Glen Moreno is chairman of Pearson, deputy chairman of the Financial Reporting Council and a director of Fidelity International. Until May 2012 he was deputy chairman and senior independent director of Lloyds Banking Group. Until mid 2009 he was senior independent director of Man Group plc and acting chairman of UKFI. From 1987 to 1991 he was chief executive of Fidelity International. Before that he was a group executive at Citigroup, where he spent 18 years in Europe and Asia. He is a governor of The Ditchley Foundation and a director of the Royal Academy of Dramatic Art. World renowned Pearson PLC’s web site highlights three major business units: education, The Financial Times Group, and the Penguin Group. (See http://www.pearson.com/about-us/pearson-at-a-glance.html. All quotes below from Pearson PLC web site as noted.) Education: “Pearson is the world’s leading education company, providing educational materials, technologies, assessments and related services to teachers and students of all ages. Though we generate approximately 60% of our sales in North America, we operate in more than 70 countries. We publish across the curriculum under a range of respected imprints including Scott Foresman, Prentice Hall, Addison-Wesley, Allyn and Bacon, Benjamin Cummings and Longman. We are also a leading provider of electronic learning programmes and of test development, processing and scoring services to educational institutions, corporations and professional bodies around the world.” (See http://www.pearson.com/about-us/education.html) The Financial Times Group: “The FT Group provides business and financial news, data, comment and analysis, in print and online, to the international business community. FT Publishing includes: the globally-focused Financial Times newspaper and FT.com website; a range of specialist financial magazines and online services; and Mergermarket, which provides proprietary forward-looking insights and intelligence to businesses and financial institutions. The FT Group also has a stake in a number of joint ventures, including those with FTSE International, Vedomosti in Russia, BDFM in South Africa and a 50% stake in The Economist Group.” (See http://www.pearson.com/about-us/business-information.html) The Penguin Group: “Penguin, founded by Allen Lane in 1935, is today one of the world’s leading English language publishers and the most famous brand in the industry. Penguin publishes 4,000 titles every year for readers of all ages. Its extensive range of titles includes top literary prize winners, classics, reference volumes and children’s titles. The iconic Penguin brand is well known all over the world but we also publish under many other imprints, including Hamish Hamilton, Putnam, Berkley, Viking, Dorling Kindersley, Puffin and Ladybird. (See http://www.pearson.com/about-us/consumer-publishing.html)
- What is the most important ethical lesson you have learned (either personally or professionally)?
Ethical failures in the subprime markets exposed problems in bank management and governance, and a wider failure of leadership in the world financial system. Many people in leadership positions realised that behaviours were dangerous and wrong, but failed to act. That led to massive wealth destruction and a very difficult economic and fiscal future.The people most affected are those least capable of protecting themselves– the poor, the elderly and the young. Leadership failure has put the credibility and foundations of our societal model at risk.
- What is the most shocking corporate ethics matter you have seen in the news recently? Non-profit sector? Why?
The misselling of Payment Protection Insurance (PPI) in the UK is an example, in part because of the scale of compensation and its impact on our banking system. It also shows how a failure in ethical leadership can affect a huge number of people. I don’t believe that the vast majority of bank employees in the UK are unethical. They were encouraged in these behaviours by leaders who rewarded them and convinced them they were loyal employees doing the right thing.
3. What do you see as the opportunities for the corporate sector and non-profit sector to collaborate in raising the bar in ethical matters?
They face similar reputational challenges and can learn from each other. The non-profit sector, in particular, has much to offer in defining how all organisations can contribute to a wider social good.
- What are the most effective strategies for mitigating risk of unethical behaviour in your organization?
We all need clear codes of ethics and robust compliance systems. But these must be based in a strong ethical culture that goes beyond the formal compliance with rules. A good corporate culture makes people want to behave ethically. It is intrinsic to what the firm and its people are about. One of my primary roles as chairman is to help create an enduring company. Values, culture and ethics are critical building blocks in achieving that.
- What are your strategies for ensuring ethical policies and standards flow down through all levels of the organizing and to all stakeholders?
One of the most important areas is communications– a function which operates at a strategic level in our company. We need to communicate our culture and values clearly throughout the organisation, so that people understand and embrace the behaviours expected of them. But we need to address other stakeholders as well, and we need to speak with “one voice” to all who rely on our integrity. We also need to be honest– this is not a PR exercise. If we get something wrong, we need to acknowledge that and explain how we’re going to fix it.
- Are there areas you think regulation should be more extensive in regulating corporate ethics? Non-profit sector ethics?
It is certainly right that our laws and regulations should establish a framework for the proper conduct of business, and protection for consumers, employees, and investors. But some regulations have been more effective than others. For example, I believe the US Foreign Corrupt Practices act helped shield companies and individuals from pressure in countries where unethical practices and bribery are common. Another example of good regulation is the UK Governance Code, which encourages best practice while allowing for different circumstances in different companies. Excessive regulation tends to lead to behaviour which is often more legalistic than ethical, and it often leads to unintended consequences.
- Should culture be an important contextual element in ethics analysis? What is unique about the ethical culture and environment in your country that should be taken into consideration?
As individuals, we deal with ethics in a personal way, but in large organisations they are inextricably intertwined with culture. At Pearson, we have tried to create a good company which does good things (improving peoples’ lives through learning). That tends to attract good people. The personalities and behaviour of the CEO and senior management teams are fundamental to creating a culture of sound ethical behaviour.
- Do you think globally applicable ethics principles and practices are possible? Desirable?
I do. Though national cultures very, we all share fundamental understandings of fair behaviour– what’s right and what’s wrong. As we enter new markets, it is particularly important that our ethical values are communicated and embraced. We have, for example, walked away from several investment opportunities in emerging markets where we were uncomfortable with ethical issues.
- What is the biggest mistake people make in making decisions around ethical issues?
NOT making a decision– either not recognising or identifying the issue, or knowing the issue is there but deliberately avoiding it. Some refer to this as “the elephant in the boardroom”. It’s chairman’s responsibility to put those issues and decisions on the table, no matter how difficult or unappealing.
© Copyright 2012 Susan Liautaud & Associates Limited. All rights reserved.