What is moral courage?
What is moral courage in the workplace, and do you have it?
In November 2015 ICAS launched ‘The Power of One’ initiative and at the same proposed the introduction of a sixth fundamental ethics principle; that of ‘moral courage’ as a means of helping to ensure the profession operates in an ethical manner to influence change.
Following a consultation and based on the considered feedback received from respondents we very much remain committed to the concept of moral courage.
ICAS thinking has, however, further developed and we will now promote moral courage as an enabler, i.e. a characteristic that is necessary to be present to help ensure adherence to the five fundamental ethics principles. The Ethics Board is currently giving due consideration as to how this can best be reflected in the ICAS Code of Ethics.
If you know something is wrong and you choose to do nothing, you become complicit.
Michael Woodford
What is moral courage in practice?
We define moral courage as the ability to exhibit fortitude and a constant determination to exert professional scepticism. This includes challenging others who are behaving inappropriately, and to resist the exploitation of professional opportunity for private benefit rather than the public interest.
Courage requires strength, and may not be easy when you are not placed in a senior role with the powers to enact and influence direct change. However, it is possible for all of us to resist influences or agendas that favours immoral and unethical acts, such as doctoring financial results or hiding pitfalls for the ‘good’ of the company.
All individuals in the accountancy and finance business will face pressure in their lives to cut corners or turn a blind eye to unethical or inappropriate behaviour, but demonstrating moral courage can reduce the potential for compromising the principles of our profession.
Let’s look at what moral courage is, and what it requires of an individual. Michael Woodford, the former CEO of Olympus, spoke on the issue at an ICAS event: “If you know something is wrong and you choose to do nothing, you become complicit. People think that rather than confront the issue, you can walk away, but that’s not the case if you are a senior officer of a corporation.”
Bravery in the face of adversity
Michael Woodford is known for his role in exposing £1bn of fraudulent activity at Olympus after taking over as CEO. Soon after taking up his position, Michael discovered the scandal after a friend emailed him an article about Olympus business deals detailed in a local magazine.
It made several claims about the company, but no-one at Olympus was willing to talk about why the company had purchased three “Mickey Mouse” companies and paid £687m in mergers and acquisitions advice. The huge sum of money was traced by forensic accountants to the Cayman Islands, where it disappeared. Further press claims insinuated the fraud had links to the Japanese mafia.
In the face of extreme circumstances, it took a considerable amount of moral courage to even raise the issue with the Olympus bosses, never mind facing up the fact that it could have ties with the criminal underworld. The Olympus board summoned Michael to a meeting where he was instantly dismissed. He had blown the whistle on a huge fraud and lost his job because of it, but that did not deter him from taking vital evidence to the press and police.
The more that you endeavour to breathe life into the individual values expected of a Chartered Accountant, the better the profession will be for it.
In the end, the courts found in his favour and awarded him £10m in settlement fees after the CEO resigned. Since then, Michael has been awarded titles such as Businessperson of the Year, and helped to kick-off corporate governance reform in Japan; a culture that, up until then, had remained somewhat secretive about salacious business activities.
What would you do?
Even if you are not a senior officer, how willing would you be to confront a tricky situation? If you witness illegal accounting practices, who would you report these to, if at all? How willing are you to be tarred by the same brush as those committing less than savoury practices in your workplace?
This is not to say that the task would not be difficult; it’s important to make small inroads towards ethical practices and become an influencer; it could be a case of refusing to adopt a practice that you know to be suspect, and demonstrating to the rest of your colleagues that you will push forward with the principles of the profession.
Moral courage could even be pointing out gender, sexuality or race issues that have become a common accepted practice within the workplace, and taking the stand to say this is not ethical behaviour. Your strength could be the start of something new and the abolition of outdated and potentially dangerous practices.
The more that you endeavour to breathe life into the individual values expected of a Chartered Accountant, the better the profession will be for it.
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