Are you ready for the Red or White question?

“Red or White?” asks a Northeastern State Controller.

With a puzzled look on my face, I counter: “What do you mean?”

Smirking a bit, the State’s Chief Accountant responded, “Red wine or White wine?” He proceeds to open the doors behind his desk revealing two large glass bottles hooked up to a vat and a cooking machine.

As a young consultant facing his first ethical situation fraught with negative consequences, I stammer a bit in thinking about how to respond. The commandant of the State Police was next door, right below us was the governor’s office and what the controller was making on state government premises was illegal.

Finally concluding that the State Police and Governor must have known about this “still” and quite likely imbibed themselves, I responded, “Red, of course! Thank you!”

While this incident does not rise to the level of the recent malfeasance at Wells Fargo or other significant corporate scandals, my experiences of consulting to both public and private sector executives indicate that ethical and integrity breaches are equally likely to happen in government, not-for-profit and corporate environments. People are people and no organizational form a priori has a leg up on ensuring integrity and ethics.

Those that would differ with this opinion cite profit-centered, self-interested motivations and corporate greed as factors that inhibit organizational ethical behaviors in for-profit companies. Indeed, I experienced unethical and greedy actions in several corporations. Once in a beer company, a senior executive asked me to change the payroll system to withhold lower taxes from his paycheck. Immediately, I went to the CFO and informed him of both the request and that I would not make the payroll adjustment. Needless to say, when I went back to the senior executive with a negative answer, he did not reach into the refrigerator behind him and offer me a beer!

However, self-interest is also a prime motivator in among public sector executives. For example, there are thousands of cases of crusading prosecutors aiming to try high profile cases to generate name recognition in advance of running for elective office. This well-worn path to political power started early in our history and even rises to the level of the nation’s highest office White House as 19-century presidents Grover Cleveland, and William McKinley began as high profile prosecutors. While prosecutors don’t get rich through their legal work, they can seek power and glory, many times at the expense of incarcerating minorities at much higher rates. Other recent governmental examples include financial regulators who accept favors and employment from those whom they oversee.

So the organizational form does not infer more or less integrity and ethical behaviors. What matters is the organization’s culture as defined by its top leaders. If the senior leadership team ascribes to high levels of ethics and integrity and “walks the talk,” then the organization will exhibit higher standards. However, if that is not the case, then no organizational form will trump human nature and inhibit inappropriate behaviors.

While making contraband wine in a state capitol building might sound like a harmless, benign transgression, it sets a tone at the top that rules can be broken and provides cover for those in the organization to break more consequential rules and behave unethically. After reflection, I do wish my response was, “no, thank you.”

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