I Am Legend: Richard Matheson And Ethics In Your Compliance Program

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Explore:  Compliance DOJ Ethics FCPA SEC

Richard Matheson died on Sunday. I read his book “I Am Legend” when I was a very young teenager. It was my first real introduction into science fiction and I instantly became a fan of Matheson. It spoke to me about being an outsider and feeling completely out of place, as was the protagonist, who was played by Vincent Price in the 1964 movie version, The Last Man on Earth, by Charlton Heston in 1971 movie version, The Omega Man, and, finally, by Will Smith in the 2007 movie version, I Am Legend. For me, the book more forcefully drove home the ethical dilemma faced by the apparent sole survivor on earth, Robert Neville of an un-named catastrophe. There are others, who have been turned into zombie/vampires. Neville has to dispatch these other survivors while trying to find a cure to the disease which has affected them.

Matheson was also a prolific screenwriter as well, adapting his short story Duel, into Steven Spielberg’s first feature film the 1971's broad-daylight murder-truck nightmare of the same title, which was the highest rated made-for-TV movie of all-time. Matheson also wrote the scripts for several Twilight Zone episodes as well scripts for other television shows ranging from Combat! to The Girl From U.N.C.L.E. to Star Trek.

I thought about Robert Neville’s ethical dilemma and Matheson’s explorations of ethics throughout his career when read an article in the Financial Times (FT) entitled “Is backdating an invoice so very wrong? A school tackles ethics”. In this article, Rebecca Knight reported on a class taught at New York University Stern School of Business by Jonathan Haidt, which “examines ethics through the lens of moral psychology.” Haidt was requested to teach the class by the Dean of the Stern School, Dr. Peter Blair Henry, after Haidt published his book, entitled “The Righteous Mind”, in which he argued that “people make moral decisions based on feelings, not reason” and even went so far to state that “Nobody is ever going to invent an ethics class that makes people behave ethically after they step out of the classroom.”

Perhaps challenged by this pronouncement, Haidt took up the task of designing an ethics class to teach students how to “design more ethical organisations.” One of the ways that Haidt suggests is to focus on “creating an incentives system that rewards long-term success over short-term performance.” This is certainly one of the things that the Department of Justice (DOJ)/Securities and Exchange Commission (SEC) FCPA Guidance discussed in its Ten Hallmarks of an Effective Compliance Program, which said that the “DOJ and SEC recognize that positive incentives can also drive compliant behavior. These incentives can take many forms such as personnel evaluations and promotions, rewards for improving and developing a company’s compliance program, and rewards for ethics and compliance leadership. Some organizations, for example, have made adherence to compliance a significant metric for management’s bonuses so that compliance becomes an integral part of management’s everyday concern. Beyond financial incentives, some companies have highlighted compliance within their organizations by recognizing compliance professionals and internal audit staff. Others have made working in the company’s compliance organization a way to advance an employee’s career.”

Another of Haidt’s insights is that he believes that people tend to believe that they have their own moral compass, that they are “the captain of my own journey. But as a psychologist, I know that is not true.” He says this “not to absolve students of any personal responsibility but to help them develop a greater understanding of their own values and motives.” From this, Haidt teaches students to be aware of social situations which might influence them to act unethically, such as going along with a group’s decision or even completing a boss’s request to backdate invoice so that it appears in the company’s books previous quarter.

But the company also has responsibility in this area as well. One area might be to encourage a ‘Speak Up’ culture. So another Hallmark of an effective compliance program is to include a “mechanism for an organization’s employees and others to report suspected or actual misconduct or violations of the company’s policies on a confidential basis and without fear of retaliation. Companies may employ, for example, anonymous hotlines or ombudsmen.”

Perhaps channeling his inner Richard Matheson, Haidt believes that “his students’ careers are like an epic ‘hero’s journey’ – one in which they will be severely tested and challenged.” Moreover, he tries to instill in his students to “recognize that there are societal forces impinging on them all the time and that in the long run ethical behavior and high professional standards do pay.” Organizations should realize this as well because compliance and ethics is more than simply complying with laws against corruption and bribery such as the Foreign Corrupt Practices Act (FCPA) and UK Bribery Act. By doing business in the right way, companies simply do better from a business perspective.

Topics:  Compliance, DOJ, Ethics, FCPA, SEC

Published In: General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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