When the morale account is full

Time and again, board members/company owners ask me why compliance violations continue to occur in their company despite all the compliance training. A current case, which is currently occupying me in a coaching session, relates to an automotive supplier's previously very successful sales director, who committed a compliance offence during the Corona period, which is now presenting the company with legal problems. The director had previously been highly regarded - a "workhorse" - 70-hour weeks was the norm. That's the background I initially shared with my client:

In my book "Balancing Act Compliance," I took a close look at the causes of non-compliant behaviour. Dan Ariely is one of the world's leading scientists in this field, having conducted numerous studies on the subject of "fraud and dishonesty." His central question was, "Where does deceptive behaviour have its roots?" He had discovered his interest in the subject a few months after the collapse of the Enron energy company in 2001. The fundamental cause of Enron's downfall was that everyone from the board of directors to consultants, including the now-bankrupt accounting firm Arthur Andersen, had systematically turned a blind eye to fraudulent schemes. In a conversation with a consultant, Dan Ariely learned that the consultant was certain that he had not noticed any of the fraud. When the matter was then uncovered, the consultant could hardly believe that he had systematically blanked out the obvious developments for a long time.

However, anyone who believes that this example of the systematic suppression of criminal activities in the Enron case is already the tip of the iceberg is mistaken. Because it is not uncommon for us to take completely irrational shortcuts when our will is exhausted due to a high density of decisions - as the following example impressively demonstrates:

Northeastern USA. About 10:00 p.m. The governor is surfing the Internet after a hard day's work. He lands on the page of an international escort service for the highest demands by chance or not. The club promises, "It is our goal to make your life more peaceful, balanced, beautiful and meaningful." To fulfil the wishes, the club presents photos of pretty young women who are available to him at any time for joint leisure activities in exchange for an agency fee. The governor has a choice: leave the website and office and go home, or take up one of the offers.

What do you think his decision was?

No, we're not talking about some random or even fictional politician here: we're talking about Eliot Spitzer, the former governor of New York. When he ran for office in 2006, the intelligent lawyer had already made it to the position of the attorney general and ultimately won the election for governor with the highest percentage in the state's history. A hopeful, then, whom his voters and supporters also trusted with the presidency - he would have become the first Jewish president of the United States.

The paradox of what happened next: Eliot Spitzer himself always appeared as a declared opponent of Internet prostitution; he broke up pimping rings and called those responsible to account, which earned him sympathy points, especially from women's and human rights activists. And then this: During a stay in Washington, he orders a young woman to his hotel room as "Client 9.

His supporters were not the only ones to ask: Why would a politician who is celebrated as a clean-cut man - and who is also a husband and father - make such a self-destructive decision?

"Moral licensing" is the keyword.

In his case, too, the reason is to be found in the neurophysiologically induced decision fatigue. It can affect anyone, from politicians to managers, from ordinary executives to board members, regardless of gender, social status or professional responsibility. After all, behind every compliance offence, there is also a conscious decision that has a psychological background, among other things.

"Moral licensing" is the keyword here. Behind this is the psychological phenomenon that every person has a kind of "moral account". It is mentally paid into when good deeds are performed and withdrawn when bad ones are. In this way, according to an inner balance, one can buy oneself free of feelings of guilt since the deeds balance each other out. Only when the account is no longer balanced or falls below zero, one gets feelings of guilt.

The subconscious manages moral licensing. Top managers who lost their grip at some point and then caused compliance scandals were often subject to this phenomenon. As a result, they often do not really show any sense of guilt because, in their innermost being, they do not feel any wrongdoing at all. Eliot Spitzer probably had a similar experience. In his capacity as governor, he took such intensive action against prostitution that he was convinced that he could quietly take a few liberties as a private citizen. If one takes the moral-licensing approach, one could say that the prosecutor ended up in the arms of a prostitute, not despite, but precisely because he himself had contributed so vehemently to curbing such immoral behaviour. His morality account was, in his perception, topped up.

Even if, as in the case of Spitzer, the paradox behind this can be clearly seen, and such behaviour is judged to be out of character, it is a fact that moral licensing is an unconscious process that is actually accompanied in some cases by a certain loss of reality. Today's career paths favour such a loss of reality. Many top managers still go through a selection process that reinforces their belief that they are the greatest. 60-hour weeks and more than lead to a situation where the moral account is - felt - full to the brim. After all, one "sacrifices one's life" for the company and the (personal) success.

In the case of my current client, this insight led him to revise the existing compliance training in his company with a focus on people and their psyche. Up to now, the training was - as in most companies - purely formal. The psychological background did not take place. However, the focus of compliance violations is always on people and not on form. And this is despite the fact that the fascinating psychological phenomena are, on somewhat more intensive reflection, all too well known to most entrepreneurs and managers from their everyday professional practice.

The text is largely taken from the book "Balanceakt Compliance", Dorette Segschneider and Dr. Kathrin Niewiarra, FAZbuch, 2016.

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