anything else that might result from it. What we are interested in measuring, and the tools we use to measure it, simply do not t together. And, as in this case, sometimes the mis-t stands as a serious bar to development and promotion of excellence, which was the rationale for those tools in the rst place.

References
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Condren, C. (1988). Sidney Godolphin and the free rider. Business & Professional Ethics Journal,17(4), 519. Deming, W. E. (1986). Out of crisis. Cambridge, MA: MIT Press. Hampshire, S. (Ed.). (1978). Public and private morality. Cambridge: Cambridge University Press. Higher Education Group. (2005). Higher Education Research Data Collection: Specications for the Collection of 2004 Data. Department of Education, Science and Training (February). http:// www.dest.gov.au/highered/research/herdc.htm#specications. Accessed December 2011. Kirkpatrick, D. (1975). Techniques for evaluating training programs. Alexandria, VA: ASTD. May, W. W. (Ed.). (1990). Ethics in the accounting curriculum: Cases and readings. Sarasota, FL: American Accounting Association. Nagel, T. (1978). Ruthlessness in public life. In S. Hampshire (Ed.), Public and private morality (pp. 7592). Cambridge, NY: Cambridge University Press. Nash, L. (1981). Ethics without the Sermon. Harvard Business Review, 55, 7990. Nozick, R. (1974). Anarchy, State, and Utopia. New York: Basic Books. ONeill, O. (2002). A question of trust. Cambridge, MA: Cambridge University Press. Phillips, J. (1996). Accountability in human resource management. Houston, TX: Gulf Publishing Co. Thoreau, H. D. (1849). On the duty of civil disobedience. http:// thoreau.eserver.org/civil.html. Accessed October 2012. Williams, B. (1978). Politics and moral character. In S. Hampshire (Ed.), Public and private morality (pp. 5574). Cambridge, MA: Cambridge University Press. Williamson, R. M. (2006). What gets measured gets done: Are you measuring what really matters? Strategic Work Systems, Inc. http://www.swspitcrew.com/articles/What%20Gets%20Measured %201106.pdf. Accessed October 2012. Waterfall train crash. http://rtbu-nat.asn.au/190.html. Accessed October 2012.

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