How companies can do the right thing in a turbulent world.

Meet Alison Taylor

Alison Taylor: Clinical Associate Professor at NYU Stern School of Business and Executive Director of Ethical Systems. Author of Higher Ground: How Business Can Do the Right Thing in a Turbulent World.

Introduction

Welcome to my interview with Alison Taylor. She is the author of a fascinating and insightful book for our times, Higher Ground: The Brave New World of Corporate Integrity in the Age of Anxiety.

In Higher Ground, Alison invites business leaders to fundamentally rethink their approach to ethics and corporate responsibility in a polarized and complex world. Drawing on her extensive experience across various aspects of ethical business, from investigations to sustainability, Alison challenges traditional assumptions and offers a thought-provoking roadmap for navigating the ethical landscape with integrity.

Throughout our conversation, Alison shares eye-opening observations about the current state of corporate ethics and the need for greater alignment between compliance, sustainability, and leadership. She argues that companies should prioritize avoiding harm over taking public stances on divisive issues and emphasizes the importance of matching rhetoric with consistent internal practices.

At the heart of Alison's message is a powerful question: "Where can we ground our ethics and values when society is so divided?"

This question serves as a call to action for business leaders to grapple with the challenge of anchoring corporate values in a way that transcends polarization and enables positive impact.

Join me as we explore Alison's insights on fostering ethical leadership, cultivating psychological safety, and moving beyond outdated notions of corporate responsibility. Her fresh perspective and practical guidance offer a compelling vision for the future of ethical business in turbulent times.

— Bill

Bill Fox, Founder, LeaderONE​ & Forward Thinking Workplaces
​Pioneering Leadership from Within | Unlocking Human and Organizational Potential

Bill: Alison, your new book Higher Ground is generating quite a buzz and sparking important conversations about the role of business in society. Can you share with us what inspired you to write the book and who you hope will read it?

Alison: Sure. So thank you for that great first question. The short answer is that I was asked to write it by Harvard Business Review Press. And the longer answer is that I have spent time in my career working across really all aspects of how we might think about ethical business.

I worked for many years in a profession called corporate investigations. I did pre-transaction due diligence. I investigated fraud, money laundering. I looked at how businesses behave and what we used to call high risk emerging markets. I worked a lot with lawyers, ethics and compliance teams, bankers, and I got a certain view of what corporate ethics and legal risk was like from that experience.

But one thing you discover when you work in investigations is that the facts in the reports that you write are far less important than leadership and culture. So I started asking a lot of questions about leadership, about culture, about how human beings behave in groups. That took me back to university to study organizational psychology. My original masters is in international relations and political science.

And then I moved into the world of corporate sustainability or what is now often called ESG. And that clearly is a different frame, a different approach, a different way of thinking about ethical business. So what do you do about climate change and inclusion and human rights and social and environmental externalities?

I became fascinated by all these disconnects. I became fascinated that the leadership literature and the ethics and compliance literature and the sustainability literature not only don't talk to each other, but many of the ideas don't really make coherent sense across these disciplines.

And so what I wanted to do was to try and write a book for senior leaders. And I also think about the MBA students in my classroom who are interested in these questions, who are wrestling with these questions of the role of business in society and what kind of leaders that they should be. But finding perhaps that there is not a book that isn't deep in the jargon of one or other of these fields. So what I'm really trying to do is provide an accessible discussion to a very, very wonky topic.

Bill: Was there a particular moment or realization that sparked your path on this journey?

Alison: Well, I discuss it in the introduction to the book, but I think that that shift from working in investigations to working in sustainability was really my sort of Alice through the looking glass moment.

I became a little jaded with investigations. I became jaded with the way that the law and ethics and compliance was treated. And I was like, oh, I'll go and work in this other area. I'll see if there's a different way, a different way to approach these questions, to be more ambitious, to think about the role of business in a different way.

And then I was just amazed by how little alignment there was between these ideas. I don't know how deep in this world your listeners are, but for example, materiality and risk do not align very well. Or we haven't really thought through how we need to reimagine governance if sustainability issues are becoming regulated, for example. Or we don't really have a coherent way to think about the role of business versus the role of government.

So I think it was just my professional experiences made me start to ask a lot of questions about the way that we treat these questions and then the gaps I see in how we explore and think about them.

Bill: Your book opened my eyes to how much more complex this has all become. Until you take a closer look at it, you don't really realize it, I think.

Alison: Yeah, I think that's right.

Bill: What did you discover about the current state of business ethics that surprised you the most?

Alison: Oh, I think it was the reaction of corporate ethics specialists. So I did about 200 interviews for this book over the course of 18 months. And that included interviews with people that are really well known in this field, and really well known as corporate ethics experts.

And I was completely amazed, Bill, that I would get on the line with them to do the interview. And over and over again, the first or second thing they would say was, I try at all costs to avoid using that word, the word being ethics. They'd say, people expect you to start singing hymns. They'd say, I try and avoid those kind of judgmental questions.

And so I thought that's fascinating that ethics experts themselves view the word ethics as taboo. And I think we do have this negative reaction to ethics. When I talk to people that are not deep in this world, just ordinary people, and I say, I work around about on questions of business ethics and responsibility, they usually laugh and say something like, isn't that an oxymoron? Or they say, oh, they need all the help they can get.

And so we're in this situation where the public rolls their eyes and has this real gotcha mindset that business can't be trusted. And then the people that are supposed to guide us through these questions would rather we didn't use the word at all. So I also think it's fascinating that we don't even have a word to talk about this topic.

When I was trying to name the book, I was like, well, I can't call it ESG or sustainability or ethics or compliance because I'm or leadership because I'm trying to cover all those topics. So I think it's fascinating that we don't even have the terms. We don't even have the words to discuss the problem that we're trying to unpack here.

Bill: Alison, what have you learned about yourself in the process of exploring these complex ethical questions?

Alison: What have I learned about myself? I've learned that writing a book is really, really hard and really, really isolating and that you really need to go through this kind of deep assessment and analysis every day. So I would again, again, have the experience. I would write well in the morning. I'd spend three or four hours. I feel proud of what I've done. And then I look at it again at 6 p.m. and think it was rubbish and I had to rip it all up.

I think you need to be prepared to think this through. I think you need to be prepared also to sense check what you're thinking. I think one of the most difficult things about writing the book was just this question of what's obvious and what do I need to explain? What is obvious to me because I spent decades working in this world, but would not be obvious to a reader versus what is something that I don't need to walk through because people will genuinely understand that. And so I found that very difficult.

I found that very difficult partly because I'm covering so many worlds where there's a lot of technical jargon. So then what I would do is I would take my half formed ideas and put them on LinkedIn and try and find out a discussion. So I think I discovered also during this process that what you need to do if you're writing a book or trying to move ideas forward, you need to involve a broader community. You need to get reactions in real time. You need to see those reactions so you can understand what's obvious and what's not obvious and to frankly get new ideas and new input.

So this was difficult for me. It felt risky for me to put out my kind of half formed ideas and see how people would react to them. But I think it made the book a lot better. And it was very, very humbling on numerous occasions.

Bill: Yeah, that's an excellent way to approach it. I experienced that over the last four years when I wrote a blog post every week for four years intending to write a book and now I kind of closed it off and going back and I can't believe I wrote some of the things I did. It's a new set of fresh eyes on it.

Alison: Yeah, I mean, but it's fascinating to see how differently people react in different domains and how differently people react to the same information. So yeah, I found that a sort of risky and fraught, but ultimately very rewarding exploration.

Bill: Your book is called Higher Ground. What does the idea of Higher Ground represent when it comes to business ethics?

Alison: Yeah, so I mean, I use this metaphor for a few reasons. The first reason I used it is that Higher Ground is the title of a Stevie Wonder song that came out the year I was born and the lyrics are very, very apt.

The second reason is, we've talked a little bit already about the jargon around responsible business. I felt that we had really become kind of mired in a swamp. I felt that there was a lot of confusion, there was this kind of, we're in this kind of thicket of confusion and misinformation and jargon. And so I wanted to use the metaphor of getting above that and seeing more clearly.

And probably the reason I came up with that metaphor is I love to hike. I live part of the time in the Catskills. I love to be in the mountains. I love to be in the forest with no mobile phone reception. And so I use the metaphor of kind of climbing a mountain and seeing more clearly as a way to describe what I'm doing.

And I also think we have this expectation of companies that they need to be perfect, that they can't get anything wrong. And what we actually just need is for companies to do things a little bit better and to progress. And so I also wanted to counter this idea of perfection and counter it with the idea of progress and hard work and getting to a higher point where you can see more clearly.

Bill: In the book, you suggest that companies should prioritize doing no harm over taking stands on popular social causes. Can you explain your reasoning behind this?

Alison: Yeah, so we've been in this era of corporations speaking up. It really kicked off in around 2018 during the Trump presidency. And there's been a lot of pressure on corporations to take stands on various issues. We can think most obviously about all the CEO statements in the aftermath of George Floyd's murder.

But what I think we've got into is this sense of corporations and corporate leaders speaking up for PR purposes, speaking up because they think that stakeholders will like and trust them more. And it's not always met by concrete action.

So there's very, very often a disconnect between what a company says it cares about and either its internal policies and procedures over a topic like inclusion, and certainly its political spending. So if corporations are speaking up on issues they're actually addressing, that's one thing.

But I think we've almost ended up with the worst of all worlds, where we've got corporations taking very divisive positions, arguably worsening polarization and worsening the divisions in our society and not actually solving the problem either. So we're taking away energy from the political process and we're sort of suggesting corporations can solve problems they're not set up to solve.

And so this has led to a number of consequences. Most corporate leaders I speak to today, I think, are regretting this era of rhetorical overpromising and trying to get back to something a bit more restrained and a bit more focused and aren't quite sure how to do that. And so I tried to provide kind of guidance there, but I think we need to be clear that a lot of the problems corporations have exposed themselves to in terms of activism and in terms of employees pushing them to speak up are very much self-inflicted and were very much encouraged in 2018, 2019.

Bill: Your title, Higher Ground, suggests a kind of spiritual or moral elevation. Do you see a role for spiritual practices or principles in shaping ethical business?

Alison: I think your question is so fascinating because it opens up questions of the degree to which we should expect corporations and expect organizations in general to align with our personal values.

And so, I certainly think there is a role for deeply exploring your personal values, deeply exploring the kind of impact that you want to have on the world, deeply exploring the role that work plays in relation to your other priorities, thinking about the kind of organization that you want to work with or for or form or run. Is it important that it has a mission? Is it important that you make lots of money? Is it important that you lead people? Is it important that you're shaping a field?

So I think you need to think about those questions. And then I think you need to evaluate them within a realistic frame of what a corporation does, what a nonprofit does, what an educational institution does, what a government does, and think about your priorities and how to fit in your values with these wider organizational priorities.

So I don't think it makes a lot of sense to say, "Here are my values, and now I'm going to go and shape an organization and try and get that organization to behave in line with my values." I think you need to think about the reality, which is that different people in society have different values, and then think about your various outlets and your various opportunities for how you might live and express those values.

And so I think it is very valid to say, "We would like organizations to have more explicit values, but I think we also need to be very, very clear that our values are not all the same. And if we're starting to say that a corporation should only act in line with our values, there will be someone else working in that corporation that may have different values and may feel alienated." So we need to go back, I think, to questions of human rights, dignity, and respect, and thinking about how we all have a right to our own values. We do not necessarily have a right to impose our values on people that don't share them.

Bill: It seems many of the ethical challenges companies face today, such as corruption, exploitation, environmental degradation, stem from deeply ingrained patterns of human behavior and thought. Do business leaders have a role to transform these patterns within themselves and the organization?

Alison: They do. I mean, I think when you ask this question, my mind goes in so many places, but let's take a very obvious example, which is that traditional financial accounting does not pay attention to or value negative externalities. So we can say, "Those negative externalities aren't my problem, and we're going to stick to traditional financial accounting."

Or we can say, "Huh, the way that corporations create value is changing, partly because the public is much more aware of those negative externalities and those public effect perceptions are informing corporate value." So maybe we need to think differently, for example, about how we value human labor. Maybe we need to stop treating human labor as a cost. Maybe we need to think about how investing and valuing people and treating them with dignity and respect is an asset to our organization.

So I very much take the point that corporate leaders are constrained by the same structural forces as everybody else, but I think there's also a time to recognize that when our old systems, our structures, our ideas, our assumptions are no longer fit for purpose and to play a role in re-imagining them. That is a conversation we all need to be having, but I certainly think corporate leaders aren't immune from it.

Bill: If you were to identify one core limiting belief or assumption you think business leaders need to break free from to reach higher ground ethically, what would it be?

Alison: I mean, there are so many. One would be that not breaking the law is a good anchor for corporate ethics. So you certainly can't base ideas of values and ethics on legal risk anymore.

Another one I think is to get over the idea that having a good business is just a case of removing the bad apples or the bad people. If we get rid of, investigate and fire the bad people, we'll automatically have a good corporation. It is not as simple as that.

I have 12 or 13 myths in my chapter two that I talk about and encourage leaders to rethink, but those are a couple of the obvious ones.

Bill: What do you think of the 20% of ethical initiatives or practices that tend to deliver 80% of the positive impact of value for companies?

Alison: I think it is important to teach employees to observe principles rather than roles. I think it's very important to teach employees to use their judgment and to know where to go to ask questions. And I think the encouragement of voice and psychological safety and mechanisms to ensure that you are not penalized or retaliated against for speaking up and sharing your views are very, very important.

I think we're having a leadership crisis and I think that no matter how personally impressive you should not be making judgment calls in isolation. So ultimately I think we need to rethink corporate ethics as a matter of collective decision-making.

Bill: In your experience with working with companies around the world, have you observed a connection between the level of consciousness or awareness of business leaders and the ethical performance of their organizations?

Alison: I think that is a very good observation. There is really interesting evidence showing that CEO job descriptions have changed over the last 15 years. It used to be that we were looking for a leader with technical skills. To be a CEO, you needed to be a former CFO. You needed a certain sort of profile and a certain level of experience.

Now job descriptions show that we're looking more for social skills and understanding of sustainability and ability to build networks and drive influence, to bring people along with you, to express the idea we're all in it together. So, yeah, I think there is an imperative to rethink leadership. The leaders that do understand that their judgment is not perfect, that do seek a wider set of stakeholder input and voices in making decisions, are going to be more successful in this more intangible and divided world.

Bill: Have you any inspiring examples to share of companies breaking free from limiting norms and achieving exceptional ethical performance?

Alison: I share some examples in my book, but I think it is important to be clear up front that no business gets everything right. I'm very often asked to name good companies or poster children or companies I think are doing a good job. And I dislike the question because I actually think part of our issue as a society is that we're seeking to divide companies into good companies and bad companies.

A company isn't a person with a personality like that. A company is a system in which structures and pressures and norms and power are all interacting in very complicated ways. So I would partly answer that question by saying nobody gets everything right.

But I use the example of Chobani. It's a private company, but it's focused on the US food system, hires refugees, including in very red parts of the country where it has not suffered backlash, and gives employees an ownership stake. So it is a good example of a company that while far from perfect, I think is really trying to lay out a coherent path forward and think through its influence on the world.

Bill: What is the most important piece of advice you'd give to business leaders who want to build more ethical organizations in today's world?

Alison: I think be focused and restrained about the problems you claim that you can take on and make sure that your rhetoric and your internal policies and procedures and your political spending are all aligned.

Bill: If you could distill the core message or insight of your book into a single question that every business leader should be asking themselves, what might that be?

Alison: Where can we ground our ethics and values when society is so divided?

I love that. That's a great question. I didn't think we'd get through all these questions in an hour, Alison, but now we've run right through them.

My last question was... I try and get to the point quickly. I can certainly answer more, but to me, this was a focused and good discussion.

Bill: How can people learn more or get in touch with you?

Alison: I'm very easy to find on LinkedIn, Alison Taylor, NYU. There's one "l" in the Alison. You can also go to my website, which is alicentaylor.co. Again, one "l" in the Alison.

Bill: Very good. Thank you very much, Alison. I really appreciate your time today and taking the time to answer these questions.

Alison: I love talking to you, Bill, and thank you so much for your time as well.