High Cost of Ethics Lapses, Part ?
I had written several blogs regarding the high cost of ethic lapses in consulting, in particular in June of last year Consulting Ethics Challenges, which addressed the very public nature of PwC Australia’s ethics problems.
The high costs of those ethics problems are now very visible and quite frankly ugly. Nic Fildes, journalist for Financial Times, reported on recent events in PwC Autralia slashes jobs after tax leaks scandal. PwC is cutting 329 roles and 37 partners as part of an overhaul “in the wake of a damaging ‘tax leaks’ scandal. He goes on to write that these cuts come “on top of about 350 made last year.”
PwC employs about 7,000 people in Australia and has been embroiled in this scandal for over a year at a great cost of both direct funds and reputational damage.
In the June blog, I had suggested that adherence to an enforceable Code of Ethics on the part of Leadership, Partners and staff of PwC would have likely precluded this very expensive hit – both the short-term financial damage and the longer-term reputational damage in Australia and beyond.
As a professional consultant I have adhered to such an enforceable Code of Ethics for 38 years, it has never steered me wrong. The Code is composed of the 15 (simple) parts, consider what if PwC’s partners and professionals had adhered to the same. For example, I present only five (of the 15) as pertinent examples (and highlighted words of pertinence):
1.0 I will serve my clients with integrity, competence, independence, objectivity, and professionalism.
5.0 I will treat appropriately all confidential client information that is not public knowledge, take reasonable steps to prevent it from access by unauthorized people, and will not take advantage of proprietary or privileged information, either for use by myself, the client’s firm, or another client, without the client’s permission.
6.0 I will avoid conflicts of interest or the appearance of such and will immediately disclose to the client circumstances or interests that I believe may influence my judgment or objectivity.
11.0 If within the scope of my engagement, I will report to appropriate authorities within or external to the client organization any occurrences of malfeasance, dangerous behavior, or illegal activities.
13.0 I will represent the profession with integrity and professionalism in my relations with my clients, colleagues, and the general public.
Read these five. Deeply consider, as a management consultant, how an understanding and adherence to these would have effectively precluded the ethics lapses and conflict of interests that now severely tarnished PwC’s reputation and will likely cost the firm and its partners significant amount of money among other future problems.
Five simple statements (out of 15 total)! Simply guiding a consultant to do the right thing.
Then consider PwC’s costs for not adopting and adhering to this Code of Ethics for management consultants. Incredibly short-sighted, selfish, and expensive (directly viz. lost revenue and increased legal expenses and indirectly viz. reputation), in my view.
Demand more of your consulting professionals within whom you put your trust. Ensure they, too, are professional and adhere to this Code.
