Philippine Tax Academy

Integrity Education Program

Course # 1: Ethics,
Integrity, and
Compliance
Values as Foundation of Public Ethics and Integrity

19 May 2020 Department of Finance | Philippine Tax Academy® 1

PERSONAL VALUE AS FOUNDATION OF
ETHICS AND INTEGRITY

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Outline
• Definition of Terms
• Importance of Integrity
• Utilitarianism
• Values and Virtue Ethics
• Factors Shaping Values
• Scenarios
• Conclusion
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 What is your understanding
of the following:
• Ethics
• Integrity
• Values
 Ethics
• Ethics is understood to be a study of human
customs or ways of doing things.
• Moral values, rules or standards governing the
conduct of a particular group, profession or culture.
• It pertains to the rightness or wrongness in human
behavior.
 Integrity
• the quality of being honest and having strong
moral principles that you refuse to change
• an unimpaired condition; the quality of being
whole and complete
 Importance of Integrity
• Key characteristic in potential employees
• Core value in the conduct of business
Common Phrases in MV statements
“We combine integrity with excellence…”
“We act with integrity in all we do.”
“We hold honesty and integrity as our
guiding principles.”
“We are proud of the integrity, sincerity and
transparency our employees demonstrate
every day.”
 Is Integrity…
• Required? Yes
• Important? Yes
• Automatic? No
• Easy? No
2 Reasons for Lack of Integrity*
1. Innate human ability to rationalize
behavior
2. Everyone defines integrity differently

*Ashkenas (2011) Why Integrity is Never Easy. Harvard Business Review

 Utilitarianism
• Ethical theory focusing on the results or
consequences of our actions, and treats intentions
as irrelevant
• Observed that human beings are governed by two
sovereign masters: pain and pleasure
• The basis of morality should be to maximize
pleasure and minimize pain
 Utilitarianism
• Has been used to justify ethically unjust actions
(i.e. smoking in the Czech Republic)
Case of Smoking in Czech Republic
• Practiced through cost-benefit analysis ($ = utility)

• Premature demise of smokers saves Czech government

$147M net gain on health care, pensions, and housing
or $1227 per that die from smoking related deaths
 Utilitarian Culture
• Can be seen in movies, TV, social media
• Can be heard in the lyrics of songs
• Can be read in books, stories, and comics
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There has to be a BETTER way

Strengthening our core values

 Personal Values
• Things we believe are important in the way we live
and work
• Determine our priorities
• Affect our actions
 Core Values
• Define what is right and wrong
• Measures used to tell if your life is turning out the
way you want it to
 Values in the Workplace
• Qualities that are appreciated for contributing to or
constituting what is good, right, beautiful, or
worthy of praise and admiration
• Contained in Ethical Codes of Conduct
 Values in the Workplace
• People tend to choose workplaces that line up with
their values
• People bring their personal/core values to the
workplace
• Unaligned personal values and workplace values
(inauthenticity) lead to more dishonest behavior *

*Kouchiki (2019). Why authentic workplaces are more ethical. Harvard Business Review
 Working on our Values
• Need for a different Ethical Theory, namely, Virtue
Ethics
 Virtue Ethics
• Focuses not on the moral status of rules or actions
but on the moral status of persons and on the
individual moral character
 Virtue Ethics
• Ethical goodness is assessed in terms of function;
• Anything that is judged to be good is judged so
because it successfully performs its function
What’s their Function?
 Function of a Person
• possessed by all (or most persons)
• not possessed by other things

Ability to use reason

 Rationality
• the ability to use reason and to make important
decisions through the use of reason instead of just
according to instinct and emotions
 How are we to act?
• Virtues are habits that are in the middle between
two extremes of deficiency and excess
• Doctrine of the mean

Vice Virtue Vice

Deficiency Excess
What would you do in the following
situations?
 Developing Personal Values
• Constant Training
• Consistent Environment
 Core Values of Public Administrators*
• Accountability
• Impartiality
• Justice & Fairness
• Avoiding doing harm
• Do good

*Lewis and Gilman (2012)

 Core Value Clusters (for Public
Administrators)
• Impartiality
• Openness
• Integrity
• Legality
• Loyalty
 Core Value Clusters (for Public
Administrators)
• Equal Treatment
• Reliability
• Service
• Professionalism

*Rothstein and Sorak (2017)

Factors Shaping Values

Source: https://www.ibe.org.uk/userassets/reports/ibe_ethics_and_compliance_handbook_south_africa_2017.pdf
 Factors Shaping Values
1. SOCIETAL VALUES
• shared by members of a community that defines
shared identity of a specific community
• might evolve over time and change as societies
and their economies are integrated in a globalized
world.
• sometimes expressed in laws and regulations.
 Factors Shaping Values
2. PROFESSIONAL VALUES
• defined by a professional group
• determine the standards of behavior that members
need to live up in order to fulfil the purpose of their
profession effectively, e.g., lawyers, accountants.
 Factors Shaping Values
3. ORGANIZATIONAL OR CORPORATE VALUES
• those that an organization expects its employees to
apply when they carry out their jobs.
• Can be explicitly stated or implied by most
organizations operate on a set of core value (explicit or
not).
• combination of strategic, work and ethical values from
the code of ethics and conduct and related policies.
 Factors Shaping Values
4. PERSONAL VALUES
• principles and beliefs that are important in the life
of an individual and guide people in the choices
they make, both in the workplace and outside.
• influenced by a number of factors and they might
vary considerably from person to person within the
same organization
 Scenario # 1
• Company A is struggling financially. Management
has recovery plans in place but would require
sacrifices from everyone.
• Are you going to disclose this to the employees?
 Scenario # 2
• You overhear two co-workers talking about another
co-worker’s inability to complete tasks –
questioning this employee’s work ethic and
knowledge.
• What would you do if you were the one who over-
heard?
 Scenario # 3
• The payroll team of an organization identifies that
certain staff haven’t been paid correctly according
to recent laws.
• What would you do in this scenario?
Whales vs Sardines
 Whales
• Length of one airplane
• 150,000 kg
• Usually in small herds
• Needs a large body of
water to turn
• Takes a long time to turn

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 Sardines
• Less than 15 cm in length
• Around 130 grams
• Moves in large schools
• Requires only a small space to
turn
• Only requires critical mass to
turn the school of sardines
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 Conclusion
• Integrity starts with one’s personal values
• Changing workplace values is not impossible (We
are not whales!)
• There needs to be a critical mass moving in a
different direction
Thank You!
 References
• Kouchiki (2019). Why authentic workplaces are more ethical. Harvard
Business Review
• Rothstein and Sorak (2017). Ethical Codes for the Public Administration: A
Comparative Study. University of Gothenburg
• Lewis and Gilman (2012). The Ethics Challenge in Public Service: A
Problem-Solving Guide, 3rd Edition
• Rowan and Zinaich (2003). Ethics for the Professions
• https://www.philstar.com/headlines/2018/05/01/1811110/survey-bribery-
corruption-thrives-private-sector
• https://news.abs-cbn.com/news/08/15/19/p700-billion-lost-yearly-due-to-
corruption-says-official
• https://www.wsj.com/articles/SB995230746855683470