The Importance of Integrating Business and Personal Ethics

The integration of your personal code into your daily business practices helps to rebuild public trust in the insurance industry.

March 30, 2016 Photo

It is often noted in ethics articles that there is a difference between business ethics and personal ethics and that personal ethics are stronger than business ethics. In a 1996 study by Kluwer Academic Publishers Group titled “The Ethics of Insurance Professionals: Comparison of Personal Versus Professional Ethics,” the authors concluded:

Insurance professionals are more likely to engage in unethical behavior in order to benefit professionally than in a personal setting. In general, however, the average respondent was “unlikely” or “extremely unlikely” to engage in unethical conduct.

This conclusion is good news and bad news for insurance professionals. It is good news that they are unlikely or extremely unlikely to act unethically based on their responses to a set of hypothetical scenarios. However, it is bad news that insurance professionals are more likely to act unethically if there is a professional benefit to be gained.

Regardless of your position in the insurance industry, you need to lead an integrated ethical life. Making a distinction between business ethics and professional ethics leads to a false sense of security when it comes to our integrity.

Assume for the moment that there is a distinction between business ethics and personal ethics. This would mean that it is possible to make a business decision that goes against your personal values. Does this happen? Absolutely. But, ultimately, the personal discomfort felt because of the business decision will cause the employee to (1) question the business’s ethics, (2) question their own ethics, and (3) start looking for a new employer.

These results may not be felt immediately. As human beings, we have an incredible ability to rationalize our behavior. We may go for years rationalizing business decisions that we personally disagree with, but ultimately, the internal angst we feel will cause us to find employment elsewhere.

It is very important that one’s personal code of ethics meshes with the employer’s code of ethics. If the two do not coincide, the employee and the employer will be in conflict.

Most, if not all, insurance organizations have a code of ethics or a code of professional conduct. In some organizations, the code is both visible and practiced. In others, the code may simply be window dressing, used only as a tool for punishing egregious behavior if caught. Figuring out which type of organization you are contemplating joining may not be easy, but the effort can prevent future ethical conflict. Probing questions should include:

  • Is this organization honest in all communications?
  • Does this organization disclose bad news in a timely manner?
  • Does this organization avoid conflicts of interest?
  • Does this organization support ethical business practices?
  • Does this organization provide employees with up-to-date technical knowledge?

If an organization exhibits positive behaviors in response to these questions, then consider it as a potential employer. Likewise, put yourself under the same ethical scrutiny and see how you measure up by answering these questions:

  • Do you keep the promises you make?
  • Do you explain why a promise cannot be fulfilled?
  • Are you honest in your interactions and communications with others?
  • Do you overstate your knowledge or abilities?
  • Do you avoid conflicts of interest?
  • Do you take responsibility for mistakes and make attempts to correct them?

Reflect on these questions and your answers to them. The fact that these questions arise gives credence to the public’s perception that insurance organizations and those who work for them are a necessary evil and not to be trusted.

In order to rebuild the public’s trust, your personal ethics and your business ethics should be indistinguishable. Your ethical values and your employer’s ethical values should complement each other. If they do not, there will be a lack of personal commitment to the business goals of the organization. In order to recognize this melding of ethical values, you should be cognizant of your personal code of ethics.

Each of us has a personal code of ethics. We may not have taken the time to articulate what the code includes, but we do have one. Spending some time putting a personal code of ethics down on paper is a worthwhile exercise. It can help you see how your ethical values mesh with your employer’s ethical values, and it can help guide you when you are faced with a moral dilemma.

Articulating a personal code of ethics is a fairly easy exercise. Begin by listing four or five core values that you hold most dear—honesty, respect, and fair-mindedness are a few examples. Once you have these core values, put them in priority order. Having to put the values in priority order will cause you to reflect on what you value most. Finally, take your prioritized list of values and put them into actionable sentences showing how you intend to implement each value. For example, you could say, “I aspire to treat all persons with fairness and respect.” Note that this sentence starts with “I aspire.” Most codes of ethics are aspirational in nature. Using the words “I aspire” allows a little forgiveness when we suffer the inevitable lapse.

Once you have your actionable sentences, you can refine your personal code by rearranging or rewriting your sentences. Keep your personal code handy. Review it from time to time and continue to refine it. Use your personal code as a tool to help make ethical decisions.

Above all, use your code as a guide for evaluating your business decisions. The integration of your personal code into your daily business practices will help establish your personal integrity and help rebuild public trust in the insurance industry.   

About The Authors
Donna J. Popow

Donna J. Popow, JD, CPCU, AIC, is president of Donna J. Popow LLC, and has more than 25 years of experience in the property and casualty insurance industry. She has been a CLM Fellow since 2007 and can be reached at (215) 630-0829.

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