Andrew Fastow knows about the gray areas.
In 2002, Fastow was indicted on 78 counts including fraud, money laundering, and conspiracy. Now, he speaks with audiences around the world to share his story: How Enron and his personal career derailed, and what he learned from the experience.
On March 29, Fastow spoke with Ivey HBA students via webcast. He told students there’s a distinction between legal and ethical decisions, a gray area of laws, regulations, and rules. Decisions aren’t black and white.
We caught up with Fastow to ask him a few questions about his message.
Q: What do you hope students get out of your message?
Most schools teach ethics like it’s black and white. They say being ethical is to follow the rules, and being unethical is to not follow the rules. But there's a gray area, where the rules may allow you to do something, but it may not be the right thing to do.
Students will be in the gray area at some point in their lives. That is part of life. You need to understand the difference between the right thing to do and the thing you have a right to do.
Q: How would students get into this gray area?
The objective of my talk is first to have students acknowledge they will be in that gray area someday. Second, to have them able to recognize they're in the gray area when that day comes. And last, make them aware that when people make decisions in the gray area, they tend to underestimate the risk.
It's all about loopholes. A loophole means that you're technically following the rules, but you are getting around the purpose of the rule.
When people find and use loopholes, they're not thinking ‘I'm doing something wrong.’ When you’re in the situation yourself, it often starts with small, seemingly innocent decisions. But all of a sudden you find yourself down a path that you can't come back from.
I'm not talking about breaking the rules. That's wrong – no question. There’s a distinction between breaking the rules and using the rules. I'm talking about the latter, when people rationalize that what they’re doing may not necessarily be the right thing to do, but it’s allowed.
Q: How do you help students see the difference?
I get the audience involved.
Let’s say, you work at a university. Football is huge. If your football team wins a national championship, that's a great day on campus. There are big parties, everyone's cheering, it’s a day they’ll remember for the rest of their lives. You’re happy because it helps with student recruiting, game ticket sales, paraphernalia sales, all those things.
Let's say hypothetically the staff of the football team invents a new performance enhancing drug. The important thing to note is this drug is not on the list of banned substances. There's no rule that says you cannot use it. In this hypothetical situation, if all the players on your football team were to take this drug, you would win the national championship guaranteed. Should you do it?
These are the types of tough, gray decisions. The people in the audience are good people. They want to be ethical. Most of them won’t break the rules. But what we need to talk about is when you can do things that may not be right, but they’re not necessarily wrong, either.
Q: You speak around the world to business groups, students, government, the UN, even the FBI. How do Ivey students stack up to other audiences?
I will tell you that Ivey has a special distinction. I get more text messages and questions from Ivey students than from any other group of students. And I will tell you that I speak at all of the best business schools in the U.S.
Ivey students are asking questions and the questions they are asking are great questions.
