Penn State, Enron, and Effective Policy

What is the purpose of any policy? Well, outside of what’s written into the particular policy statement, the general purpose of every policy is:

  • To reduce, if not eliminate, ambiguity about an issue. For example, as clear as the statement “thou shalt not kill” may seem, it has always begged for clarification (e.g., “What if there’s no other way left to defend myself?”, “What if I was defending someone who couldn’t defend himself, like a paraplegic?”).
  • To ensure consistent, positive behavior and results.
  • To inform employees of standards of expected behavior and consequences of not conforming to those expectations.

So many policies fail to serve these purposes. Why? For one, policies fail because policies are often written in response to a specific problem, to prevent it from recurring, without input from the people who will be affected the most by the policy change.

Not enough thought is given to why the problem might have occurred. (“Well, isn’t it obvious?”, we typically ask one another.) Not so fast, though. To come up with a fair, honest, and fact-based solution or response, we need to identify the root cause, or primary motivator. In a rush to judgment, we go with what seems right rather than search for and give weight to the facts.

The seriousness of the problem, how often it occurs, and the severity of its impact all play into the resolution of the problem, of course. There is no question about it – some problems are so serious and have such a severe impact that they must be addressed with all due speed. Speed doesn’t mean haste, however. A hastily derived solution is always the wrong one.

So is the policy that typically comes in the aftermath – the policy that will “make sure this never happens again.” The nature of some problems is so out of the ordinary that most individuals could not conceive of or understand it. Take the case of the sex abuse charges against former Penn State coach Jerry Sandusky. An anti-sex-abuse policy was already on file at Penn State when the incidents of child abuse are supposed to have occurred – if the charges are true, the existence of a policy appears to have had no effect on the accused.

Another familiar example is Enron. There have been guidelines, policies, and laws telling people not to lie or steal since Hammurabi but did this stop people from setting up shell corporations to hide losses and inflate the company’s worth? Did knowledge of the company code of conduct prevent people from telling their employees to keep investing in the company though they knew Enron was “circling the drain”?

Policies that proscribe unethical or immoral behavior aren’t necessary for the vast majority of us – the rest ignore them. Such policies have no impact on people who are prone to psychopathological behavior – people who are “empathy-deficient”. They’re unable to frame their behaviors in terms of what impact they might have on others.

Most of us have that empathy for others that prevents us from profiting at others’ expense. We don’t need to be told what not to do – we possess that internal compass. Sometimes, those cases arise where it’s not easy to determine the ethical course of action but even in the absence of a written policy, we will consciously avoid inflicting discomfort on others. For the empathy deficient or ethically challenged, write whatever policy you want – it doesn’t pertain to them.

Should we even bother to develop policies, then, since most of us are going to behave appropriately without having to be told? Considering that some people will follow their impulses without regard for rules or consequences to others, what’s the point? To reiterate, well-written policies have always had – and will always have  – three basic purposes:

  • Reduce or eliminate ambiguity;
  • Ensure consistent and positive behavior and results; and
  • Inform people of the consequences of not conforming to policy.
Remember – extreme outliers do not make good policies bad.

* * * * * * *


  1. “12 Angry Men”, MGM Studios, 1957 (USA).
  2. Baron-Cohen, Simon, “The Science of Evil: On Empathy and the Origins of Cruelty”, Basic Books (2011) – ISBN-13 #978-0465023530

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Posted in Business ethics, Leadership, Policy development

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