January 2008 Archive

Last week Societe Generale, one of France’s largest bank announced that one of its traders caused the bank to lose $7 Billion. It is an astonishing number that is difficult to comprehend. This is without a doubt the largest fraud in banking history.
Societe Generale announced yesterday that it was selling $8 billion to raise capital for the bank.

The said trader, 31 year-old Jerome Kerviel was only a midlevel employee. He has been arrested and is being questioned by the police.

Many believe that it was impossible that Jerome acted alone. Some even believe, such as Elie Cohen, professor of economy and director of research at the National Center of Scientific Research (CNRS) that the bank is trying to cover its own loses by making the trader a scapegoat.

As expected, a full investigation is underway but apparently Mr. Kerviel did not personally profit from the fraud. He was just trying to cover up some earlier loses he had encountered. In his attempt to cover his original mistake he kept making greater and greater mistakes until they reached the astronomical amount of 7 Billion dollars.

We all are tempted to cover our mistakes and that is when we may cause the greatest damage both to ourselves and to others. Hopefully the financial consequences of our failings will not reach the billions!

We should be ready when we commit a mistake to face the music, even swallow our pride and we will earn the respect not only of others but more importantly of yourselves.

As Confucius said:

Be not ashamed of mistakes and thus make them crimes.

In last week’s magazine section of the New York Times, Steven Pinker, a professor of Psychology at Harvard University wrote a very interesting and insightful article entitled "the Moral Instinct: Evolution has endowed us with ethical impulses. Do we know what to do with them?"

The article has generated quite a buzz in the blog world.

The essay addresses some interesting questions one of which is fundamental: Is a moral sense an innate part of human nature? The author believes that there is "circumstantial evidence" that morality genes exist.

This could very well be true. The fact that one day we may be able prove it scientifically or even locate a morality gene in our system is quite amazing.

However we have to make sure that the concept does not reduce our personal responsibility in making tough ethical decisions and give us excuses when we make a decision we later think is wrong. "The devil made me do it" is never to right response to a shortcoming.

I always believed that we all have an innate conscience but that our individual and our collective conscience evolve with experience, information and education. Providing information and education is one of the roles that an ethicist plays in society.

What about our soul? Will we one day isolate the soul gene? I doubt it. As Andre Frossard, the French Catholic author and journalist, who I had the honor to know quite well once said: "Never ask Science to answer your metaphysical questions."

A colleague asked me during our annual Holiday party: "What about ethics and dancing?" I found it to be an interesting question. What about ethics and corporate Holiday parties? Is there any connection? I think there is. Ethics very often is about values and boundaries.

Company Holiday parties are a tradition in America. According to an American Express survey, more than 86% of companies hold such parties every year.

What values are represented in company parties?

First and foremost a company party is a gift (an expensive one) from the employers to the staff. It is a way for employers to rewards employees for a job well done. However it is often considered by the employees to be an entitlement. Very few employees think or take the time to write an email to management simply to say "thank you." Gratitude is an important value that is sometimes sadly ignored.

Company parties also help develop a sense of belonging and the notion that we are all on the same team. The camaraderie experienced in a party could be considered as a democratization of the workplace.

It may be seen that boundaries are somehow blurred in the interaction between employer and employees at a party, like a temporary suspension of hierarchy. Boundaries are also in some way extended between employees themselves, particularly in dancing.

Yet those boundaries remain although a too heavy intake of alcohol may blur them even more! Rob Hard,an event manager and communication consultant indicated that in a recent survey, 15% of employers surveyed declared that inappropriate behavior at a company party have impacted an individual’s career growth.

How can we recognize those boundaries and make sure we do not transgress them?

I think the notion of respect can guide us. We should make sure that whatever we do or say at a company party is not disrespectful in any way. Respect and self-respect is always a good guiding value both in our private and business life.

As the 19th Century English mathematician, astronomer and chemist John Herschel once said:
"Self-respect is the cornerstone of all virtue."