Ethics training prevents normal people veering off course

Joachim Klement who is an investment strategist at Liberum and author of the excellent Klement on Investing blog recently published a piece titled "Normalisation of deviance" highlighting some interesting research from University College London. It concluded that if people keep on telling lies, people become desensitised as their amygdala, the part of the brain responsible for activating emotions of fear and shame, becomes less active.

In a separate study conducted by researchers from the Universities of Hamburg, Kiel and Amsterdam that looked at the correlation between lying on a coin toss experiment (participants were asked how may tails that had come up when they tossed a coin) and scientific misconduct by scientists. Seems to suggest that lying has become normalised in those countries (at least amongst the scientists involved in the study). See chart below👇🏾

An important aspect of the experiment was that some of the participants were polled about their roles and about the 'search for truth' - once this was revealed the overreporting of tails pretty much disappeared.

As Joachim points out this highlights why ethics and code of conduct training is so important: "it prevents otherwise honest ‘normal’ people from sliding down the slippery slope towards normalised deviance."

A strong culture of governance throughout an organisation is important to enable the underlying strategy to be delivered in a sustainable way.

Governance starts from the top - at the board level - in setting the culture of the company, but execution throughout the organisation is key.

We recently discussed how a failure of both board and operational governance was pivotal in the Post Office Scandal 👉🏾 https://www.thesustainableinvestor.org.uk/the-post-office-scandal-a-failure-of-operational-governance/

This article featured in What Caught Our Eye, a weekly email featuring stories we found particularly interesting during the week and why. We also give our lateral thought on each one. What Caught our Eye is available to read in full by members.

If you are not a member yet, you can read What Caught Our Eye when it comes out direct in your email inbox plus all of our blogs in full...

Click this link to register 👉🏾 https://www.thesustainableinvestor.org.uk/register/

Please read: important legal stuff.