One of the well-established concepts in social psychology and behavioral economics is loss aversion: i.e., “the idea that losses generally have a much larger psychological impact than gains of the same size.” While psychologists and economists generally discuss loss aversion in the context of tangible gains and losses, loss aversion has some bearing on our response when a person who we know has made significant contributions in life passes away. Our immediate sadness at the loss of the person can distract us from thinking about and appreciating the gains that he or she provided to society or to specific people. For that reason, this post is devoted to a brief appreciation of Professor John Darley, with particular reference to aspects of his research and writing that should be of great interest to corporate-compliance professionals.
Professor Darley, who died several months ago at age 80, was not merely a distinguished Professor of Psychology and Public Affairs at Princeton University for many years, but “one of the foremost figures of social psychology” who strongly influenced the growth and development of that field. His peers recognized him for numerous contributions in the field, through research, writing, and teaching, on such topics as deviance and conformity, stereotyping and prejudice, “morality and the law, the function of punishment, and the way organizations inadvertently promote evil.”
Perhaps his greatest contribution that has special relevance to corporate compliance was his pathbreaking work, with Professor Bibb Latané, on what became known as “the bystander effect.” Influenced by the famous 1964 murder in New York City of Kitty Genovese, who reportedly was stalked and stabbed to death while numerous people watched but did nothing to intervene, Professors Darley and Latané conducted a series of experiments that they ultimately described in an influential paper and book. Those experiments prompted Professor Darley to conclude that
more people present at the scene of an emergency could reduce the chances that anyone would help, either due to pluralistic ignorance (the assumption that because no one is helping, everything must be all right) or diffusion of responsibility (a diminished sense of personal responsibility when others are present).
In fact, corporate compliance officers should recognize that the “bystander effect” can arise in certain corporate settings, even in a company that has asserted that it supports a “speak up” culture. When multiple corporate employees are gathered in a meeting (whether face-to-face or virtual), and some authority figure proposes a course of action that may lead to unethical or illegal conduct, some individual employees in the meeting may be troubled, but the existence of a “speak up” policy or a confidential hotline may be less salient at that moment than the influence of both pluralistic ignorance and diffusion of responsibility in causing those employees not to speak up.
Another of Professor Darley’s works of value to corporate-compliance experts is his 2005 law review article, “The Cognitive and Social Psychology of the Contagious Organizational Corruption.” In that article, he synthesized a substantial body of social-psychology research and writing in rejecting the theory of “a few bad apples” who are responsible for corporate corruption. In his view, “some of the people who launch these corruption-initiating acts do not scrutinize these contemplated acts from an ethical perspective. Strange as it may seem, they do not see them as unethical.” He also posed the question, “What causes the organization to turn itself into one that works together to produce full-blown ethical transgressions?,” and posed a three-part answer:
First, because these others often accept the implied definition that the first actions were ethical in nature, the distance between that first act and the next one that amplifies it are not easily recognizable. Second, these follow on acts are perhaps seen as ethically grey and further are produced out of considerations of group loyalty and commitment. Third, when one is a committed member of an organization, social identity theory points out that we experience an alteration in personality. We “become” the prototypic member of the group, and the cues around us are that the prototypic group members are engaging in the corrupt actions. Thus we do so also. Finally, it is a little noticed truth that our society offers alternate identities to citizens, and some of them allow for acting in ways that, from the perspective of another identity the person could assume, are unethical. (Footnote omitted)
In elaborating on these answers, Professor Darley made a number of key observations about how human beings actually behave:
Many of the actions that begin cycles of corruption are the products of the intuitive judgment system, which means that they are rapidly arrived at, less than consciously considered, and unintentional in their ethical dubiousness. Further, they are often the product of pressure to make fast decisions. And under this condition, they are not subject to the monitoring of the decision, which is done by the reasoning system. As [Professor Daniel] Kahneman comments, “the monitoring is normally quite lax and allows many intuitive judgments to be expressed, including some that are erroneous.” The suggestion that emerges is that the “natural” intuitive decision is likely to be a self interested one. . . . This decision may be overridden by the more deliberate thinking of the reasoning system, but only if something triggers that system into action. Thus, in sum, corrupt actions are often committed by people who are not themselves corrupt.
Corporate-compliance officers who have heard generally about the value of social psychology and behavioral economics in corporate compliance, but are unsure where to begin exploring these fields, should take the trouble to read this article. Moving away from a “bad apples” theory of how to structure compliance policies and internal controls, and toward a more dynamic view of how people actually behave in uncertain situations, can lead to meaningful improvements in compliance policies, controls, and even training. Corporate-compliance officers who adopt that approach will therefore have much for which they can thank Professor Darley.
(P.S.: Compliance professionals who want to explore these fields further can begin with online resources such as the University of Texas McCombs School of Business’s “Ethics Unwrapped” website, or books by two Nobel prize-winning professors: Professor Daniel Kahneman’s Thinking, Fast and Slow (2011) and Professor Richard Thaler’s Misbehaving (2015).)
(P.P.S.: I took Professor Darley’s Social Psychology course at Princeton long ago and obtained the “easy A” that his course was reputed to offer, but did not come to know Professor Darley himself. What I did not expect to get was a lasting set of insights into behavioral influences and “mental shortcuts” that proved meaningful later in my career to understand initially baffling behaviors of both criminals and victims.)
(P.P.P.S.: Professor Darley died of complications from Lewy body dementia (LBD), the second most common type of progressive dementia after Alzheimer’s disease. There is no cure for LBD, and there is still, as the National Institute of Neurological Disorders and Stroke (NINDS) has tactfully stated, “a great deal to learn about LBD.” Those interested in learning more about LBD can consult websites such as the Cleveland Clinic, the Lewy Body Dementia Association, the Mayo Clinic, NINDS, the Stanford Medicine LBD Research Center of Excellence, and in the United Kingdom the Lewy Body Society.)