When I covered the Berkshire Hathaway annual meeting in 1994 for CNN, I was given just two minutes to interview the Chairman and Vice Chairman, Warren Buffet and Charlie Munger. I used one of my precious questions to ask Munger if his decision “to violate his own rule to not sit on outside boards and sit on the board of directors of Costco [Wholesale Corporation] was an implicit endorsement of the stock?” He glared down at me through his extra thick glasses. (The room was so small that I had to crouch on the floor to stay out of the camera shot.)

Charlie was peeved not only because I was pointing out an inconsistency between his words and actions, but also because I was asking him to violate his and Warren’s rule against making stock predictions. After about five agonizing seconds, Charlie finally, honestly, begrudgingly, spat out “Yes.” Warren, who had turned to stare at Charlie’s discomfort, swung his head back to me and exclaimed with a big smile, “That’s more than I ever get out of him!”

Charlie’s innate honesty kept him from ducking a question that most powerful people would fudge or simply decline to answer. But fudging and ducking is not what Charlie and Warren do, especially Charlie. They’re fully integrated human beings so, as former U.S. senator Bill Bradley recommends, the externals of their lives truly reflect the internals. They do and say what’s truly on their minds. And because they’re fundamentally honest and expressive, what you see and hear is who they truly are.

They’ve also taken to heart Benjamin Franklin’s most famous dictum: “Honesty is the best policy.” They haven’t done this because honesty is the nicest or the morally correct policy (though it is), but because being honest is how you build trust and value in your word. Honesty greases the wheels of social contact and business contracts. The value of honest, ethical dealings can be summed up in one word—reputation. Whether you are “reputable” is your personal currency among everyone who knows or even just hears of you.

As Buffett wrote his staff in his July 26th, 2010 letter to employees, “The priority is that all of us continue to zealously guard Berkshire’s reputation. We can’t be perfect but we can try to be. As I’ve said in these memos for more than 25 years: We can afford to lose money–even a lot of money. But we can’t afford to lose reputation–even a shred of reputation.”

What people think of you amounts to a social store of wealth, and you’re either adding to it or depleting it every day. The difference between monetary stores of wealth and social stores is that with social wealth, one failure can wipe out your entire account.

When people in Warren or Charlie’s orbit ruin their reputations or even just threaten Berkshire’s, they often lose Buffett and Munger as business associates and friends. Witness the possible misstep and rapid resignation of a Berkshire talent who was considered a potential successor to Warren—David Sokol —who may or may not have been involved with insider trading. Buffett let this valuable lieutenant go rather than even risk the perception of impropriety.

Positive Growth is a Choice

In The Farther Reaches of Human Nature, the psychologist Abraham Maslow writes that being a good, strong, healthy person “is an ongoing process. It means making each of the many single choices about whether to lie or be honest, whether to steal or not to steal . . . and it means to make each of these choices as a growth choice.”

True psychological health is not just about morals. It’s about the quality and clarity of your ongoing moral and ethical choices, which determine how whole and integrated you become as a human being. If you compromise your ethical choices, you not only hurt others, you fracture your personality—which results in a variety of negative consequences. One is that people who are unethical have to compartmentalize their choices, their thinking and their behavior. Therefore they can’t be as relaxed, self-accepting or exuberant or sincere as they could. Think of Bill Clinton going through rhetorical and legal contortions to try and convince the rest of us that he’d done nothing wrong with intern, Monica Lewinsky.

Being Ethical is Better and Easier

The true-blue among us understand and relax into the habit of making each choice part of a unified life of integrity and authenticity. And while making moral choices is fundamentally intuitive to most of us, we do have options all the time to be good, bad or lax. And as David Brooks writes in his marvelous book, The Social Animal, “We are born with moral muscles that we can build with the steady exercise of good habits.”

You have the ability to integrate all the strands of your personality so that you can be true, not just to others and yourself, but to reality—the truth.

Good, capable individuals unconsciously and consciously guard and nurture themselves and their spirits every day in all sorts of choices, large and small. Just as their lives are never static, they are rarely if ever fractured. Their morals and ethics are never cut off from the whole of their evolving beings. Maslow wrote in his book Motivation and Personality that the particularly strong, healthy personalities he studied “rarely showed in their day-to-day living the chaos, the confusion, the inconsistency, or the conflict that are so common in the average person’s ethical dealings.”

Your life is a trajectory. Every choice you make alters that trajectory, in a positive or negative way. Will you categorize that dinner with friends as a business expense? Will you be honest with your daughter? Will you take more credit than you’re due? These are just the small questions that we face every day, and little by little, the answers influence the trajectory of our lives and beings.

Another way to look at it is that life has a moral dimension. Not only is there often a right and wrong, but what goes around does come around, Karma exists, chickens do come home to roost, and as my mother, Phyllis, liked to say, “There is always a day of reckoning.” The good among the great understand that every choice we make adds to the strength or weakness of our spirits—ourselves, or to use an old fashioned word for the same idea, our souls. That is every human’s life work: to construct an identity bit by bit, to walk a path step by step, to live a life that is worthy of something higher, lighter, more fulfilling, and maybe even everlasting.

Cheers from Sonoma,
Donald Van de Mark

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About the author

Donald Van de Mark
Donald Van de Mark is the author of The Good Among the Great: 19 Traits of the Most Admirable, Creative and Joyous People.

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One Response to “True-Blue: Being Ethical is Smarter and Easier – Trait #3”

  1. kristen says:

    I agree, being ethical is a choice and overall it is (or should be) easier than the alternative. I like the idea of taking a look at our small actions and seeing how they add up to a big picture. Great post.