Are corporate cheats using our Greed is Good Grid to decide how to blindside risk management systems? What's happening to ethical leadership and positive Risk Culture?

1. Risk & Reward and the Greed is Good Grid
Gordon Gekko from the 1980s movie Wall Street would be proud of the enormous numbers of
people globally in public and private sector organisations now who act on his mantra “Greed is
good”.
In this blog we’re providing the Greed is Good Grid because these people must be using
something like this grid to evaluate their best options. But we’re also asking the question “what
the hell happened to ethics?”
The Greed is Good Mob
Mitsubishi Motors is just the latest in a long line, with the share price being savagely slashed,
after admitting it has been manipulating fuel economy testing methods and contravening
Japanese regulations for 25 years.
Among the latest admissions to the Greed is Good mob in Australia are Colgate-Palmolive and
four cement companies – Cement Australia Pty Ltd, Cement Australia Queensland Pty Ltd,
Pozzolanic Enterprises Pty Ltd, and Pozzolanic Industries Pty Ltd.

2. Colgate-Palmolive has been ordered to pay penalties of $18 million for cartel conduct by
colluding with competitors and a major supermarket chain to limit the supply and control the
price of laundry detergents. The regulator has an ongoing action against those competitors and
the supermarket chain.
The four cement companies have also been ordered to pay more than $18 million in penalties for
colluding to prevent competition in the market for flyash, a by-product of burning coal, which
can be used in making concrete.
This type of collusive behaviour has been banned by legislation in Australia since 1974, with the
provisions and penalties regularly publicised, so the executives or managers involved can’t claim
ignorance of the law. Collusion in Australia requires a very conscious decision to break the law.
As well as these, there have been regular reports of staff at various levels in banks, insurers,
government organisations, financial planners, retail franchises, wealth management companies,
stockbrokers, educational institutions, construction companies, developers and others all finding
ways to blindside the system for personal or corporate gain.
We almost forgot to mention Political parties doing their own form of money laundering to
disguise donations from banned sources.
What the hell happened to ethics?
These grubby scandals keep oozing into the public domain, seemingly every week somewhere in
the world. What the hell happened to the idea of the importance of leaders acting ethically?
Is ethical leadership just a concept for academic debate, without meaning in the real
world? Ethical conduct sure seems in short supply in financial services, judging by the results of
a 2015 joint survey by the University of Notre Dame and law firm Labaton Sucharow.
They surveyed 1200 professionals in the financial services sector in the USA and UK, ranging
from young professionals to senior executives. The survey aimed to measure workplace ethics in
this sector
Despite much tougher regulatory regimes introduced since the GFC of 2008 and swingeing fines
and penalties, ethical behaviour looks like a Swiss cheese. Here are some of the holes found by
the survey –
• 47% of respondents find it likely that their competitors have engaged in unethical or
illegal activity in order to gain an edge in the market. This figure jumps to 51% for
individuals earning $500,000 or more per year.

3. • More than one-third (34%) of those earning $500,000 or more annually have witnessed or
have first-hand knowledge of wrongdoing in the workplace.
• Nearly one in five respondents feel financial services professionals must at least
sometimes engage in illegal or unethical activity to be successful.
• 25% would likely use non-public information to make a guaranteed $10 million if there
was no chance of getting arrested for insider trading.
The only thing stopping one in every four of these people from acting illegally to make $10
million is not the desire to act ethically but the fear of being caught.
Greed is Good Grid
Here’s our Greed is Good Grid. The Gordon Gekkos of the world must be using something like
this to evaluate their options.
Doesn’t a social licence require ethical behaviour?
Many organisations and commentators talk about the importance of having a social licence, or
approval from the community and stakeholders, to operate.

4. When unethical behaviour comes under public scrutiny that surely damages an organisation’s
social licence. We’re not talking here about the occasional rotten apple but about more
widespread and repeated unethical behaviour.
So let’s ditch the Greed is Good Grid and commit to ethical behaviour.
We think ethical behaviour requires leaders at all levels to think about two
simple, but related, questions –
• What is the right thing to do?
• Will this be fair to all stakeholders?
We’d love to know what you think so please leave a comment.
Please take a few seconds to share this because sharing ideas helps all of us to improve
performance.
About the Authors
John Dawson & Carmel McDonald are the co-owners of Dawson McDonald
Consulting. They’ve been running Risk Culture Assessments since 2008 to help clients
understand the strengths and weaknesses of their culture in managing risk, and how to strengthen
it to protect their organisation and build resilience. They can be reached at
info@riskculture.com.au
In 2015 they published a book BUILD Your Business. Risk Managers will also find this helpful
in communicating their message effectively
To get your copy of this book, or to download a free sample chapter, click here