If you are a consumer of factual information, your head is probably spinning from the fast-paced discussions about what constitutes real news versus fake news. Not being a journalist, I’ll leave questions about a reporter’s obligations to the media industry’s standard-setters. That said, I can and do vote with my dollars. If I sense that an article or broadcast reflects shoddy research, I turn the channel, cancel my subscription or both. According to “Americans’ Trust in Mass Media Sinks to New Low,” Gallup analysts say that only 3 out of 10 people “have a great deal or fair amount of trust in the media.” It does not take a rocket scientist to surmise that executives must be wringing their hands as they fight to keep a fickle audience.
Like many, I apply the same stay or flee litmus test to authors who are known to plagiarize. My book editor tells me that part of the problem has to do with the reality that ghost writers, when used, may be relying on their client to ensure that attribution is properly in place. When I authored my first book, I spent a small fortune in money and time to secure permissions from about three hundred sources. She and I agree it’s sloppy to poach. Even more pernicious is that readers and original content creators are cheated and of course there is the moral issue. Reputation is a precious thing. Once it’s tarnished, it takes a tremendous amount of work to cure suspicions of future foul play.
Business leaders are wise to worry about a consumer’s ability to shop elsewhere when it is believed that a bad act occurred. Recent research from market intelligence company Mintel is telling:
- “56 percent of US consumers stop buying from companies they believe are unethical”;
- “[O]ver one third (35 percent) of consumers stop buying from brands they perceive as unethical even if there is no substitute available …”; and
- “27 percent stop purchasing even if they think the competitor offers lower quality.”
While lots of companies seek to differentiate themselves on the basis of good ethics, there is no guarantee they will attract new clients and retain existing ones. There are reasons for this disconnect. Applied to the investment management industry, some asset owners have said they are unwilling to pay extra for safeguards. They believe that risk mitigation should already be part of the service an asset manager, bank or consultant offers. In other situations, institutional buyers don’t acknowledge the value of a best practice versus an okay practice. For example, a money management firm that is fast to terminate employees who violate personal trading codes may not necessarily win business over a firm that tracks personal trading violations but gives employees a second chance.
I maintain that an organization should always strive to manage risk as best it can and then take a bow by communicating its carefulness to clients. Beyond that, leaders who understand the link between ethics and shareholder wealth (or some other value metric) should want to see their competitors play nice. Even if a business is doing everything right in terms of integrity, compliance and risk oversight, its future growth could be limited by what its peers do or don’t do. As one of my favorite poets John Donne observed, “No man is an island” and so it is with companies, non-profits and governments in terms of overall trust in that sector.