by Skip Moen, PhD

Compliance is now a no-option legislated requirement. The risks associated with non-compliance are so enormous, and the penalties so severe, that only an alien could ignore these rules. With the potential expansion of Sarbanes-Oxley and ever more stringent AML protocols, everyone in the industry has scrutiny on the brain.

The goal behind all this legislative enforcement is ethical behavior. Compliance attempts to enforce time-honored principles such as honesty, fair practice, truthful representation, honoring clients, respect for rights of persons and property, and protection from harm. There’s nothing new here. The only reason that these commonsense values require modern legislation is not because we don’t know they are right or important. We all know it. The problem is that some of us don’t do it. And the result of the malfeasance of a few has perpetrated complications for the lives of many.

Unfortunately, compliance doesn’t work. Compliance can’t ensure ethical behavior. In this environment, one person is all it takes to bring down the whole house. What good is compliance if it doesn’t eliminate the risk? It might meet the legal requirements but it won’t protect you from the person who thinks he can get away with it anyway. Compliance only affects those who didn’t need the lesson in the first place. The people who think they can break the rules and win won’t pay any attention to the penalties.

With that said, the manager faces a dilemma. Legislated ethics is really not ethics at all. It is policing. And it only works when someone is watching. The assumption behind all forms of compliance legislation is that the risk of getting caught will outweigh the temptation to circumvent the rule. The truth is darker. Someone will always think that he is smarter, quicker or slicker. Someone will always think that he can still get away with it. In today’s environment, everyone is at risk over the decisions of that single individual. If my subordinate is guilty, the new rules drag me into the guilt. And by the time the press is finished, my innocence means nothing. It is forgotten, along with my reputation, in the headlines of another scandal.

What is really required is not legislation but transformation. Only those who embrace ethical behavior as a matter of personal commitment can be trusted with the mantel of the firm. Anyone else, no matter what his title or position, puts everyone else at risk. It is plain insanity to think that anyone commits a violation of client expectation and trust while believing he will be caught. The violator never thinks he will be found out. So, no amount of legislated penalties can actually prevent violations because the penalties do not apply to those who are not caught. As long as I think I won’t be caught, I’ll do whatever I want in the dark. Real prevention requires a change in heart motivation, not a change in head knowledge. Add all the rules you like. It won’t make any difference until I decide the rules are right for me.

Most of us will say, “But I have strong ethical values. I do what’s right.” Of course you do. You’re not the problem. Your colleague is. Think of your business like a supplier of radar detectors. The sale of the product depends on unethical behavior. The only reason a person buys a radar detector is to break the speed limit without being caught. If people drove according to the law, radar detectors would not exist.

The real question of compliance is this: What processes and products in your business foster unethical behavior? Wherever those possibilities exist, people will create radar detectors to prevent being caught. It might be as simple as sales goals set too high or executive privileges built on favoritism. Wherever the possibility exists for gain by cutting corners, radar detectors will be used. Do you think that people buy Ferraris in order to drive 55 mph?

This is why ethical training and ethics statements ultimately have no effect. They may meet the governmental standards of practice, but they will not change the behavior when the lights are out. The real determination of our actual rules for living is measured by what we do when we are convinced that no one will find out. The truth of that statement needs no further proof than a modest self-examination. What do you do when you’re sure no one will catch you? It’s behavior in the dark that really matters.

The solution to this dilemma is not simple. But there is a simple technique that starts us toward a solution. That technique is to align the firm with a “cosmic agenda.” By adopting an agenda bigger than personal gain and shareholder return, the firm places its priorities on a vision larger than itself. When that vision creates action, the required commitments and the inevitable returns become the seedbed of personal transformation. Stay with something long enough and it changes you. The agenda must be worthwhile, significant and transformational. It must take us out of ourselves. It must align us with a higher good.

Nothing will alter the deepest values of people more than the adoption of a cosmic agenda in the service of others. Hollywood, in spite of its self-absorbed personality cult, understands this principle. There are countless movies that demonstrate the truth that commitment to a cause bigger than myself changes me. This is an element designed into the human persona. The only real issue for the manager is this: What kind of transformational values do I want to bring about?

Some suggestions

Consider the value impact on firm members if they participated in rebuilding someone else’s life. Two or three hours a week spent at a job training school, a pregnancy crisis center or a fatherless boys outreach reinforces powerful trust and faithfulness values.

Imagine what your sales behaviors would be like if the team spent three hours a week at a crisis clinic, a day-care center or an after-school program. Honesty and respect are natural by-products.

Think about the changes that would occur if management and executive staff spent several hours a week in a prison ministry, at a food bank or at a homeless shelter. Do you think the values of self-sacrifice and humility would be enhanced?

Don’t say, “It would never work.” Don’t dismiss the idea as too time-consuming. The best business advice of many super-successful men and women backs up this technique. Collins, Peters, Blanchard, Maxwell and other business gurus proclaim the power of relational capital spent recklessly. Life doesn’t take on significance until we invest ourselves in others. And when we do, the values that motivate us are altered. Good to great transformation begins with personal values alteration. Anything less guarantees failure.

A few words of caution

1. Vision beyond self

The firm, and all its members, needs to find the vision beyond itself. It doesn’t have to be the same for everyone, but it has to affect everyone and involve everyone. The president is not exempt. Neither is the receptionist. Values are ubiquitous. If the risk of one mistake affects everyone, then the involvement of everyone in a cosmic agenda is just as necessary.

2. Leadership without greed

True leadership is not driven by greed, even if your work environment might be telling you differently. Leaders do not conform to the norm or do just enough to get by without scars. They rise up to facilitate transformation in seismic proportion.

3. Relational ROI

Being compliant does not necessarily mean you are doing the right thing in the eyes of others inside and outside your organization. You are only fooling yourself if you think following the rules is the only measure of true relational ROI. Relationships are not about rules. They are about trust. Rules and trust are not interchangeable concepts.

Forget compliance. Lead differently. Instead of developing new creative ways for your firm to stay off the SEC’s radar screen, take steps to move others toward personal transformation. Then you can throw away those radar detectors.

Skip Moen, author, speaker and consultant, provides clients with reflective insight into business practice assumptions and practical solutions to human resources issues. He has a PhD in philosophy from Oxford and has recently published a book on daily leadership. He lives in the Orlando area. You can contact Mr. Moen at or 407-469-2496