What is Ethical Behavior?

What is ethical behavior? Is it based in religion or is it based only in the secular world? Let’s look at some definitions from various sources and then go from there.

Dictionary.com defines ethics as:  a system of moral principles: the ethics of a culture. The rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, profession etc.: medical ethics; Christian ethics, etc.

So according to the dictionary, ethics are not necessarily based in religion but can be based there. Certainly different faiths, whether one is Jewish, Christian or Islam or some other faith there are beliefs in moral principles that could be considered ethical behavior.

Black’s Law Dictionary defines ethics as “a consensus of expert opinion as to the necessity of professional standards.” They (Black’s) also defines ethics in terms of behavior and guidelines among the members of a profession/professional organization and their duties towards one another, clients and the public.

This would be a definition that we are all familiar with in our professional lives. But is there more to it than that? Let’s look at what others throughout history have said.

Aristotle defined ethics as “practical wisdom”. Why practical? Because it involves an action (behavior) – both at the individual and societal/corporate level.  Aristotle also believed that ethics related to what should or should not be done with regard to the things are good or bad for an individual. He also said “we are not studying in order to know what virtue is, but to become good, for otherwise there would be no profit in it.” In other words, we have to “practice” it for lack of a better term. It requires action on our part.

What comes to your mind when you hear the word or think of ‘ethics’? Is it a just list of rules that one must follow in ones professional life? Is it a set of principles – moral or otherwise that you believe in? Is it being fair and honest with others, either personally or professionally? Is it simply following the letter of the law? Does doing that make one ethical? In my opinion, one can be within the law and not act ethically.  Does/should your personal definition of ethics go beyond that just acting within the law? I think it is a combination of all of these and more.

To use a term that is often used in the tax and legal worlds, is there a bright line test that one can use to determine what is and is not acceptable ethical behavior? Do words like integrity, moral obligation, individual and corporate responsibility, truth come to your mind when you think of ethics?  Do ethics apply at the individual level only? In addition to its application to individuals, does it apply to organizations and groups such as cultures, societies, professions, corporations, among others?

Many professional organizations postulate ethical codes for their members – professional journalists, CPA’s, Attorneys, Engineers, Medical Professionals, Human Resources professionals to name just a few that I found. Other examples are government related. Two examples of these are a Taxpayer Bill of Rights and Fairness in Tax Administration. Still another is one that is one that members of Federal, State and Local legislative bodies must follow.

Many companies (including governments) have what could be considered ethical codes, which are typically called a “Code of Conduct” for their employees.

The Institute for Professionals in Taxation (IPT) has established the following Code of Ethics to govern the conduct of its members in connection with the performance of their professional duties as tax professionals and as members of IPT.

As tax professionals, the members of IPT have an obligation for the competence and integrity of their work and conduct.

Each member of IPT is bound by this Code of Ethics and agrees to report to the Committee on Professional Ethics any violation of the Code known to such member.

An IPT member having supervisory responsibility for other tax professionals should make those subordinates aware of this Code of Ethics and instruct them to adhere to its provisions.

The Committee on Professional Ethics, and in the event of an appeal, the Board of Governors, interprets the provisions of this Code in rendering opinions and in conducting investigations and hearings pursuant to regulations and procedures established by the Board.


  1. IT IS UNETHICAL to engage in any conduct that discredits IPT, its membership, or the tax profession.
  2. IT IS UNETHICAL to engage in any activity that results in a conviction of any crime committed in connection with the member’s involvement in a tax matter.
  3. IT IS UNETHICAL to operate beyond the boundaries of an agreed relationship with an employer or client.
  4. IT IS UNETHICAL for a member of IPT to state or imply that such member represents a person that the member does not represent, or to file any document on behalf of such person without authorization.
  5. IT IS UNETHICAL to disclose confidential employer or client documents or information except with the consent of the employer or client or as required by law.
  6. IT IS UNETHICAL to offer or give anything of value to a public official to induce that official to take any action with respect to a tax matter.
  7. IT IS UNETHICAL to offer or give anything of material value to an individual in an employment, advisory or representative relationship with a business to induce that individual to recommend the purchase of goods or services by the business, and IT IS UNETHICAL for such individuals to receive such value.
  8. IT IS UNETHICAL to pay, retain, or accept a share of a fee or other monetary compensation for the referral of a person to another for the provision of tax services in which the recipient of such compensation does not participate, unless advance notice is given to the person for whom such services are to be performed. The amount of the compensation for the referral need not be disclosed unless requested by the person for whom the services are to be performed.
  9. IT IS UNETHICAL to solicit a tax assignment by assuring a specific result or to solicit, assign, accept or perform a tax assignment that is conditioned upon producing a preconceived opinion or conclusion.
  10. IT IS UNETHICAL to initiate or pursue an appeal, protest, refund claim or other action on behalf of a taxpayer for which there is known to be no basis in fact or law. When the basis is unknown, the determination of whether a basis in fact or law exists must be made as soon as reasonably possible.
  11. IT IS UNETHICAL for a member, in the performance of a tax assignment, to fail to exercise independent judgment in advising and representing a client.
  12. IT IS UNETHICAL in the performance of a tax assignment to knowingly furnish or knowingly rely upon inaccurate, deceitful or misleading information, or to knowingly withhold information which lawfully should be revealed.
  13. IT IS UNETHICAL to prepare or use in any manner, for any purpose, a resume or statement of professional qualifications that is misleading or false.
  14. IT IS UNETHICAL in promoting a tax practice or soliciting tax assignments to make misleading or false representations.
  15. IT IS UNETHICAL to use client listings or references without specific authorization.
  16. IT IS UNETHICAL to state or imply IPT authorization, endorsement or approval of any business, product or service.
  17. IT IS UNETHICAL in any representation of fact to IPT, in a membership application, renewal form, or otherwise, to knowingly furnish inaccurate, deceitful, or misleading information, or to knowingly withhold material information.
  18. IT IS UNETHICAL for a member having supervisory responsibility for another tax professional to knowingly authorize, direct, permit or ratify any subordinate’s act or omission that is declared unethical by this Code, regardless whether the subordinate is a member of IPT.
  19. IT IS UNETHICAL to represent a client if such representation would be, or would risk being, adverse to the interests of another client unless each affected client gives informed written consent to such representation
  20. IT IS UNETHICAL to have, acquire, or seek a personal interest in a matter that is adverse to the interests of a client or employer.

[The above was adopted by the Board of Governors on September 28, 1976, and amended on April 28, 1991, November 9, 2002, March 6, 2004, and November 2, 2008 (the November 2, 2008 changes became effective January 1, 2009).]

I recently had the opportunity to be a judge for the Utah State Competition for FBLA/PBL. (business students – high school and college respectively)

The topic?  Business Ethics and Social Media.

How does all this relate to Social Media? (Facebook, Twitter, LinkedIn, and other social media – including blogs like this one) Do we treat present day social media differently than media of the past (print & broadcast)? If so, what rule changes do we make? What is Ethical Behavior in that context? I don’t have any better handle on it than I did before that day.

What is your opinion on what is and is not ethical behavior? Any and all comments are welcome, I would love to hear your viewpoints.


11 Replies to “What is Ethical Behavior?”

  1. Whew, Brad! that was deep! I think ethics are valuable in every profession and in every type of social media. Many people seem to think that they don’t have to be ethical in social media. That’s why you have so many people out there pushing products that have nebulous value and worse people who use social media to gain advantage of data via hacking accounts. If everyone operated all of the time from an ethical perspective, they wouldn’t have so many issues.

    I mostly popped by to encourage you. I saw your comment on Jason Alba’s blog because I must have also commented some time ago on the same post. New bloggers need to be read (so do those of us who have been around for awhile). After awhile, you know that there will be up and down days but in the early days, you really want to know that someone read what you wrote.

  2. Thanks for dropping by, Julie. I appreciate it.

    Ethics is such a wide open topic. I had to take a Business Ethics course in college and I know we just scratched the surface over the course of the quarter and that was before the advent of the internet as we know it today and all that entails.

    By the way, after I saw your comment I clicked through on your link and saw your post for today. Perfect timing. I just opened a twitter account over the weekend. I will be reading and digesting. Who knows, there maybe some comments/questions there too.

    As to Business Ethics and Social Media, that deserves further exploration – probably multiple posts. But I want to mix things up so I don’t get in a rut and do every post on the same topic.

  3. In the Fall of 2011, I was presenting an overview of the finance major to a group of honors students who had been accepted into the College of Business and Economics but had not yet declared their major. I would have the students for three, 50 minute sessions, Monday, Wednesday and Friday.
    As I do in all of my business classes, I began Monday’s session by explaining that the objective of every for-profit business is to make money for the owners of the company now and in the future and that the only way to accomplish this objective is to create value. I then went on to illustrate the creation of value by purchasing a piece of paper for $0.01. I generally have to turn away offers of a free piece of paper from students who missed my opening premise and then reject prices of $0.25, $0.10 and $0.05 before agreeing to pay the $0.01. Once the class acknowledged that the specific piece of paper in question has a value of $0.01, no more and no less, I proceeded to write on the piece of paper finishing with bold strokes that left no doubt that I had signed my name to the paper. I then folded the paper and offered it to the class.
    I let the bidding rise until a young man, who we shall call John, offered $1.00 for the paper. I accepted John’s $1.00 and surrendered to him the folded paper. John proceeded to open the paper, smile, refold the paper and place it in his pocket. Neither John nor I disclosed the contents of the paper to the class.
    On Wednesday, I returned to class and asked John if he was ready to return the paper. He told me that he had sold the paper to which I responded “Great (I love capitalism), what did you get $1.50? $1.75?” Much to my surprise the young man sitting next to John (we will call him Michael) spoke up and said in a noticeable disgusting tone “No, he got five bucks!” I then handed Michael $2.00 and he returned to me the paper. I then read to the class what was written on the paper:
    The holder of this piece of paper will be entitled to receive $2.00 from DeGeorge in the Honors Student Orientation Class on Wednesday, October 19, 2011.
    Frank A. DeGeorge

    Recognizing that a magnificent teaching opportunity had just been handed to me, I delayed my planned discussion on the Capital Allocation Process, financial markets and careers opportunities in finance to ask the class a very simple question:

    Was it ethical for John to sell the paper to Michael for $5.00?

  4. I think everything said was very reasonable. However, think on this,
    suppose you added a little content? I ain’t suggesting your information isn’t solid, but what if
    you added a post title to maybe grab a person’s attention? I mean What is Ethical Behavior? | Brad W. Merrill is kinda vanilla. You should look at Yahoo’s home page and note how they create post titles
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    get people excited about what you’ve got to say. In my opinion, it might bring your posts a little bit more interesting.

  5. This is very advice. I have to state I really like looking over this a great deal. It can help me in becoming better grasp regarding the subject. It’s very nicely produced. I’ll certainly look for the information material so engaging. I really hope it is possible to existing much more eventually.

  6. This article was very useful to me as i was preparing for my report in business ethics.
    I also came to conclude that ethics in the organisation is contradictory as Business by nature is unethical, inevitably exploitative and self-centered
    Thank you Brad!

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