Thank you for joining us in this course, i'm john Nicholson. In this introductory lesson, we're going to set the ethical table by looking at the current state of trust in today's world. What is ethical to some is unethical to others, is coming up with a singular definition of ethics even possible. You'll find out in this lesson. The Edelman trust barometer is an annual online survey of over 33,000 respondents in 28 countries contains 17 years worth of data and measures the sentiment of two groups the general public and the informed public. So to be considered informed respondents are college educated in the top 25% of annual incomes in the country, and they report significant consumption of media and business news.

The survey measures trust in four key areas, government, business, media, and NGOs or nongovernmental organizations, shockingly corporate not trust in all four areas is at an all time low. There are many highly visible examples where trust lost has had profound results consider Britain's exodus from the European Union. The collapse and reemergence of Wall Street under a government subsidized bailout. The election and prominence of world leaders with more extreme political views and the proliferation of sponsored news and individual opinion, which may be drowning out traditional independent perspectives. On average across all 28 countries surveyed. Only 37% of respondents trust the CEOs in their country, and only 29% trust their governments.

This is a staggering 12% drop from 2016 report. In Japan, only 18% of respondents trust their CEOs, whereas it is still an extremely low 25% here in Canada. Why are these numbers so low? Ongoing corruption and bribery scandals around the world, CEOs get paid thousands of times the average pay of their workers, companies moving profits offshore to avoid taxes. These are just some of the reasons. And the media is also very just trusted.

80% Of countries in the survey don't trust the mainstream media. The emergence of this idea of a person just like me as being much more credible and believable than the mainstream media sources. With that backdrop in mind, let's tackle what ethics means to you. Some years ago, sociologist Raymond Barnhart asked business people that exact question, What does ethics mean to them? These replies might be typical of our own. The meaning of ethics is hard to pin down.

And the views that many people have about ethics are shaky. Many people tend to equate ethics with their feelings but being ethical Clearly not a matter of following one's feelings. A person following his or her feelings may recoil from doing what is right. In fact, feelings frequently deviate from what is ethical. Sometimes the ethical thing is firing someone, or breaking off a relationship, but these things never feel good. Nor should one identify ethics with religion.

Most religions, of course, advocate high ethical standards. Yes, if ethics were confined to religion, that ethics would apply only to religious people. Ethics applies as much to the behavior of the atheist. As to the devout religious person. Religion can set high ethical standards and can provide intense motivations for ethical behavior. ethics, however, cannot be confined to religion, nor is it the same as religion.

Being ethical is also not the same as following the law. The law often incorporates ethical standards to which most citizens subscribe, but laws like feelings can deviate from what is ethical. Think about our own pre Civil War slavery laws, and the old apartheid laws in present day South Africa. These are grotesque, obvious examples of where ethics and the law are not the same thing. Moreover, if ethics we're doing whatever society accepts, then to find out what is ethical, one would have to find out what their society accepts. To decide what I should think about abortion, for example, I would have to take a survey of our society and then conform my beliefs to whatever society accepts.

But no one ever tries to decide an ethical issue by doing a survey. Further, the lack of social consensus on many issues makes it impossible to equate ethics with whatever society accepts. Some people accept abortion, but many others do not. It being ethical, we're doing whatever society accepts, one would have to find an agreement on issues Which does not, in fact exist. What that is, is ethics. A lot of the times people really don't know what it means, but we think of it as two things.

First, ethics refers to well founded standards of right and wrong, that prescribes what humans ought to do, usually in terms of rights obligations, benefits to society, fairness, or specific virtues. ethics, for example, refers to those standards that impose the reasonable obligations to refrain from rape, stealing, murder, assault, slander, and fraud. ethical standards also include those that enjoying virtues of honesty, compassion, and loyalty. And ethical standards include standards relating to rights such as the right to freedom from injury, and the right to privacy, such standards or adequate standards of ethics, because they are supported by consistent and well founded reasons. Secondly, ethics refers to the study and development of one's ethical standards. As mentioned above, feelings, laws and social norms can deviate from what is ethical.

So it is necessary to constantly examine one standards to ensure that they are reasonable and well founded. Ethics also means that the continuous effort of studying our own moral beliefs and our moral conduct and striving to ensure that we and the institutions we help to shape live up to standards that are reasonable and solidly based measuring ethical lapses is difficult to quantify precisely. However, the Association of Certified fraud examiner's publishes a bi annual report looking at the state of occupational fraud. In other words, fraud arising from employee behavior, the fraud experts clock fraud as costing the typical organization 5% of their annual revenue, which is a staggering so mistake that many of our clients find hard to believe at first. But after they spent a few hours with us, it opens their eyes to the magnitude of this risk, and all the things that can go wrong.

On a global basis, occupational fraud is estimated at over $3 trillion, which a fraud where a country would rank it between Japan and Germany on a GDP basis. That's huge. So let's just say that the cost of unethical decision making has a lower threshold of about $3 trillion, and a likely upper threshold of something much more than that. In other words, we've got a really big problem here. We all have a predisposition to believe that anything unethical can't possibly be happening in our house, that our co workers and employees are all honest people and can be trusted to do the right thing. Tell me I'm wrong.

And that's not the thought you had in this very instant. We are All predispose to this belief and as a result tend to ignore ethics in business as a matter of practice. The primary learning objective of this course is to raise awareness so that you pull your head out of the sand and consider the wide reaching implications of ethics in your life in business. It's a matter of importance for you, and everyone in the organization. Understanding the fraud triangle helps you to understand some of the psychology behind unethical decision making. First we're going to look at motivation.

And this relates to the pressure felt by the fraudster. So what's going on in their life that's making them need to commit fraud. Perhaps they have an addiction that they're needing to fund. Perhaps they or a loved one has an illness, and they can't afford to buy medication. Perhaps they're just keeping up with the Joneses and have gotten used to a lavish lifestyle, that it's not funded by the current salary cycle. We're gonna look at rationalization.

And this speaks to the story, the fraudster tells themselves to say that it's okay to commit fraud, for example, it's alone, and I'll pay it back later. And that's often how people start on the slippery slope. I deserve it, I got passed over, or I'm doing the work of two people. Everyone else is doing it. That's a common rationalization as well. And thirdly, let's look at opportunity.

This one is interesting. This is the one element that the organization has the most control over. Opportunity is controlled by the degree to which we pay attention to fraud, and implement a strong system of internal control. However, when broaden to ethics as a whole, it has the same implications. It's against these trends that we begin rebuilding, enhancing, or augmenting our own level of ethical intelligence. In the next lesson, we look Further at defining our ethical intelligence, is it something that is innate?

Or can we train someone to be ethical? Go to the next lesson to find out