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.
L. Head, Ph.D.
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.
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.
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.
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
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
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.
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.
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
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).
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:
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.
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