Ann Tenbrunsel – University of Notre Dame
In “Policy Solutions to Conflicts of Interests: The Power of Professional Norms”, Sah cleverly exposes two catalysts that feed the acceptance of conflicts of interests: entitlement and invulnerability. Entitlement manifests itself in beliefs that a conflict of interest is tolerable because one is “owed” whatever the benefits that conflict offers—gifts, additional consulting contracts, etc.—as perks of the job and/or payment for sacrifices, such as long hours, that are made. Professionals also believe they are invulnerable to conflicts of interests because of that very professionalism and, yet alarmingly, those who view themselves as more professional are less likely to predict they will be influenced by gifts but are more likely to accept them. Solutions, such as training, sanctions, eliminating the bias and objective second opinions are aptly and appropriately dismissed given evidence that such “answers” often have unintended consequences that worsen rather than improve the situation. Instead, Sah argues that efforts should be focused on activating ethical norms by increasing felt obligations and responsibilities towards advisees and identifying and changing professional norms.
The structural changes Sah proposes are solid, based on substantial evidence demonstrating the power that norms have one one’s behavior. One need only to remember Asch’s famous experiment to be convinced. Similarly, activating concerns for others is also a recommendation that comes with a solid foundation of normative and empirical evidence. Sah’s recommendations thus rest on a firm platform and should be taken seriously.
However, it will be important to disentangle embedded forces at work that underlie the recommendations and, as in all behavioral nudges, identify unintended effects that might result. Sah hints at both professional norms as well as informal norms, “those learned through socialization practices within the institution.” In doing so, she highlights the need to understand the complexity of norms, both in their source—i.e., organizational versus professional—and their formality. While codified, formal norms that are typical of professional norms are important, it is the informal norms within organizations that have been argued to be the most influential aspect of the “ethical infrastructure”. Uncovering these oft-hidden norms that may be working in contrast to formal norms is an essential first step if professional rules and guidelines are going to make a difference.
Caution also needs to be heeded in the recommendation to increase feelings of “obligation and responsibility towards advisees” so that professionals have “concern for their clients.” While it may reduce bias in advice, close relationships also blind one to the unethical behavior of the client, a pattern that is argued to be at the heart of many of the financial and accounting scandals in the last two decades. Structural solutions that diminish this motivated blindness—for example, disassociating auditing from consulting services in the accounting profession—thus need to accompany recommendations that encourage strong ties between advisors and their clients.
Perhaps the biggest obstacle to realizing the benefits of Sah’s recommendation to identify and change professional norms, though, is the unintended impact that such professionalism has on one’s behavior. Sah herself argues that professionalism creates an “illusion of vulnerability” and a belief that one will not be biased when faced with a conflict of interest. The resulting illusions about one’s ethicality may therefore be exacerbated, rather than mitigated, by an enhanced sense of professionalism. While professional norms may be useful in correcting behavior that is seen, it is likely to be ineffective when decision makers exist in such an ethical bubble, incorrectly believing that they are adhering to the espoused norms. Solutions need to address the existence of these damaging illusions and, in doing so, need to reduce reliance on agentic action by the individual, given the faulty beliefs that may proceed that action. Such change needs to consider forces that precede norms, and more specifically, forces that are argued to contribute to ethical fading. Sah’s discussion of the Logic of Appropriateness Theory offers some clues on what those forces may be and how they might be altered. The Logic of Appropriateness Theory rests on the belief that individuals’ determination of the type of decision or situation they are faced with dictates behaviors, norms and expectations of others with different “frames” evoking different behaviors and norms. Most important to this discussion, if ethical considerations don’t characterize the frame through which ones sees the decision, one doesn’t see the ethics in the decision and unethical behavior ensues. Thus, even if strong professional norms exist, if the characterization of the decision doesn’t evoke those norms, they won’t be part of the decision making process. Effectively changing behavior and norms thus may involve a fundamental change in the frame through which the decision is viewed. While research in this space is fairly new, it has been demonstrated that a “business frame” produces more unethical behavior than an “ethical frame”. Sah’s description of a study which demonstrated that the giving of financial versus medical advice increased bias, for example, could be explained by the different frames that these two situations evoked, with a financial situation perhaps being more likely to prompt a business frame than a medical situation. It is thus important to understand relevant frames involved in conflicts of interests, what characterizes such frames and how such frames might differ between the groups Sah identifies—physicians, financial advisors, lawyers and accountants. As a preliminary step, given the noted ethical fading associated with the business frame, it is important be mindful of the “business-tizing” of various industries and the extent to which the resulting frame may fade the professional norms and subsequent ethical considerations of the decision.
Sah demonstrates the importance of understanding the psychological processes that drive individuals to behave unethically and why policies to correct this behavior often fails. She offers insightful recommendations that take these processes and their unintended consequences into account. Equally important is to also recognize the potential dark side of the proposed recommendations so that the resulting behavior is “nudged” in the right direction.