Monkey Business: A Neo-Darwinist Approach to Ethics Codes

John Dobson

Financial Analysts Journal, 2005, vol. 61, issue 3, 59-64

Abstract: Contrary to the dictates of homo economicus, to be guided by a code of ethics does not entail sacrificing one's self-interest; rather, it entails correctly defining one's self-interest as a professional. A genuine concern for others, which is the theme of any sound code of ethics, is a natural human drive. An organizational culture that recognizes and nurtures this drive through the active implementation of an ethics code—from top management on down—is a successful one. If the code is grounded in the correct definition of professionalism as commitment to the profession and to the community, those guided by the code will be successful professionals. In the business jungle, as in the primeval jungle, the keys to success are honesty, fair dealing, and cooperation. Man is a social animal. Ethics codes are now ubiquitous in financial organizations. But a central question remains unanswered: To what extent do the codes and training achieve their desired objective? This article addresses major reasons why codes of conduct are generally ineffective in shaping behavior and how the problem can be fixed.A primary reason for people's skepticism about ethics codes is the widespread belief that the behavior espoused in ethics codes is, in a fundamental sense, unnatural and irrational. People are the rational wealth maximizers of classical economics and game theory—homo economicus. Recent developments in biology, psychology, and neuroscience, however, indicate that the motivations ascribed to people by these theories are too narrow. Research shows, for example, that many humans place some intrinsic value on fairness or fair distribution. Moreover, this trait is not unique to humans; studies of nonhuman primate behavior have found a similar tendency. The evidence from biology and psychology is that in advocating virtuous behavior, such as honesty and empathy, ethics codes are advocating natural behavior.Therefore, contrary to the dictates of homo economicus, to be guided by a code of ethics does not entail sacrificing one's self-interest; rather, it entails correctly defining one's self-interest as a professional. A genuine concern for others, which is the theme of any sound code of ethics, is a natural human drive. An organizational culture that recognizes and nurtures this drive through the active implementation of an ethics code—from top management on down—is a successful one. If the code is grounded in the correct definition of professionalism as commitment to the profession and to the community, those guided by the code will be successful professionals. In the business jungle, as in the primeval jungle, the keys to success are honesty, fair dealing, and cooperation. Man is a social animal.

Date: 2005
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DOI: 10.2469/faj.v61.n3.2728

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