1. Every Day Ethics Craig Mitchell, Esq. Mitchell & Associates, APLC New Orleans, Louisiana www.mitchellaplc.com
2. Why Ethics Every Day? “The poor reputation of the insurance industry reinforces the need for unyielding dedication to integrity and ethics in insurance organizations. Those organizations that successfully build these traits into their corporate cultures are likely to be more successful than those that fail to do so. Ultimately, an industry-wide commitment of this type is probably the only way to overcome the poor reputation the industry faces.” Ethics Considerations for Property & Casualty Insurance Professionals
4. Ethics The etymological basis of the word “ethics” is the Greek word ethos, meaning habitual or customary conduct.
5. Ethics Defined A set of moral principles: a theory or system of moral values; The principles of conduct governing an individual or group; A guiding philosophy; A consciousness of moral importance.
6. Ethics: An Explanation Ethics are a personal set of values used by an individual to guide his or her actions. Ethics are not objective, but are subjective to the individual. Ethics are a continuing evolving code of conduct dependent upon circumstances and the life experiences of the individual.
7. “When I do good, I feel good; when I do bad, I feel bad. That’s my religion.” Abraham Lincoln
8. “Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy.” General H. Norman Schwarzkopf
9. “I consider ethics, as well as religion, as supplements to law in the government of man.” Thomas Jefferson
10. “Do unto others as you would have them do unto you.” The Golden Rule
11. Ethical Conundrums Is abortion wrong? When, if ever, is it proper to take another’s life? Is it wrong to steal to feed your children?
12. Socrates Believed people will do what’s good if they know what’s right and that evil or bad acts are due to ignorance.
13. Hedonist Follow the ethical premises that pleasure should be maximized and pain minimized.
14. Consequentialism Follows the idea that “the ends justify the means” meaning a morally right action is one that results in a good outcome.
15. Deontology Looks at the act itself and the end result does not matter, even if it is bad.
17. ORGANIZATIONAL ETHICS Code of Ethics – business or corporate ethics Code of Conduct – employee ethics Code of Practice – professional ethics
18. Why Organizational Ethics? Ethical codes are often developed by an entity to help provide direction between right and wrong within the context of that organization Ethical codes exist to guide all types of organizations, from those religious in nature to criminal enterprises.
19. Why Organizational Ethics? To define accepted/acceptable behaviors. To promote high standards of practice. To provide a benchmark for members to use for self evaluation. To establish a framework for professional behavior and responsibilities. As a vehicle for occupational identity. As a mark of occupational maturity.
20. The Code of Ethics Guidelines that govern the behavior of a company and its members. Often focuses on social issues – “Corporate Responsibility” Adopted to establish responsibility, integrity and credibility.
21. Goals of a Code of Ethics To protect and enhance an organization’s reputation by detailing expectation for behavior of its members when dealing with third parties. To protect the organization’s assets by setting clear expectations for behaviors that avoid conflicts of interest, questionable conduct, and illegal acts
22. A Word From the Wise If you lose dollars for the firm by bad decisions, I will be understanding. If you lose reputation for the firm, I will be ruthless.
23. The Code of Conduct Designed to influence the behavior of employees Defines the platform of the acceptable set of employee behavior. The main objective is to further promote a higher standard of practice within the organization Is often binding
24. The Code of Practice Codes of Professional Responsibility Adopted by a profession or by a governmental or non-governmental organization to regulate that profession
26. Cannons of the AICPCU Code of Professional Ethics Canon 1 – CPCUs should endeavor at all times to place the public interest above there own. Canon 2 – CPCUs should seek continually to maintain and improve their professional knowledge, skills, and competence.
27. Canon 3 – CPCUs should obey all laws and regulations, and should avoid any conduct or activity which would cause harm to others. Canon 4 – CPCUs should be diligent in the performance of their occupational duties and should continually strive to improve the functioning of the insurance mechanism.
28. Canon 5 – CPCUs should assist in maintaining and raising professional standards in the insurance business. Canon 6 – CPCUs should strive to establish and maintain dignified and honorable relationships with those they serve, with fellow insurance practitioners, and with members of other professions.
29. Canon 7 – CPCUs should assist in improving the public understanding of insurance and risk management Canon 8 CPCUs should honor the integrity of the CPCU designation and respect the limitations placed on its use.
30. CPCUs should assist in maintaining the integrity of the Code of Professional Ethics.
31. ETHICS DISCUSSIONS Define the issue Identify the alternatives Evaluate the alternatives Determine who makes the decision Implement the decision Ethics Considerations for Property & Casualty Insurance Professionals
32. Ethics Discussions Scenario 1 - Sue Who? You’ve worked at Acme Agency for 13 years with no complaints from management. A more recent hire, Charlie, has been promoted ahead of you although you’re more qualified. One day Charlie comments that he feels discriminated against and is going to sue Acme. You let it go, but over the next few months you overhear him making the same comments to other co-workers. One time you even hear him on the phone telling someone he needs a lawyer to sue Acme. What do you do?
33. Ethics Discussions Scenario 2 – Copy Time Acme Insurance Brokerage subscribes to a number of insurance industry newsletters. When a newsletter arrives the receptionist makes 100 copies. Each Acme account executive gets a copy to read and a copy is sent to each of Acme’s clients. Management thinks this is an invaluable service to Acme’s clients. Ethical? Ethics Considerations for Property & Casualty Insurance Professionals
34. Ethics Discussions Scenario 3 - Gratuities A customer has a yacht that your company will be discharging. The customer is present and watching the off-loading operation. The five stevedores you manage pull off a tricky maneuver transferring the yacht to the trailer. The customer is pleased and reaches into his pocket, pulling out a big wad of $20 bills as if to tip them. What if anything do you do?
35. Ethics Discussions Scenario 4 - Receiving a Holiday Gift A supplier sends a basket of expensive wine and cheese to your home at Christmas with a card: "We hope you and your family enjoy the goodies.” What action(s) might you want to take?
36. Ethics Discussions Scenario 5 - Sales Expense The purchasing manager for a large company agrees to give you an order (their first), expecting you agree to make a $200 donation to his favorite charity, a local youth sports team. How do you respond?
37. Ethics Discussions Scenario 6 – To Jail or not to Jail Six physicians are discovered by the IRS to have understated their taxable income. As legal advisers to the IRS Jerry and Paul agree that all six must pay back taxes and penalties but disagree about criminal prosecution. (cont.)
38. Ethics Discussions Scenario 6 (continued) Paul believes that only two of the doctors should be charged because the community cannot afford to lose any more than four doctors. Jerry believes that this is irrelevant and that they all should be prosecuted based on the evidence. Who is right?
39. Ethics Discussions Scenario 7 – Jaywalking While vacationing in a small, sleepy, quiet coastal town in Maine, you take your dog for an early walk on a Sunday morning. You come to an intersection with a stop light. Looking carefully in all directions you don’t see any cars. You notice a sign next to the stoplight that says: “JAYWALKING FORBIDDEN --violators subject to fine.”You look up and see that the stop light has turned red. Would it be wrong of you to cross the street against the stoplight?
40. Ethics Discussions Scenario 8 -- References A large, prospective client calls you and asks about a competitor's reputation. One of your long time customers had a very bad experience with this competitor. How do you respond to the prospect call?
41. Ethics Discussions Scenario 9 – For the Children You run an orphanage and have had a hard time making ends meet. A car dealership offers you a new van worth $15,000 for free if you will falsely report to the government that the dealership donated a van worth $30,000. You really need the van and it will give you an opportunity to make the children happy. Do you agree to take the van?
42. Ethics Discussions Scenario 10 – Pig Rights Would it be justifiable to whip pigs to death if more succulent pork resulted from this process, giving the consumers of pork more pleasure?
BackgroundLook around and see if there is someone just like you – same job, gender, education, religion, experiences growing up, success and failures.Lawyernot a philosopher. The notion of ethics is sometimes hard to grasp and what I think is ethical or unethical might not be ethical or unethical to you.
Bad Ethics leads to a bad reputation which leads to bad business.Same with lawyersImportance – people like to do business with trustworthy people
How are we going to get through this sessions:Background - conceptsCode of Ethics, Code of Conduct Code of PracticeGroup Participation – helps to have people offer their views to illustrate no one view is correct
Often used synonymously with moral or morality along with words such as “integrity” and “principle” “honor”
An important distinction exists between law and ethics. Obeying the law is the minimum level of ethical conduct enforced in society; ethical behavior includes more than simply legal behavior.Actions that are completely legal may be considered unethical. EXAMPLE: predatory lending – offering credit to people who may not be credit worthy and under terms that will probably make that person default. Legal, but ethical.
This is just one definition of ethics, and its not necessarily the right view. The debate on what is ethical behavior goes back to ancient times, with heavy weights like Socrates, Aristotle, Plato, Epicurus, Immanuel Kant and even Albert Einstein all having views on the meaning of ethicsMany people throughout history have talked about the importance of ethical behavior
Honest Abe
One of the great military strategist of our time saying throw strategy out over character
One of our nations founder’s – law is not enough
Almost universally recognized concept - Also called the ethic of reciprocityEthics keep you out of trouble, professionally and legally (audit, investigations)
Our individual life experiences and philosophies dictate what we think is ethical behavior which presents gray areas. There are no right answers. Several ethical philosophies have arisen to address ethical conundrums.Catholic – lawyer -- father
Obeying the speed limit – its posted, so you’ll abide by itWould the country be better if everyone knew every law? Probably not
Obeying the speed limit – if breaking it means you get where you want to do what you want faster, who cares. If I like to feel the wind rushing through my hair at 100mph then nothing should stop me.Would we all have happier lives if everyone did what they wanted to do? What if your pleasure causes me harm? OK under this view.
Obeying the speed limit – if I have to get my pregnant wife to the hospital b/c the baby is coming I can go ahead and run a few stop signs and speed.Would our country be better off if we decided euthanize victims of communicable diseases to halt the spread?
Obeying the speed limit – the speed limit must be followed, even if you have to get an injured person to the hospital and there are no other cars on the roadHow would your life be different if you made every decision about how to act regardless of the outcome?So what are ethical qualities? (flip)
Responsibility – make good on promises and commitmentsIntegrity – do what is right; never mind the consequencesCourage – make the right decision even if unpopularRespect – treat people fairly and consistentlyRICHERContext established, move to Organizational Ethics but discuss ethic codes in general
Organizational ethics as opposed to personal ethics can be broken down to three types (read)
Ethical codes range from the Ten Commandments which guide Christians in their daily lives to the codes followed by pirates. Gangs and criminal enterprises follow some sort of code – don’t snnitchExamples: the Precepts followed by Buddhists, the Hippocratic Oath which guides those who practice medicine and Bushido, the Japanese code of conduct and way of the Samurai.What we’re looking for is something higher than what the codified law provides.
It makes you think deeper than the bottom line plus establishment and compliance will likely help increase the bottom line.
It’s a tool for establishing a uniform set of rules and standards for a members of a group to followEthics codes provide written guidelines to follow when making tough business decisions
How important are organizational ethics?
Warren Buffet
Examples – identification of conflicts of interest, workplace attire, internet usage, acceptance or provision of gift, political or civic activities, handling confidential information, outside activities or employment, media inquiries
Rules of Professional Conduct published by Louisiana Attorney Disciplinary Board
American Institute for Chartered Property Casualty Underwriters -- agree to abide by a specific code of ethics-- 9 Canons (principles) with rules on how the cannon is to applyCPCU Society is optional, has it own Code of Ethics-- stresses ethics through The CPCU Creed and the CPCU Society Ethics Code
Legal, personal, company policy?
Take the co worker aside and say stop the comments?Go to your manager?Keep it to yourself?A – may just be blowing off steamB – May cause alienation from co-workersC - ?
Company policyAlienate workers/
First question – what’s the company policy?Alternatives?Who makes the call?
Again, what’s the company policy? Alternatives? Disclosure? This one is interesting because it’s a charitable contribution as opposed to a straight up bribe. Do you start down the slippery/slope? What if the next donation is to his brother’s fledgling start-up? Buying insurance from his wife?
If all six go to jail the greater community is harmed by lack of medical services. Wouldn’t prosecuting two be a wake up call to the others?
Legal issue. Alternatives? Show of hands on jay-walking. Does the intent of the law matter – trying to protect pedestrians from oncoming traffic and vice versa. Is it a crime if no one sees?
What information do you share with the prospect? Bring up the what goes around comes around rule and how I deal with reference requests.
Consequentialist says no problem; Deontologist says no way
