leadership in business organized by the BB&T Center for Ethical Business Leadership within

the Mike Cottrell College of Business at the University of North Georgia. I'm Latasha Brinson,

your moderator today. I'm the Marietta Site Lead for Lockheed Martin Aeronautics Company.

I'd like to welcome our distinguished panelists to include Mr. Chuck Gallagher, Chief Operating

Officer, American Funeral Financial and President of the Ethics Resource Group. Welcome.

Great to be here, absolutely wonderful and I look forward to participating in this distinguished

panel. Ok, Dr. Mary Gentile, Creator and Author of

Giving Voice to Values and Senior Researcher of Babson College, Welcome.

Thank you, Natasha. I'm really happy to be here and especially happy to have a chance

to talk with the five of us. Ok, wonderful. Mr. Joel Manby, President & Chief

Executive Officer, Herschend Family Entertainment, Welcome.

Well thank you Natasha. It's great to be here. I also look forward it have had a chance to

meet all of these great and very smart individuals already, so I look forward to it.

Ok, Dr. Bruce Weinstein, The Ethics Guy and author, most recently of the book Ethical

Intelligence, welcome and thanks for being here.

I have to say I feel really humbled to be in this company so thank you for including

me. Thank you all for being here and I think we're

going to go ahead and get started with our first question, so Mr. Gallagher, what does

ethics mean to you? Well, every choice in life that we make has

a consequence, so making choices that create positive consequences, that create the life

that we want to live, the life that we want, we're proud of. To me is that core foundation

of what really ethics is. I think I would say to the group, ethics isn't necessarily

black or white. It isn't set in stone. It's making the right choice based on all the facts

and circumstances and realizing consciously that those choices we make have consequences

that live with us now and certainly into the future. So, does ethics matter and what is

ethics? I think it starts with that. I think that was quite eloquent. One of the

things that I like to say about ethics is that we often talk about it as if its around

a set of requirements, thou shalt nots if you will. And I really like to think about

ethics more as having to do with something that is more aspirational. I think we're more

likely to behave in ways that we are all going to be comfortable with and proud of but if

we go back to the core and think about what is important to me? What do I value and is

there a way that I can make sure that I act in a way consistently throughout all of the

areas of my life to live up to those values. I think of it more as what I can do as opposed

to what I can't do. I think that's such a great point and our

company has used ethics as a foundation to make a great culture and because it's a great

place to work, we attract the best people. We have very low turnover and it's because

we use it as a positive thing not something that's what not to do. I think that's a great

and eloquent way to do it. It really does attract the best people, especially with today's

generation coming out of college. They want companies that care about the environment,

about treating people well, about caring for those that have less. I just think that it's

exciting for the future. There's too much negative about business in the press out there.

There are a lot of great companies and I think a focus on ethics can help even more companies

get to where they need to be. So, it not only helps with attraction but

with retention. With retention but it's also just the right

thing to do and it makes society a better place.

So here's the thing. Ethics is important, the practice of ethics is important. What

I've discovered in the 25 years I've been teaching is that the term is such a turnoff

that if you don't reel people in with the right marketing if you will or right packaging,

people won't even get to get in the game, so to speak. So, I've been de-emphasizing

the word ethics in my writing and my speaking and lately I've been using the term honor,

honorable behavior much more and I'll tell you why. We're here at the Military College

of Georgia and a friend of mine from Annapolis at the Naval Academy that ethics was taught

there but they almost never used the word ethics and instead they use the word honor

to appeal more to the military ethos and talking with folks over the last couple of years I've

decided I'm not going to talk about ethics, ethical / moral behavior but rather behavior

that has integrity; behavior that is honorable; it's the same thing. It's just how it's presented

to the world. Excellent point. One of the things Bruce in doing that that

I think is really important, Mary, you touched on it as well, is so often we find in many

companies the ethics and compliance rule. People have to go through these snoozer programs

that talk about well here are the rules. Well the rules are one thing but what motivates

human behavior and if I'm motivated by honor cause that's the ethos, now I have a reason

to follow the rules other than someone in HR and compliance saying well here are the

rules and we have to do this because we're required to.

If it's based on something in your heart and soul that's honor or truth then the rules

don't matter as much because it's always easy to find a loophole or possible to find a loophole.

And in fact what was Joe Paterno's first offense? He said I did not break the law by not reporting

this more aggressively. He's right, he didn't break the law. But the question is was that

honorable conduct? Was it the right thing to do? And I think we all agree that it was

not. At Lockheed we have a saying do what's right

because it's right and we encourage our employees to do what's right when no one's looking.

And to give them the freedom to talk about what's right because it's not always black

and white. It's sometimes it's gray and very complex and but to have leadership that's

willing to talk about it and dialogue about it and help people get to the right answer,

I think is really critical and that's what great leadership does, what all of us are

very focused on. What is that our managers, our employers, our team leaders and even our

senior leaders can do and I would say that one of the first things you can do is kind

of what you were referring to, Joel, is this idea of inviting your senior leaders to tell

what I call a "learning story." This is not a success story. This is not an I did the

right thing, I'm a hero kind of story. When people hear those stories, often they'll think,

that's great, but I couldn't do that. He can do that, she can do that, but I.... Instead,

what we do is work with the leaders to think of a situation where they were actually challenged

and where they had to work through how to get the right thing done and then to share

that learning story -- how they worked through it. What happens then, is that you both signal

that you're not just giving the headline of "do the right thing." You're serious. You're

signaling that even the leaders are struggling with this. You're signaling that the leaders

are willing to have this conversation in an open way, which speaks volumes for credibility,

and you're actually teaching a few lessons along the way. They're learning how you worked

through it. What I like about what you said is that it starts from the top, and then of

course in your company, starts at the CEO level. I'm often asked how can a company create

an ethical culture? It's a necessary condition that the leader of the company be on board.

It's not sufficient, because you have to get everyone else on board, but if the leader's

a crook or isn't committed to ethics, what's the incentive to create an ethical culture?

It's interesting, that one though. I always have a little trouble with that, because I

think in the absence of countervailing pressure, or countervailing messages, people often will

assume the worst. I had a conversation - a dinner - with the CEO, the CFO, and the COO

and the major strategy person for a public utility about 6 months ago, and they were

talking about how the employees always assumed the worst of them, the employees assumed that

they don't care about these things, and they do care about these things, and therefore,

the employees made unethical choices because they're assuming that the boss doesn't care.

They were turning to me and saying, but Mary, I do care. I was saying, it's not enough to

care. You actually have to communicate that you care. Maybe you're not doing anything

unethical, but in the absence of the actual assertion of that, people are afraid to assume

the best because they're afraid to be made fools of. They're afraid to be made vulnerable.

I think if you are in a leadership position, you have a responsibility to make that visible.

They may be concerned with that, but I would put forth that they have the responsibility.

If you're going to be a senior leader, you have to be willing to be vulnerable, and I

think Bruce's point is it's challenging. As the CEO, I feel a pressure - a constant pressure

of everything I do and say and how I act and behave is being viewed. It's a message whether

I take a certain type of transportation. All those issues. Everything. But I have to be

willing to be transparent and share my failures and I'm very transparent, because I have a

ton of them, but I think you made a really good point about transparency, but I also

think the leader does have to be transparent and put themselves out there. If I may, Joel,

you referred to failures that you've had and that you've shared with the company. Would

you be willing to talk about something and how that affected the company and the employees

for the better? Sure. I've done it often, I mean we've all made a lot of mistakes and

I do think it's important to be transparent. I remember one time one of our executives

who failed in one of our businesses wanted to quit. I sat him down and said, look, I

have been through a company that almost went bankrupt, had to be sold, but I learned more

in that failure than I did in five years of success in another situation. I gave him the

confidence to go back. i also share a lot about my own personal life whether it's marital

issues, or issues with our children to show that we are all human. We all struggle. We

all have ethical issues we have to deal with. I think it's really important to be transparent.

So transparency and tone at the top. Excellent. Dr. Gentile, I'd like to start with you for

our second question. As business experts, do you feel we should be focusing on teaching

ethics in business more within our business schools? Tell me why or why not. Well given

that my career has been focused primarily in the field of business education, it would

be sad if I didn't think it was important to do what I am doing, which is in fact addressing

the issues and values of leadership in business, but to be quite candid with you, if business

schools continue to teach ethics the way they have been teaching it, then I would answer

no. I don't think it's really helpful the way that we have been teaching business ethics.

What I'm trying to do with my work is to suggest an entirely different way of approaching the

issue. I always tell people it's about asking a different question. Traditionally when we

talk about business ethics in business schools, and my work has been primarily at the MBA

level, we'll share some thorny ethical case study and ask them, what's the right thing

to do in this situation? The students will spend 90 minutes, and they'll discuss what

the right thing to do is, and they may learn some philosophy along the way. It may teach

them about utilitarianism, but I think the best indictment of this approach is a little

story I'll share. It's very brief. When I was doing research for my work, a lot of people

said, Mary, you should go interview this guy. He's a CEO/entrepreneur with his own consumer

product firm. Very successful and based in the US. Privately held. He's thought a lot

about ethics in business. So I went to interview the guy, and he said, I want to ask you some

questions Mary. He said, I want to ask you some questions about business school. He said,

I'm concerned about how you teach ethics in business schools. I was interviewing an MBA

from one of the top US business schools recently, and in my interview with him, I asked him,

did you take a business ethics class? He said, well yeah, I was required. So the CEO said,

well what did you learn? And he said, well, I learned all the models of ethical reasoning:

utilitarianism, deontonoloy, virtue-based ethics, and then I learned that whenever you

encounter a values conflict, you decide what you want to do and then you select the model

of ethical reasoning that will best support which one to do. Now, this CEO was telling

me this story with a wry smile; he was kind of yanking my chain, because I was the ethics

lady, but there's a certain amount of truth to this. In fact, these models of ethical

reasoning are not designed to tell you what the right thing to do is. They, by definition,

conflict. The whole idea is that they help you think more rigorously about something

from different perspectives and see what you might miss. They don't tell you what's right,

and then even more importantly, once you decide what's right, they certainly don't tell you

how to get it done. It started to occur to me that what we needed to do was to ask a

different question. Instead of asking, what's the right thing to do, we should ask, once

you know what's right, how do you get it done in a business environment effectively? If

you ask that question, then a whole bunch of different things fall out of that. You

start looking for positive examples of folks at every level of the organization, CEOs certainly,

but others as well who have found ways to act effectively. You look at what are the

tools and strategies and literal scripts that they've used. What are the kinds of rationalization

and reasons and objections that they always encounter and how could they respond to those?

You set up a peer-coaching kind of experience. That's really what I've been trying to do

is to encourage people to teach ethics in that way. If you teach it in that way, you

don't even have to teach it in an ethics class. The beauty of that approach is that then you