Misbehavior is not a sign of bad character; it results from the complexities of human psychology and social dynamics. As a General Counsel running a legal function, it is always good to keep in mind that even – or perhaps especially – people you least expect misbehave. Key question is, then, how to deal with that within your organization?
Introduction
Even the most well-intentioned employees can occasionally stray from ethical behavior, presenting a challenge for legal teams to navigate. As General Counsel (“GC”), understanding why good people misbehave is essential for mitigating risk and fostering a culture of compliance. Misconduct often stems from cognitive biases or situational pressures, rather than inherent dishonesty. By exploring the psychological and social factors behind ethical lapses, legal departments can better identify the root causes of bad behavior and implement strategies that can manage these risks.
Why Good People Misbehave
Good people often misbehave not because they are inherently unethical, but due to a combination of psychological and social factors that distort their moral judgment.
Psychological factors
- Moral Muteness: Fear of being a snitch can prevent individuals from speaking up, prioritizing social harmony over ethics.
- Moral Deafness: A desire to achieve specific objectives can lead people to ignore or dismiss uncomfortable truths.
- Moral Blindness: Rationalizing misconduct allows individuals to overlook their unethical actions.
Social factors
- Perception Matters: Individuals can see the same situation in vastly different ways.
- Group Dynamics: Social pressure and conformity can lead good people to compromise their values.
- The Balance of Self-Perception: The conflict between wanting to feel honest and the temptation of personal gain influences decision-making.
- Obedience to Authority: Individuals may prioritize authority figures’ expectations over their moral compass.
- Focus on Outcomes: A singular focus on results can lead to overlooking compliance and ethical standards.
- Rationalization of Behavior: Misconduct often stems from justifying actions—“Everybody does it” or “It’s not that harmful.”
Address the Root Causes of Bad Behavior
Armed with understanding why good people misbehave, the first step to addressing this is conducting effective analysis into the root causes of such behaviors.
One method proven to be effective for that purpose is the “Kids Curiosity Doctrine” encompassing the “5 Whys Technique”. Again rooted in sociology and inspired by children’s natural inclination to ask endless questions, this technique involves asking “Why?” repeatedly (typically 5 times) to drill down to the root cause of a problem. By continuously questioning each identified failure, GCs can move beyond the surface and identify the true, underlying source of unethical behavior. During this procedure, GCs can identify human, structural, procedural, and cultural causes of failure. Finally, proportional investments in the failure can be made to remediate the problem and prevent future incidents.
Let’s look at the following case study: an employee failed to report an operational compliance violation which then led to an expensive product recall.
- Why didn’t the employee report the operational failure?
They feared retaliation from their manager.
- Why did they fear retaliation?
Colleagues had faced negative consequences for speaking up.
- Why did colleagues face consequences?
The company lacks an enforced whistleblower protection policy.
- Why isn’t the policy enforced?
Leadership hasn’t prioritized a safe reporting culture.
- Why hasn’t leadership prioritized this?
There’s a focus on short-term results over long-term compliance and ethics.
The failure to report led to undetected issues, resulting in a costly product recall. Superficial fixes like punishing the employee or additional training on reporting compliance concerns won’t address the deeper issue. To prevent future incidents, the company must first understand the root cause of the misconduct, which in this case would justify enforcing a strong whistleblower policy, promote leadership accountability, and foster a culture of transparency.
Conclusion
Understanding the psychological and social factors that lead good people to misbehave is essential for GCs to manage legal and compliance issues. By addressing the root causes of failures using the “Kids Curiosity Doctrine”, GCs can effectively reduce compliance issues, managing risks and ultimately protecting the organization, while encouraging employees to make ethical decisions.
