1. Ethics: Roles, Responsibilities, & Resolution
Lori Cox, CIA, CGAP, CCEP
IIA, AGA & ISACA Joint Event
March 16, 2018

2. Ethics: Roles, Responsibility, Resolution
Agenda
Ethics Defined
What do you think?
Ethical Disconnects & Blind Spots
Creating a Strong Ethical Climate
Ethics in the Organization
Resolving Ethical Dilemmas

4. Ethics “Warm-up”
Quiz

5. Ethics
So what is Ethics?

6. A set of moral principles or values.
Ethics Defined
A set of moral principles or values.
The discipline dealing with what is good and bad and with moral duty and obligation.
Well-founded standards of right and wrong that prescribe what humans ought to do.
Norms for conduct that distinguish between acceptable and unacceptable behavior.

7. Ethics vs. Values Values are a part of a person’s ethics;
~About right and wrong.
~How an honorable person should behave.
Values
~All important beliefs.
~Ethics deal only with beliefs of right and wrong.
Values are a part of a person’s ethics;
ethics may not necessarily be a part of a person’s values.

8. Advantages of Ethics Competitive Edge Credibility Efficiency
Recruiting
Morale
Loyalty
Personal Satisfaction
Josephson Institute of Ethics, 2018

9. Ethics
What do you think?

10. Obey the law without exception.
What do you think?
Obey the law without exception.
Or are there exceptional occasions where people should follow their conscience – even if it means breaking the law.

11. Social and cultural norms sufficient to guide ethical behavior.
What do you think?
Social and cultural norms sufficient to guide ethical behavior.

12. What do you think?
Unethical decisions are more of a function of the individual decision maker rather than the decision maker’s environment.

13. What do you think?
Most ethical violations are committed by well-intentioned employees who think they are advancing the company’s interest.

14. People engage in activities they don’t realize are unethical.
What do you think?
People engage in activities they don’t realize are unethical.

15. What do you think?
Ethics is not only a set of moral rules, it’s a mindset that affects how you look at situations and what you see.

16. What do you think?
If we solved all ethical problems would we also solve all or most of our compliance problems.

17. Loyalty to a group or organization tends to compromise your ethics.
What do you think?
Loyalty to a group or organization tends to compromise your ethics.

18. Is it ethical? Take the test… The Role Model Test The Golden Rule
The Mummy, Tummy, & Headline Test

19. Is it ethical? The 5 Principles… Do No Harm Make Things Better
Respect Others
Be Fair
Be Loving
Ethical Intelligence, Bruce Weinstein, PhD, New World Library, 2011

20. Ethical Disconnects & Blind Spots
So why do individuals fail to do what’s right even when they “know” what is right?

21. Ethical Disconnects & Blind Spots
Ethical breaches are often caused by “disconnects” and
“Blind Spots”.
Blind Spots, Max Bazerman and Ann Tenbrunsel, 2011, Princeton University Press

22. Disconnects
Our perception: We see ourselves as the guardians of trust in our organizations – far more likely to disclose ethical misconduct than to misbehave unethically ourselves.
Blind Spots, Max Bazerman and Ann Tenbrunsel, 2011, Princeton University Press

23. Disconnects The Reality:
Reasoning limitations in our minds can make us unaware of the moral implications of our decisions. (
Blind Spots, Max Bazerman and Ann Tenbrunsel, 2011, Princeton University Press

24. We are judged, and judge others, by our last worst act.
Disconnects
Consider…
We judge ourselves by our best intentions, our most noble acts, and our most virtuous habits.
We are judged, and judge others, by our last worst act.
Blind Spots, Max Bazerman and Ann Tenbrunsel, 2011, Princeton University Press

25. Blind Spot blind spot ˈblīn(d) ˈˌspät/ noun
the point of entry of the optic nerve on the retina, insensitive to light.
an area where a person's view is obstructed.

26. Our “Blind Spots” are exposed every day.(

27. Consider… Perception vs. Reality
People simultaneously think of themselves as good people yet some frequently lie or and cheat (typically in a “minor” way).

28. Consider… The “right thing to do” is not always clear.
Everyone may not agree on what the “right” thing to do is.
There may be conflicting messages/values.
It can be difficult to do the right thing … even when you know what that is.

29. Causes of Disconnects & Blind Spots (DBS)
Rationalization
Normalization
Slippery Slope
Selective Attention
Self-Serving Bias
Doctrine of Relative Filth
Framing
Willful Blindness

30. Causes of DBS
Exercise

31. Recognizing & Addressing DBS
Recognize that we are prone to behave in ways that serve our own interests.
Consider other perspectives.
Challenge your own thoughts and decision processes.
Slow down and think about it.

32. Recognizing & Addressing DBS
Implement controls that force contemplation of ethical decisions.
Readily disclose potential conflicts.
Remember that we are only as strong as our weakest link.

33. Creating a Strong Ethical Climate: The Professional’s Contribution
Abide by the profession’s code of ethics.

34. PRINCIPLES & RULES OF CONDUCT
Code of Ethics
Designed to promote an ethical culture in the professional practice of internal auditing.
PRINCIPLES & RULES OF CONDUCT
Integrity
Objectivity
Confidentiality
Competency

35. Creating a Strong Ethical Climate
Set the example – go above and beyond.
Clearly communicate the organization’s and the profession’s core values.
Empower staff to report unethical behavior.

36. Creating a Strong Ethical Climate
Monitor and evaluate the ethical climate in the organization.
Promote internal training and publicity.
Be consistent.

37. Ethics in the Organization: The Auditor’s Role
IA Standard 2110.A1: The internal audit activity should evaluate the design, implementation, and effectiveness of the organization’s ethics-related objectives, programs, and activities.

38. Ethics in the Organization: The Auditor’s Role
Evaluate:
Code of conduct.
Strategies used to enhance the ethical culture.
The communication and demonstrations of ethical expectations..
Stakeholder’s understanding of ethical requirements.

39. Ethics in the Organization: The Auditor’s Role
Promote the need for ethical behavior as part of routine audit work.
Ensure there is adequate expertise to conduct ethics audits.
Approach ethics audits with a clear objective.
Focus on proactive strategies.

40. Situations or problems where a person has to make a
Ethical Dilemmas
Situations or problems where a person has to make a
difficult choice:
Ethical vs. non ethical
Two ethical choices

41. Causes of Ethical Dilemmas
Pressure from Management
Internal Conflict
Team Dynamics
Ambition and Discrimination
Negotiation Tactics
Working Conditions

42. Resolving Ethical Dilemmas
Set the example.
Provide guidance, advice, and analysis.
Remember the principles…
Will this avoid causing harm?
Will it make things better?
Is it respectful?
Is it fair?

43. Summary Ethics Defined Ethical Disconnects and Blind Spots
Creating and Ethical Climate
Ethics in the Organization
Resolving Ethical Dilemmas

44. Contact Information
Lori Cox
(480)