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I immediately sanity checked this with three examples. SBF fit amusingly well. His fraud had all of these, with Effective Altruism providing an extreme example
by btilly 3y ago
I immediately sanity checked this with three examples.
SBF fit amusingly well. His fraud had all of these, with Effective Altruism providing an extreme example of how goodness in some areas atones for evil in others.
Stanford's president Marc Tessier-Lavigne resigned after his reputation was found to be based on fraudulent research. Descriptions that I've read from those in his lab showed most of these.
Enron is too canonical an example to ignore. Yes, it had all of these.
- hackernewds 3y agoWells Fargo misses most. So does HSBC
- btilly 3y agoI don't know enough about what happened inside of those to evaluate.
- HumblyTossed 3y agoThey're banks, so the assumption is lack of ethics.
- LegibleCrimson 3y agoThey appear to from the outside. Most of the examples of ethical collapse that I'm aware of weren't entirely clear until after the organization collapsed and the dirty laundry went public. A lot of these would either be actively suppressed or they'd only be clear to people who are inside the organization.
- lmm 3y agoHSBC did everything right and still gets crucified for it. Whether your system can distinguish between Wells Fargo and HSBC is actually a pretty good test case.
- lordnacho 3y agoSBF could not have been a generation older than his reports. They'd be 10 years old.
- not2b 3y agoSo, 6 out of 7 then.
- btilly 3y agoNo, he was not a generation older. But he managed to still create a persona that was bigger than life.
- bumby 3y agoI think ' a generation older' is really just a proxy to explain the social dynamic of "subordinates are unwilling to question the authority of the CEO"
- renegade-otter 3y agoSeniority can be only a part of it. A CEO who is extremely wealthy and who is an actual celebrity does not like being told "no" to. It only gets worse with time - as they begin to think they are uniquely brilliant (and funny).
- deleted 3y ago[deleted]
- outworlder 3y agoThere's a very, very prominent example of that today. Let that sink in.
- legitster 3y agoI think it's more that he staffed his entire company with young, ambitious, and inexperienced people.
- LegibleCrimson 3y ago
- legitster 3y agoIf you want an even better example look at Steve Jobs.
- notahacker 3y agoI think the sanity checking works better the other way round: how much of this is just corporate norms that apply to most companies above a certain size, including ones with no particularly significant ethical challenges? One of the bullet points starts off by pointing out that 47% of companies have one type of conflict of interest! CEO being higher profile and a generation older than [some of] the people sounds like a pretty normal company tbh, and probably only a major issue if the ethical issues are caused by the CEO (it technically doesn't apply to SBF, although his reports were even less experienced and in awe of him) CSR and diversity initiatives and other corporate do-good messaging? Most companies do that to some extent, and it's not like the ones who don't even attempt to launder their reputations tend to be squeaky clean rather than too cynical to even try to look like they care. And sure, KPIs and stretchy sales targets can definitely cause bad behaviour and lying, but they're also extremely common, and can be beneficial when companies actually get them right.
- finite_depth 3y ago[dead]
- whatshisface 3y agoI am not sure if that is an objection because "50% of companies are involved in one or more ethical violations," sounds plausible.
- suoduandao3 3y agoI don't think "Purchase or sell insider services" necessarily means a conflict of interest, insiders could be winning the bidding process honestly as well.
- paulryanrogers 3y agoInsiders are usually disqualified from bidding because of an inherent conflict of interest.
- notahacker 3y ago
- geepytee 3y agoTo be fair, so many fast growing startups would tick multiple of their 7 boxes. Have you sanity checked it the other way (false positive)?
- neltnerb 3y agoThey don't define "ethical collapse" in terms of the company failing to make money. I imagine a fast growing startup could behave unethically without anyone really noticing (or at least saying anything) for a while.
- gen220 3y agoUber was on the cusp on a bunch of these (numbers pressure, fear/silence, big CEO, innovation, goodness atoning for evil). I think fear/silence tilting + strong governance forced Kalanick out and saved the company. WeWork had every single one of these, and governance ultimately was too little too late to save the company. AirBnb, Stripe had a few of these, but turned out OK. It seems like the common variable that spares startups from ethical collapse is good board governance and having a reasonable / willing to evolve CEO. FB is an interesting case, because they check most of these boxes (maybe not fear/silence?), yet are fairly "successful". Governance isn't the explanatory variable, since Zuck has 90% of voting shares. The explanatory variable seems to be Zuck's willingness to listen to and learn from a board and his execs.
- petsfed 3y agoI'd argue that "successful" is a poor measure of how ethical a company is. AirBnb has managed to shake off some pretty bad ethical issues. Facebook was credibly implicated in a genocide, and Instagram in particular (and social media in general) has been causally linked to increased rates of juvenile suicide.
- gen220 3y agoOh for sure, that's why I put "successful" in scare quotes. As mentioned, FB checks pretty much every one of the "ethical collapse" boxes with a bolded checkmark. That they've managed to be successful financially in spite of that fact (so far!) is pretty singular. That's a rare group. Not saying it's one to emulate, though, far from it.
- imhoguy 3y agoHas OpenAI just joined the club too? What is the score?
- rossdavidh 3y ago6/7, the board of directors was not "weak" (they fired the CEO). Guess which one of the 7 Silicon Valley is now fiercely complaining about...
- svnt 3y agoArguably they were weak, but not entrained enough to the CEO to meet the criteria of this definition of weak.
- vivekd 3y agoIt's easy to find these things in retrospect. It could be that ethical breaches are common and it's easy to ascribe lapses and wrongdoing to someone after a scandal. For the model to be useful we have to show it can be used to consistently predict scandals and wrongdoing before they happen and before others notice Eg. Can we confidently use this model to short corporate stock