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Understanding the Importance of Ethics

Michael Daigneault and Jennie Boden

Nov 28, 2017

Principled leadership is a vital part of any cooperative’s DNA.

For many years, my focus was on ethics – particularly organizational ethics. As an undergraduate at Georgetown University, I majored in philosophy and minored in psychology.  My father thought it was imprudent to follow such a course of study, but I persisted.  As such, I studied many of history’s greatest ethicists.  


I went on to law school, immersing myself in the study of law and justice.  My favorite class was…yes, legal ethics.  (Many of my law school colleagues were convinced something was seriously wrong with me at this point.)  I then decided to double down and became the first person to receive a Masters in Law from Georgetown University Law Center with a concentration in Legal Ethics and Professional Responsibility.  


I went on to found a consulting practice called “Ethics, Inc.” and then served as President of the Ethics Resource Center – the nation’s oldest, independent ethics center.  I even had a license plate for my car that read “Ethics 1.” It’s safe to say, ethics was a really big part of my personal and professional life!


And then…my central focus shifted.


Over the course of my early career, I witnessed ethical lapses in both for-profit and nonprofit organizations that were attributed (by their senior leadership) to the actions or decisions of a “rogue employee” or “bad person” in their midst. Occasionally this was the case, but often it wasn’t the whole story.


In helping many institutions in their quest to address the difficult ethical questions or situations that confronted them, I came to realize that many of their so-called “ethical challenges” were actually – at their root – issues of governance.  As a result, in 2012 I️ and my wife, Alessandra, created a new limited liability low-profit firm dedicated to the public good firm – Quantum Governance, L3C – that reflects a substantially broader governance and leadership focus.  (And yes, I also have a new license plate – which now reads “QNTM GOV.”)


“A fish rots from the head down.” It’s a cliché, yes, but it’s a cliché because it’s repeated so often; and it’s repeated so often because it’s so often true.  What I have continually observed over the years is a failure of genuine leadership at the Board or senior management level.  These failings frequently resulted in organizational cultures that ignored (or even encouraged) unethical or unprincipled decisions.  


The likely causes were as varied as the organizations I came into contact with…a lack of clarity around tradition-bound leadership roles and responsibilities…too much authority in just a few individual’s hands…lip service by leaders to an ideal – and then actions to the contrary…the absence of proper boundaries…a lack of transparency and – yes – sometimes a systemic failure by leadership to set forth the ethical standards (and then clearly communicate, model and reinforce them) that are a vital part of a sustainable organization’s DNA.


To govern is to steer, direct and influence or persuade from a position of authority. It includes at the very least both the Board and the Management team, and it addresses both their formal (directional and policy setting) and their informal (influence and persuasion) forms of authority. Ultimately, governance deals with the legitimate distribution of authority throughout a system – whether a country, corporation or nonprofit.


As such, does governance include ethics? Yes! But just because you’re getting your “governance house in order” doesn’t necessarily mean that you’re paying sufficient attention to your ethics culture, standards and practices and that you’re regularly working to instill them throughout your credit union. At Quantum Governance, we are ever-mindful that there are a lot of things resting on the shoulders of today’s volunteer and staff-led credit union leadership, but we are growing more convinced that a first-in-class ethics program should be among them.

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