“In their own words”…Dilemmas encountered - Behavioural issues
In the following extract from the ICAS research publication “Speak up? Listen up? Whistleblow? In their own words – Insights into the ethical dilemmas of ICAS members” we hear from ICAS members about their real-life experiences of ethical challenges, “In their own words”.
"I felt really uncomfortable. I felt like from the business perspective, I felt like I'd done the wrong thing. From a personal integrity perspective I felt like I'd done the right thing, but it certainly coloured my view of how could I work in an organisation that didn't really operate with any kind of integrity around its financials and any kind of standards in terms of how it expected staff to behave." (Extract from interview with Laura)
4.5 Behavioural issues
Technical issues predominated over behavioural ones in Molyneaux (2008) and ICAS (2009) but behavioural issues were raised frequently by interviewees in the current study. The increasing prominence of behavioural issues accords with recent surveys carried out by Elizabeth’s organisation in the field of business ethics, where the majority of issues being reported were “behavioural, even harassment and things like that”. She felt that such issues served to shine a light on an organisation’s culture because “if people don’t feel that they can challenge behaviour, what does that say about your culture?” This section shows the wide range of issues that were raised by interviewees when asked to talk about ethical dilemmas they had experienced. In other words, the interviewees identified these issues as ethical in nature.
Pressures from clients
Ethan recalled an instance as an audit manager where a client tried to put pressure on him to sign off on some regional development grants. The client firm was experiencing cash flow difficulties and Ethan was asked to meet with the Finance Director on a Saturday morning to discuss the issue. Ethan did not believe that there was sufficient evidence to show that the relevant goods had been purchased so he felt that:
"Pressure was put on me to say ‘look just go and release these grants’. I mean I had a very good partner in this engagement and we discussed it and we said no. We then wrote to internal audit at (firm name deleted) and immediately they then jumped in to see what was happening at (firm name deleted) and there was a fraud pertaining to assets that they were claiming grants on. We didn’t necessarily pick up the fraud, I keep saying that to people, we didn’t pick the fraud up but we didn’t think there was something right."
Max had experienced a conflict of interest situation where pressure was not coming from the client as such but via the client’s architect. Max had set up a company in the early 1980s with some colleagues and remained there until his retirement. He described an occasion when the company was contracted to carry out refurbishment work on local authority housing. A requirement of the contract, as signed off by the architect, was the purchase of a particular make of cleaning kits. These kits were being sold for considerably more than the usual price for such items and Max began to investigate. He found that the company that manufactured the specified kits was actually wholly owned by the architect. His dilemma was that he was told that if the kits were not purchased, this would breach the agreement and the company would not be paid for the refurbishment work it had done. In Max’s words, he thought:
"Somehow, we have to raise this because there is no way we are going to be party to this transaction because I think it is improper. Equally I can’t have a situation where we are left, albeit quite understandably, high and dry for money."
He contacted ICAS, whose assistance he described as “phenomenal” and a way forward was discussed. The architect lost his job, Max’s company was able to fulfil the contract by buying cleaning kits from another supplier at a considerably lower price and “everybody was happy”. He describes his dilemma as:
"So, the ethics were, I could have just shut up, placed the order. We’d have got paid plus our margin on it and no one would have been any the wiser. But it would have been completely unacceptable. And that was it. So, it had a happy ending, but it might not have, for a few days, I was fairly concerned I might not have a business."
Pressures from senior managers
Sometimes things can be said that place people in situations where they feel they are being coerced. Matthew had experienced an uncomfortable situation where he had to respond to circumstances very quickly. He was attending a bank meeting with a director of a company where he was acting temporarily as an assistant to the Chairman. They were to present a cash flow projection to the bank to secure funding and a key figure in the cash flow statement related to a building valued at £2million. As they were walking in, the director said to him:
‘"Matthew, the building’s only going to get £1 million, not £2 million.’ As we were walking in. And I had about 10 seconds to think about what to do. No pressure. They’re all there, all four of them. And I wish I could have got this on YouTube or something because it would have been a lovely sort of stage play for a young Chartered Accountant. I had 10 seconds to think what to do. So, I thought, ‘Right.’ And I said, ‘Yes, good morning gentlemen. Yes, I have, this is the cash flow.’ And it was all passed round. And I said, ‘Now gentlemen, before we all start, I would just like to say there will be lots of assumptions you will be getting into, but there is a property in here, you’ll know the one. And it’s in here at £2 million and I’d just like to say we’ve been getting more up to date information on the market value and it’s looking a bit toppy, at £2 million. And we were really thinking, it might only be £1 million, but you know it’s not very clear and we are going to work hard to get as much as we possibly can for it. But I thought I better be really up front with you straight away, and tell you there’s a really big risk on that two, that it could be a one"
"I didn’t say that I had had it 15 seconds before. And this guy, he was – well you know what he was at – he thought I wouldn’t tell them. And he would have had one over on me actually, …There’s no love lost after that, because he was definitely trying to set me up, I was being set up and he didn’t think I’d do it, and I did."
Matthew also recounted a story from his career where he had felt it was important to keep to his own value basis, so as not to compromise himself. He described a situation when working on an interim assignment where he was going to Los Angeles on a work trip and intended to pay for his wife’s flights himself as these were personal not work expenses. The man he was working for, an ex-partner in an accountancy firm as Matthew recalled, said to him:
"‘Just put your wife’s flight through the business, Matthew’. And it wasn’t his business, you know that’s the sort of thing if he owned it then I suppose that was within his discretion. But he certainly didn’t own it and I said, ‘No, thank you’. And being slightly cynical, quite mature at that time, it did cross my mind that to some extent you might assume it is a generous act, that he would sign it off. But I felt that had I put a foot wrong later on in the organisation, that it would have potentially… You know, if I said, ‘I don’t approve of this’ or ‘I don’t approve of that’, there’d have been a weakness there that could’ve meant I was out the door in five minutes."
In advance of our interview, Edward had noted down some vivid examples of things that had been said to him at a variety of organisations over his career:
"So, when you’re told ‘No one will know’; ‘Everyone else is doing it’; ‘That doesn’t apply’; ‘We’re too small’; ‘There’s pressure to succeed’; ‘We’re competitive’; ‘The competitors are doing it’; ‘We have got to meet budget’; ‘There’s jobs at stake’; ‘Your job’s at stake’; ‘You don’t want to let your family down’; ‘You don’t want to get me fired, do you?’. I’ve had all of those …None of them are made up by the way, they are all real."
The above situations are examples of senior managers trying to put pressure on interviewees. These people did not refer to this as bullying but rather as indicative of the pressures people are under. The dividing line between such actions and bullying is not altogether easy to define, as the next section illustrates.
Laura said that she had never witnessed “bullying in terms of financials” but she had “witnessed bullying in terms of running teams and getting things done”. From a management perspective, in practice, distinguishing bullying from tough, but non-bullying, behaviour can be difficult according to Finlay:
"Where is the difference, where is the line between a tough, demanding, Chief Executive and bullying on a scale which is gross misconduct? Are we just over that line, are we miles over it? Actually are those complainants just so weak and so lazy that they need to get pushed into performing a bit better? So gauging that is actually quite difficult."
Elizabeth agreed that perceptions can vary, with what is regarded as bullying to one person perhaps being regarded as strong management to another:
"What do you do about people who feel they are just being tough managers in a tough time, and now in the current climate they feel that it is unjust that they are being called up as bullies when they feel they are just being fair."
This suggests that bullying may sometimes be a matter of interpretation, dependent upon perspective. However, a number of interviewees reported behaviour that they felt clearly constituted bullying. In Belinda’s case, it was after the event that she characterised it as bullying. She described her work environment in a financial services organisation in the years immediately preceding the financial crisis in 2007 as “brutal” and “aggressive”, with a boss who was “a known tyrant” who “dumped a lot of work on me at the last minute” during a regulatory visit and “they threw loads of staff at me overnight and I had to suddenly manage them all. So, it was very stressful”. This had a negative effect on her health “and it got to the stage where I was having heart palpitations, my arms were going numb, I was having panic attacks”. Reflecting on this in the years since this time, she felt that:
"It was a bullying culture actually now that I reflect on it. And if I’d raised that, I would have been - when I say ‘dismissed’, I don’t mean I would have lost my job - my views would have been dismissed, I am sure of it."
In Jill’s case, she felt at the time that her immediate boss exhibited a pattern of sustained bullying and egregious behaviours. On first meeting him, she did have a different view but that soon changed:
"He was known to be a very strong character. I did know that he scared a lot of people and he had quite an abrupt way with him. I initially thought he was just very determined, kind of liked his own way, and initially I thought he was quite a caring character and he was quite supportive. That was my initial view. When I started working with him I sometimes actually in my mind think about it as, if I was to go in and do an internal audit, what would be an audit risk and he would have been a big red, shining, flashing light. The man had a shredder at the side of his desk and he came into work at 4 in the morning, I made some notes looking back about what concerns I started to have. His behaviours were bullying, they weren’t determined or strong, they were bullying. Very Jekyll and Hyde character."
She went on to recount a variety of behaviours including lying, sending then deleting emails, having meetings with people who would leave his office in tears, favouritism, sexual impropriety with staff and using redundancy as a way to punish staff who he was displeased with. She described the atmosphere as a “culture of fear” and “really, really toxic”, with threats and repeated insidious comments, and shouting. Nothing in her CA qualification or her life had prepared her for such behaviour but she eventually decided to speak up, despite being extremely fearful of the consequences.
Sebastian works for a large accountancy firm where he described the culture as “very much full-on” with a “work hard, play hard” mentality, characterised by “long hours, deadlines, a lot of travel, often at short notice”. He enjoys his work but having become a father around a year ago he is seriously questioning whether he wants to remain there long-term. The first issue that he raised was the enormous demand on his time made by work including working in the evenings and weekends and there was an expectation that “in client-facing roles you have to be available effectively at all times”. This was in an environment where flexible working was being promoted but he felt that although “they have all the policies”, there was a gap between the rhetoric and the reality. This was exacerbated by the “expectation that you will socialise” outside work which he acknowledged built strong relationships but at a price in terms of family life.
The gap between rhetoric and reality was also raised by Diane who had worked with a large accountancy firm for around eight or nine years and said that, in all that time, she had felt largely comfortable with the values of the firm except in one respect. In theory, the firm promoted flexible working but the reality was sometimes different:
"But then if a client was a bit more old-fashioned in that respect I didn’t feel that they kind of pushed the client enough. It was very much if the client wants you there Monday to Friday, 9-6pm then you are expected to be there. Whereas I felt they could have been a bit more challenging of the client in that respect in line with their values. It isn’t a massive ethical dilemma but in terms of putting their value into practice I suppose."
Alan had also trained and then continued to work for a large accountancy firm until recently. He had loved his job and the working environment. In his words:
"I loved it, I really loved it. It was amazing because I worked with brilliant people, I got so many opportunities, and I progressed so fast. Within 4 years there I’m sitting in meetings and presenting to the FD of a FTSE100. That’s amazing - you could go into any other graduate job and you would be 15 years before you got that kind of exposure."
Nonetheless, he described the work pressures as being a form of “abuse”:
"I don’t know what the morals are in saying to somebody ‘well you’re going to be working 70-80 hours through busy season a week when you’re contracted for 35, you’re paid for 35’ and yet this just happens as a matter of course all the time. And I’ve seen it lead to breakdowns, I’ve seen it lead to tears, I’ve seen it lead to people being off work with stress, I’ve seen people physically deteriorate over the course of November to March, I’ve seen them gain weight, I’ve seen them lose weight, I’ve seen them go pale and gaunt and on top of that it just cannot be good for the output that you’re trying to generate, which is a thorough audit of some of the most systemically important and connected and precarious entities in the UK economy and you’ve got some wee guy doing a first cut of the going concern work who has only slept on average three hours a night for the last 2 weeks."
Looking back, he says that during that period he was “a shell of a human being” and finished by saying he was “so much happier and so much healthier now” that he had left for a position in industry.
International and cultural differences
A number of interviewees had experience of either working abroad or dealing with other countries. Daniel described situations where “a lot of businesses seemed to keep two sets of books. There were the ones that told them how the business was going and the ones they gave their accountants”. He said that doing business in some countries was not a level playing field:
"We became very conscious that doing everything by the book meant that you weren’t competing on a level playing field with everybody else. Because if suddenly everybody’s full salary was being declared and you were getting your VAT right and all this sort of thing, it was very hard to, and you weren’t paying inducements to various people and buyers and different things, yeah you were… you struggled. And that definitely seemed to be the case. So, it was quite challenging to be, sort of be, in that situation where what seemed to be normal wasn’t what I’d have been comfortable with. So that was definitely challenging."
He felt that it was vital for anyone considering working abroad to take time to get to know the culture beforehand. Matthew had experienced a similar situation where he had no actual evidence but believed that there were irregularities relating to payments to agents and contractors. These were taking place in a country known for corruption and he said the situation “did cause me quite a lot of worry”. Another matter remarked upon was the tendency of some nationalities to be very polite even when unhappy with something, which could result in misunderstandings. Abigail remembers being told by a colleague while working abroad that “we don’t necessarily vocalise as you would in Britain”. She also remembers raising issues and thinking “You’re not getting it. You don’t seem to be behaving the way I would think you would if I thought you were getting it”. As well as cultural education, she felt that ICAS members should have more psychology training in order to recognise their own personality style and how it changed under stress. She had undertaken such training and said that “it helped because we could apply that to some cultural differences that we had seen”
International differences were also highlighted by Alexander who oversees the speak up helpline at his professional body. He has never received a message from some parts of the world, probably, he speculates, “because people are following other custom or practice or protocol”. International issues manifest in different ways:
"In certain parts of the world actually speaking up against somebody that you work with in terms of an office environment, particularly in that hierarchy, can be taken very badly if it comes out that you are the one who has spoken up, or blown the whistle. That can be quite difficult. Equally in other territories people are quite willing to use it in a sort of slightly manipulative sense to raise grievances, to raise complaints, and sometimes just to cause trouble generally for other people in the organisation."
From a professional body perspective, Rose had also identified international differences:
"The appetite for speak up is much greater in the UK, it’s not so much internationally. Mostly maybe because they’re not quite there yet, there’s not regulatory impetus behind it. Or maybe because there is still a bit of a culture of fear when raising concerns, it’s a scary thing to do and it’s important to acknowledge that."
In a series of extracts from the research hear from ICAS members about the real-life situations they have faced - “In their own words”.
Hear more about the key findings from the author of the research Catriona Paisey, Professor of Accounting, University of Glasgow