1 College and University Auditors of Virginia ETHICS (And Why Good Leaders Go Bad) Craig Anderson Deputy Director, University Audit and Health System Audit Virginia Commonwealth University

2 OUTLINE 1. Introduction / Background 2. General Thoughts & Principles 3. “Slippery Slope” Model 4. Closing Comments & Questions

3 INTRODUCTION  My Background / Biases  VCU Experience  Prior Experiences

4 WHAT IS ETHICS ?

5 Merriam-Webster:  Discipline dealing with what is Good & Bad, with Moral Duty & Obligation  Set or System of Moral Values and Principles  A Guiding Philosophy

7 WHAT ARE THE OBSTACLES TO ETHICAL BEHAVIOR & DECISION-MAKING ?  Most of “It” is Gray And Many Times:  It’s Easy to Do the Wrong Thing  It’s Hard to Do the Right Thing

8 WHY IS IT EASY TO DO THE WRONG THING ?  Lack of Knowledge of the Expectations or Requirements  Lack of Understanding  Intent

9 WHY IS IT HARD TO DO THE RIGHT THING ?  Frustration with Policies or Procedures (without understanding the reason for those P&P)  Time or Departmental Pressures  Competing Priorities  Short-Term Impacts

10 SO WHY DO GOOD LEADERS GO BAD ?

11 SLIPPERY SLOPE MODEL 1. The Early Years 2. Entitlement 3. Arrogance 4. Greed 5. The Fall from Grace

12 SLIPPERY SLOPE MODEL STAGE 1 - THE EARLY YEARS  “He was impressive, young and aggressive, saving the world on his own” (Jimmy Buffett)  Talent, Hard Work, Well-intentioned  Knows & Respects “the rules”  Usually rises rapidly in the organization

PLATO ~ 400 BC Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws. 13

OSCAR WILDE Morality, like art, means drawing a line somewhere 14

WILLIAM J H BOETCKER That you may retain your self respect, it is better to displease people by doing what is right than to temporarily please them by doing what you know is wrong. 15

16 SLIPPERY SLOPE MODEL STAGE 2 - ENTITLEMENT  I Earned It  I Deserve This  It Comes with the Territory  It’s No Big Deal

ALBERT EINSTEIN Relativity applies to physics, Not ethics. 17

18 SLIPPERY SLOPE MODEL RELATIVITY  Even if You Win the Rat Race, You’re Still a Rat.

19 SLIPPERY SLOPE MODEL STAGE 3 - ARROGANCE  They Start to Believe the Press Clippings  All the Successes are due to My Efforts  Better to Ask Forgiveness than Permission

20 SLIPPERY SLOPE MODEL  Don’t get down in the Mud with a Pig; You Both get Dirty but Only the Pig Enjoys It.

21 SLIPPERY SLOPE MODEL STAGE 4 - GREED Earth provides Enough to Satisfy Every Man’s Needs, but Not Every Man’s Greeds GANDHI

22 SLIPPERY SLOPE MODEL STAGE 4 - GREED  At this point, the Leader’s Greeds take precedence over the Organization’s Needs  The Leader’s Priorities drive the Organization’s Priorities  The Leader’s Actions no longer support the Organization’s Mission

NATIVE AMERICAN PROVERB A Native American grandfather talking to his young grandson tells the boy he has two wolves inside of him struggling with each other. The first is the wolf of peace, love and kindness. The other wolf is fear, greed and hatred. "Which wolf will win, grandfather?" asks the young boy. "Whichever one I feed," is the reply. A Native American grandfather talking to his young grandson tells the boy he has two wolves inside of him struggling with each other. The first is the wolf of peace, love and kindness. The other wolf is fear, greed and hatred. "Which wolf will win, grandfather?" asks the young boy. "Whichever one I feed," is the reply. 23

24 SLIPPERY SLOPE MODEL DENIAL  Don’t Listen when the Foundation is Crumbling  This is a Short-Term Problem  I Know Better than They Do; I Built this Place

25 SLIPPERY SLOPE MODEL STAGE 5 - THE FALL  Cumulative Effect of  Entitlement  Arrogance  Greed

POTTER STEWART Ethics is knowing the difference between what you have a right to do and what is right to do. 26

27 SO WHERE DO WE GO FROM HERE ?

28 YOUR RESPONSIBILITY  Educate yourself –understand the relevant policies and procedures  Ask for Help when you don’t understand  Lead By Example !!!  Speak up when you see something wrong

29 SUMMARY  Power is the Common Denominator in the most damaging cases I’ve worked on  Absolute Power Corrupts, Absolutely  There is no Reset Button in Life

30 EVERYTHING I NEED TO KNOW ABOUT ETHICS I LEARNED WHILE SHAVING

31 2 CLOSING THOUGHTS  Across our Organizations, Thousands of Good, Sound, Ethical Decisions are Made Every Day.  One Person CAN Make a Difference !

MARK TWAIN Always do right; This will gratify some And astonish the rest. 32

Case Studies: Case Study 1 – Pcard Misuse Case Study 2 – Grant Fraud 33

34 CLOSING  Questions  Comments  Thank You !

ELBERT HUBBARD The path of least resistance is what makes rivers run crooked. 35