Latest news with #ethicalleadership
ABC News
30-05-2025
- Business
- ABC News
Is transparency enough to protect consumers and the public interest? - ABC Religion & Ethics
Transparency has been the favoured ethical solution to the problem of political and corporate corruption in the twenty-first century. In my interactions with senior leaders from around Australia, transparency is consistently named as a key personal as well as institutional virtue — accordingly, it features in many of their organisation's values and codes of conduct. From disclosure statements for banking, financial and technological services to open-government initiatives projects and real-time political donation registers, Australian leaders and both private and public sector organisations have shared the faith of liberal democracies worldwide that transparency achieves two important goals: inhibiting corruption by exposing it to the 'disinfectant' of 'sunlight'; inhibiting corruption by exposing it to the 'disinfectant' of 'sunlight'; fostering public trust by demonstrating an individual or institution has nothing to hide. But does transparency actually achieve these aims? Evidence suggests that, while transparency is a necessary tool in the anti-corruption arsenal, it is insufficient on its own to halt corruption or repair declining levels of social licence and trust. What other virtues, practices, or systemic approaches might complement transparency to create a more holistic framework of institutional integrity? How can leaders and organisations move from revealing information to cultivating a culture of genuine ethical commitment, where transparency is just one example of a deeper, more substantive moral infrastructure? Transparency and moral corruption In 2017 the federal government established the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The inquiry was long overdue, preceded by a cascade of post-Global Financial Crisis corporate scandals in which golden parachutes were plentiful and meaningful accountability was scant. As Commissioner Kenneth Hayne made clear in the final report issued in 2019, detecting corruption was not enough to deter it. Instead, he argued, 'misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly punished.' Cornell University's Sunita Sah concurs that disclosure is not enough. In a report commissioned by the Royal Commission, Sah shows how transparency measures fail to reduce the incidence of the sort of conflicts of interest rife within Australia's banking and financial services sector. According to one report, 93 per cent of advisors without a conflict of interest gave clients financial advice that served the client's interests, while those who were conflicted did the same in a mere 18 per cent of cases. Other research has shown that disclosure — the prescribed solution for mitigating the harms of conflicts of interests — has little effect. In one study, advisors who disclosed their conflicts to a client felt that disclosure 'morally licensed' them to give that client biased advice. Indeed, some advisors gave even more biased advice after disclosing a conflict to counteract what they anticipated would be the discounting of that advice by the client. They needn't have worried. This research suggests that when advisors disclose their conflicts to clients, it increases the trust the client has in the advisor's advice. Why? Because they interpret the disclosure as an indication of the advisor's ethical bona fides . As this latter example makes clear, transparency in the form of disclosures relevant to decisions are seen as an essential step in securing a valid consent whether that consent is to the provision of financial advice, a medical procedure or the terms of service for a phone application. Transparency and trust The implicit promise of transparency is to inform clients or citizens in ways that increase their engagement and trust. Certainly, this seems to be the purpose of the parliamentary register of members' interests — in which Prime Minister Anthony Albanese, for example, dutifully registered the business or first-class upgrades provided to him by Qantas. Indeed, the fact that he had complied with such disclosure requirements was his primary defence when the then-leader of the Opposition continued to ask questions about the practice that commentators agreed did not pass the 'pub test'. It failed the pub test because, while our representatives would like to believe that open disclosure of corruption is sufficient to satisfy the conditions for public trust, the public disagrees. Instead, some seem to feel that insofar as the requirement for such disclosures does not deter the corruption from happening in the first place or lead to the denouncement and punishment recommended by Commissioner Hayne, the problem is not solved. The key take-away for leaders is that sunlight is only the best disinfectant when it deters corruption from happening in the first place, or when it leads to denunciation and punishment: For the individual required to disclose , becoming aware of the limits such disclosures have on self-serving behaviour is critical — which is to say, if you want to avoid undermining public trust (a worthy goal) the solution is to avoid self-serving behaviour, not disclose it when it occurs. , becoming aware of the limits such disclosures have on self-serving behaviour is critical — which is to say, if you want to avoid undermining public trust (a worthy goal) the solution is to avoid self-serving behaviour, not disclose it when it occurs. For institutional leaders, the time to consider the limits of disclosure schemes in preventing corruption and undermining the public trust required for social licensing is now — the evidence of its limited efficacy and unintended consequences is in. To be clear, this does not mean that disclosure plays no role in an effective anti-corruption and pro-trust approach — simply that it is not a stand-alone measure. Instead, transparency measures need to be coupled with other practices that deter corruption in the first place and/or build public trust. Perhaps the most powerful advice is that of Sunita Sah herself: 'Even when legal regulations are weak or unenforceable, or awareness of bias is low, professionals may comply with standards when reminded of relevant ethical norms simply because putting the [client/citizen] first is the right thing to do.' Leslie Cannold is an Associate Professor of Ethics and Impact and the Resident Ethicist at the Cranlana Centre for Ethical Leadership at Monash University.
CBS News
21-05-2025
- Business
- CBS News
Denver International Airport employees question CEO about $19,000 business class flights; "Creates a rift"
Denver International Airport CEO Phil Washington is again being pressed for answers about costly business class tickets that he approved for his executive staff -- one costing over $19,000 to attend an April conference in Madrid. The questions are now coming from his own employees. A photo from Denver International Airport in Colorado in December 2024 AAron Ontiveroz/The Denver Post via Getty Images At a quarterly "Town Hall" meeting Monday for Denver International Airport workers, one asked "about the media story that ran recently on travel." The anonymous employee asked about the "ethical decision to spend quite a bit on an international business class ticket." According to the meeting moderator, "The comment was, 'It creates a rift in the sentiment between front line and senior leadership.'" Earlier this month, a CBS News Investigation reported on the trip Washington took to the three day conference with eight members of his executive staff. The overall cost of the trip for the nine execs to attend the three day conference was about $165,000, or an average of about $18,000 for flights, conference costs, hotels and meals. Washington and all of his subordinates flew either business class or first class both to and from Madrid, with one ticket costing $19,194.21 and another coming in at just under $16,000. Two other roundtrip fares were about $12,000. And the other five ranged from $9,000 to $11,000. Responding to the employee question Monday, Washington said, "I think the conference was worthwhile. It was a great investment in our folks." He explained the high cost of tickets, saying "All of the travel requests should be done at the same time. In this case they were not. Some travel requests came in a little later." Washington explained to employees, "In this case some prices went up at the wrong time when we were reserving those tickets." Robert Laney, a travel consultant who specializes in seat upgrades for international flights, said the airport should simply have waited a bit longer to buy tickets as prices would have come down. "You would have hit a day where United would have come down to earth and you would have seen eight (thousand), nine (thousand) at some point in time," said Laney. He said he was in "shock, disbelief" that Denver International Airport paid so much for business class seats to Spain. Records and receipts obtained during the CBS News investigation showed most of the tickets for the airport execs were purchased several months in advance -- none were last minute purchases. The money used to buy the tickets on United were derived from Denver International Airport revenues from concessions, car rentals and other airport user fees. Washington told the airport employees "We are reviewing our (travel) policy. There are some revisions we could make to that policy." An airport spokesperson said there are no specific policy changes to share yet, as the airport is looking at their entire policy that allowed the pricey travel, from travel requests to booking to reimbursements. "But," said Washington, "I stand by the professional development opportunity as an investment in our people that will pay off in the long run."
