Expert Commentary

Where Our Ethics Come From

Almost every individual—excluding perhaps those insane persons who have no sense of right and wrong, but certainly including everyone from religious leaders to gangsters and serial killers—has a set of ethics. Somewhere within this range, perhaps scattered throughout it, fall individual risk management and insurance professionals.


March 2006

Each individual's set of ethics provides the fundamental principles or beliefs by which that person distinguishes, consciously after some thought or unconsciously and seemingly by instinct, between morally acceptable and morally unacceptable behavior in that person's eyes. If every person's ethics sprang from the same principles or rested on the same source documents—perhaps the Bible or the Koran for ethical principles governing their personal lives, and the Uniform Commercial Code or a global code of business ethics promulgated by the United Nations—then there would be much wider consensus on what is ethically good and ethically bad conduct in any given specific situation. In fact, however, each person draws portions, sometimes bits and pieces, of their personal and business ethics from an almost random variety of sources, such as their childhood upbringing, a dramatic or otherwise pivotal life experience, religious beliefs, discussions with family, colleagues, and friends, and the ethical teachings of whatever philosophers the person may have read.

This commentary surveys—unfortunately but necessarily very briefly—each of these types of sources of ethics. This commentary aims to help each of us (1) better understand why we sometimes disagree with others' ethical choices, or they with ours, and (2) catalogue the sources on which each of us can draw if we want to enhance our own ethical skills in particular areas or give others ethical guidance without appearing to scold or to lecture.

Our survey of the ethical landscape is quite general—hopefully relevant to all, not specifically targeted to the many ethical challenges that often confront insurance or risk management practitioners. For an excellent discussion of ethics that is directly focused on principles and issues that are most pertinent to insurance and risk management, I heartily recommend a course developed by IRMI, Ethics Considerations for Property and Casualty Insurance Professionals. This is a nuts-and-bolts guide to developing an ethical code and making ethical decisions.

Sources of Ethical Development

Now let's consider the range of sources from which we each as individuals draw at least some of the principles and rules that, for each of us, underlie our standards of right and wrong behavior. When surveying the range of possible sources of ethical guidance, each with its own principles or its own way of stating highly similar principles, we should not be surprised that we frequently face ethical differences with our fellow professionals and fellow human beings. Giving some thought to where others may have learned their ethics and the ethical resources available for redirecting their (or perhaps our own) thinking should help resolve some of these differences constructively.

Childhood Upbringing

Without really thinking or even being able to avoid it, each person learns ethics from his or her parents—what they teach in words and perhaps more importantly through their actions. These teachings shape our most fundamental attitudes about what is "right" and what is "wrong." As a very brief insurance-related example, the child of an insurance agent, upon reaching adulthood, is much more likely to be honest and truthful in settling claims under his or her insurance policies than is the grown child of another insurance agent if the other agent was terminated by the insurer under disputed circumstances. The child may not have understood the intricacies of those circumstances at the time, but as an adult, he or she is likely to believe in their heart that insurers are not to be to be trusted and do not deserve to be treated honestly.

Later Life Experiences

Similarly, a life-shaping event later in life may more directly and consciously shape a person's ethics. Thus, someone severely injured in an automobile accident may have a much higher opinion of the entire automobile-injury reparations system—including the police who investigated, the hospital that provided care, the lawyers and courts that resolved any legal issues, and the insurers that helped finance so much of the injured person's recovery—if that person is satisfied with the ultimate medical and financial result months and years after the accident. If, however, this victim feels the result was medically inferior or legally unfair, the victim may well treat everyone in the system unfairly—even years later in circumstances unrelated to the original accident—just to seek some measure of personal "justice."

Religious Beliefs

Virtually all the world's religions teach an essentially similar code of ethics that emphasizes honesty, respect for others and their rights, and selflessness. Therefore, in both business and personal situations, a highly religious person is likely to act in ways that most of us will regard as highly ethical. Their religion will give them highly explicit, generally internally consistent, guides to "good" personal conduct. These guidelines usually can be broadened to apply quite well to business activity. Moreover, those for whom religion is not a central force in their lives are more likely to act in self-centered, ethically questionable ways.

Codes of Ethics

Perhaps the most direct and explicit sources of our daily ethical guidance are codes of ethics for business conduct. Whether issued by professional societies (such as the Risk and Insurance Management Society, the Society of Chartered Property and Casualty Underwriters, or the American Society of Safety Engineers), by a business or fraternal society (such as an insurance agents' association or the Lions or Elks), or by civic groups (such as local or national chambers or commerce), these ethical codes generally have two goals. The first is to set forth objectives like quality output, honesty, and public service in the customer or community dealings by the people who are governed by, or choose to subscribe to, a particular code. The second typical goal is to protect those to whom the code applies from harmful conduct by others governed by that particular code—conduct such as unfair competition or actions that that cast the entire group in a bad light. This second goal often is expressed through rather specific rules about what those governed by the code definitely must, or must not, do in their dealings with customers, one another, and the public at large. These self-protective rules can sometimes appear to conflict with religious, philosophical, or other sources of ethical guidance.

Discussions with Others

Almost daily, quite casually, and sometimes without thinking, virtually all of us talk about others' and our own actions—offering frequent opinions about whether what they or we have been doing is good, right, and sensible (or perhaps very much the opposite). Buried in this "small talk," "chit chat," gossip, and mealtime conversations are implicit—sometimes very explicit—ethical judgments about the behavior being discussed. People and their words and actions are labeled "wonderful," "mean," "greedy," "generous," or hundreds of other qualities. Over time, these discussions lead each of us to a sense of what the people around us consider to be good and bad, ethical and unethical, conduct. Unless we have strong personal reasons or other commitments to believe otherwise, most of us tend to "go along" with the opinions of those around us, rather than "bucking the tide" by independently evaluating the ethical aspects of others' actions. Thus, often almost automatically, the social consensus can become the approved, although unexamined, ethical standard.

Ethical Philosophers

In sharp contrast to these ethics of casual social consensus, the philosophers who have developed systems of ethics—such people as Plato, Aristotle, Kant, Bentham, and more recent ethical thinkers throughout the world—have developed basic principles from which they have derived systems of ethics. These principles fall into two general groups: those that are rules-based and those that are results-based.

Examples of rule-based ethics appear in the Bible's Ten Commandments, in many professions' codes of ethics, and in the Golden Rule: Do unto others as you would have others do unto you. Results-based systems of ethics emphasize principles such as physicians never knowingly doing or allowing medical harm; doing the greatest good for the greatest number of people (Bentham and other utilitarians), and Kant's principle of universality—taking an action only if everyone could take the same action without bringing about more harm than good and without creating logical impossibilities (like the logical impossibility of every person being more generous to every other person than anyone is to the first person).

Ethical Dilemmas

A final source of ethical insight (more a way of developing one's ethical awareness and sensibilities than a separate source of ethical guidance) is pondering ethical dilemmas. These dilemmas are real or imagined situations that pit two or more ethical principles, rules, or objectives against one another. To resolve the dilemma, one has to decide which of these ethically desirable ends is the more/most important or, alternatively, if there is a way to achieve both/all of these ends without committing some other ethical wrong.

For example, if you are an adult and your father, convicted as a murderer, has escaped a federal prison in California to hide in your Missouri house, how do you respond when an FBI agent standing in your yard asks "Is your father in your house now?" Assuming he is, "Yes" breaks the commandment to honor one's parents, but "No" breaks the commandment to tell the truth in all morally significant situations. (When your spouse asks if she/he is especially beautiful/handsome as you are leaving you house to go to a friend's birthday party, your response probably is not ethically significant for the community, but it may be very significant within your marriage.)

Ethical dilemmas can provide good settings for exploring ethical questions. For example in the case of your escaped father hiding in your house, is your response to the FBI agent influenced by the fact that:

  1. You know from your direct personal knowledge that your father did not commit the murder of which he was wrongly convicted?
  2. Your father seriously abused you, your brother, and your sister physically when you were young children?

This sample ethical dilemma does not involve the ethics of being a good risk management professional—I readily acknowledge that. But our objective here has been to explore the general sources of ethics and of ethical enlightenment. In future Commentaries—as in at least one past Commentary—we will consider some dilemmas that come straight out of risk management and insurance and that illustrate clashes of ethics that arise from a variety of the basic sources of ethics that we have just surveyed.


Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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