verging_on_random

Corporate ethics

April 1, 2008 on 9:47 pm | In Uncategorized |

You might have seen this story in last Saturday’s Sydney Morning Herald:

A PRIVATE school principal sacked for defrauding $2 million in government funding in a failed bid to save his school from closure says he is not alone in rorting the controversial Commonwealth funding scheme.

“It does go on quite a lot,” Lyn Mazey told the Herald yesterday, a day after 120 students at the Lakeside Christian College secondary campus in Tweed Heads learnt it would close on April 11 because of unpaid debts of more than $5.5 million.

At first I thought this information about other schools doing it was in the nature of a confession; that Mazey was finally getting it all off his chest to try to make up for his guilt. But as I read on, it became clear that he wasn’t trying to do that at all. He was, in fact, explaining why he didn’t think he had actually, personally, done anything that was, you know, like wrong or anything. We see in the quote above the first leg of his self-justification, one that will be familiar to anybody who deals with small children: “But everybody else does it”.

Mazey went on in fact to give such a textbook display of contemporary corporate ethical logic that I’ve saved the article for future use as a case study. After trotting out the line about the other boys doing it too, he brought out excuse number 2:

He admitted to “overstating” enrolments for at least three years in a row and said the Federal Government had not audited his school since it opened.

“In 16 years I was there, we never got audited,” Mr Mazey said. “There needs to be a regular auditing process.”

There, you see? It was the fault of the government for placing him in a position of moral hazard (did I mention this was a religious school?). The stupid government gave him all this money and never even checked to see if he was telling the truth. I mean what normal god-fearing principal wouldn’t take advantage of such an opportunity to tell a few fibs and wangle an extra million or two out of the pockets of his fellow citizens … oh wait, no, he wasn’t getting money from fellow Australians, it was money belonging to ‘the government’. It’s a well-known fact that government money is grown in large hydroponic factories in Belconnen and taking the odd million doesn’t actually hurt real people or anything.

And finally, if you weren’t convinced by his defence so far, he’s got this killer argument:

Mr Mazey stressed he had gained no personal benefit. “In hindsight, I wouldn’t do it again, but the school wouldn’t have survived,” he said. “I think it is a tremendous pity after I put in 16 years to build the school from nothing, only to see it closing.

“I ruined my career through doing it and it is something I have to live with.”

You know, I’m tearing up just thinking about the sacrifices that this wonderful man has made. All for no personal benefit. Well apart I guess from the status of being headmaster of a well-respected college, and being called ’sir’ by hundreds of kids, and invited to Rotary meetings, and fawned upon by staff hoping for a pay rise, and presumably enjoying a competitive salary package with associated benefits, and potentially a launching pad for a headmastership at a larger and more prestigious school … apart from those few trivialities he got no benefits from his work at the school at all. I don’t think he deserves to be prosecuted, I reckon he should get a medal for self-sacrifice in the cause of education.

Unfortunately, this mentality is typical of the ethical standards that are widespread amongst Australian managers. It’s OK to do something if others are doing it too; if people fail to be suspicious enough to check up on you all the time it’s their own fault if you rip them off; and personal benefits are only wrong if they take the form of large lumps of cash which you misappropriate for your own use.

Head of Christian Schools Australia, to his great credit, corrected Mazey’s self-serving snivelling:

“This is not the fault of the Commonwealth,” Mr O’Doherty said. “He has done the wrong thing, and it has led to a bad outcome. He is responsible and accountable.”

Responsible and accountable? Gosh, you don’t hear words like those associated with Australian managers very often.

Actions and attitudes like Mazey’s create a predictable response over time: more audits, more regulations, more supervision, more complex procedures. His ethics are the ethics of the immature school playground, leaving no room for adult behaviour governed by independent moral principles. Fortunately not all managers share his rudimentary ethical standards, but sadly, many do.