‘Behaviour is the mirror in which everyone shows their image’ – Johann Wolfgang von Goethe

‘Things so obvious that they go without saying in their own day simply disappear…so that the differences between the work [the historian sees] and the world he does not see, cannot be checked off by noting changes in the detail, but in the framework [and that] is not something you can set out to look for; if you stumble upon it because disturbed by incongruities when working within the framework, you must resign yourself to being a heretic’. – SFC Milsom (one of the foremost thinkers of legal history)

HAVE WE ALL FORGOTTEN HOW TO BEHAVE?

 

As the Prime Minister appeared awkwardly and embarrassingly before the Liaison Committee this afternoon, I formed an impression that the PM conceded and accepted that behaviour had been overlooked and unchecked within the Government.  In these trying times of economic instability, political unrest, and war looming, it is important to re-calibrate our moral compasses and remind ourselves of behaviour, because behaviour unchecked at the head of any organization, and not held accountable in the absence of transparency, very much dictates the culture of an organization/institution.  As the adage states: ‘A fish always rots from the head down’.

 

I postulate that there has been a change in the framework of modern society brought about by a sudden evolution of globalization, social media, information overload of mundane and meaningless information and a general ‘dumming down’, focusing upon extreme emotions and sensationalism, and popularity, ignoring the importance of face-to-face social interaction and above all ignoring a traditional system of morals and ethics ingrained in the rule of manners and of etiquette, and that we are in a pickle, so to speak.

 

The Nolan Principles:  The seven principles of public life:

• Selflessness
• Integrity
• Objectivity
• Accountability
• Openness
• Honesty
• Leadership

I remind the reader of Professor Robert Klitgaard’s explanation (not a theory) of corruption.

C = M + D – A

That is to say:

 

[My square brackets added, postulating that the Nolan Principles be adopted in the explanatory formula]

 

Corruption EQUALS Monopoly [to make a decision] PLUS Discretion [in choosing with integrity, objectively, honestly, selflessly to make a decision] MINUS Accountability [which must necessarily include openness/transparency].

 

The Nolan Principles ought to be inextricably linked in the fight against corruption and adopted in Acts of Parliament to duties of directors, and in the professions. 

 

A rule book of how to behave, perhaps should appear as a practice direction within all professions of standards expected of professionals. Most certainly some of these Nolan principles ought to be positively adopted in the approach to duties, but it is not always spelled out.

 

In approaching duties of directors, an application of the Nolan principles is perhaps presumed within a framework of behaviour and the approach a director must have in fulfilling duties.  What of us, who have forgotten how to behave? What is good and bad behaviour in any culture? Within the sub-culture and environment of a business/institution?

 

There are seven statutory duties of a company director within the Companies Act 2006 at sections 171 to 177.

The Nolan principles can be applied to the Statutory duties of the Companies Act.  I leave the reader to decide which Nolan principle applies, simply to exaggerate the point that without a constant check as to how one should behave, and expect behaviour of others, lines become blurred and culture within a business/institution falter:

 

Companies Act:	Nolan Principles:
Duty to act within the powers of the company’s constitution
Duty to promote the success of the company which includes at s172(1)(e) the desirability of the company maintaining a reputation for high standards of business conduct
Duty to exercise independent judgment
Duty to exercise reasonable care, skill, and diligence
Duty to avoid conflicts of interest
Duty not to accept benefits from third parties
Duty to declare interest in proposed transaction or arrangement

 

Maintaining standards of acceptable behaviour readily includes self-checking, questioning, being reminded of those standards, and calling out standards of unacceptable behaviour.  By not doing so, standards fall, and the rights and wrongs of behaviour become blurred and eventually forgotten.

 

 

 

 

 

Professor David Rosen is a solicitor-advocate and principal of David Rosen & Co.  He is a Certified Fraud Examiner, a member of the ACFE Advisory Council, a member of RUSI, and a former strategic director  of the Board of the ACFE UK Chapter.  He is a Professor of Professional Practice at Brunel University where he lectures one day a week and is soon to commence a course on morals, ethics, scruples, and quandaries: MESAQ