It seems appropriate to discuss ethics fresh on the heels of the mid-term elections, a contest that always seems to cloak rampant self-interest in the suit of guiding principles. (I read recently that Benjamin Franklin created an ethical uproar when he accepted a jeweled snuffbox from the King of France. How quaint such “impropriety” seems in the face of the dirty politics of today.)
If the elections, and our elected officials in general, serve as a negative standard of ethical behavior, then it must be asked, do we as professionals serving our clients, constituents and communities, offer anything more enlightened?
I would assert that the relationship of real estate managers with their investor employers is an intimate financial partnership based to an incredible degree on trust, and establishing and maintaining that trust and reputation is the key to a long and prosperous relationship. And it’s a daily initiative, because trust and reputation are fragile things, easily broken. In such a relationship, there can be little accommodation for mistakes of an ethical nature.
With a Code of Ethics there comes an expectation of a certain behavior. Thus are assurances provided to the public, to your investor employer, assurances that the people they are doing business with are dedicated to standards beyond the minimum provided by law.
But how do you define ethics? And is there a single standard by which all behaviors are measured? Many people believe that ethics are consonant with morals. To me, morals are a personal set of standards while ethics are a set of standards articulated to—and by—members of an association or group.
Importantly, a Code of Ethics, such as those delineated by IREM and other industry associations, must be seen as a perennial guideline, meaning that, though it may be updated to accommodate new work procedures or new technologies such as digital communication, the underlying principles are timeless. Such timelessness becomes particularly important in moments of stress, such as an economic downturn, when the opportunities to behave less than ethically are simply greater.
Nevertheless, they are guidelines, analogous to the lines along the side of the road that keep us pointed in the proper direction. We are confronted daily with situations that are ethically ambiguous, and ethical issues are by their very definition colored in shades of gray. With a Code of Ethics behind us we have a touchstone to reference, a sense of when we’re veering too close to the edge of that road.
For those who may find themselves veering outside the lines, there are consequences, that is, if a Code of Ethics is to have effect and meaning (remember, all members of the group or association swear to uphold those ethics).
Using IREM as an example, we have an Ethics Committee to adjudicate violations of our Code. The consequences for documented violations could be as light as remedial education or as tough as public censure and revocation of certification. This is important to remember, because that coveted certification is rented. It is not owned.
I mentioned that ethics are perennial, updated only for technical considerations or changes in the way work is processed. But as we expand our services beyond the borders of the United States, we are finding that a Code of Ethics also needs to be a living document, sensitive to the cultures, customs and norms of other countries. What might be considered unethical here may not be in Japan or Russia or Brazil. The application of a single Code in those cases is challenging.
That is why IREM was one of the founding members of a coalition of international associations, which similarly treat their respective Codes of Ethics as a cornerstone of their existence and who hunger for a unified application. Our mission is to fashion a global Code of Ethics that embraces the perennial truths of ethical behavior and still remains sensitive to cultural diversity. It is our belief that the ethics that drive our daily business can live with consistency across international borders.
Joseph Greenblatt, CPM, is immediate past president of the Institute of Real Estate Management. He is also president and CEO of Sunrise Management in San Diego, responsible for directing the day-to-day operations of the company, its portfolio of more than 12,000 residential units, and its 350 employees officed in San Diego and Sacramento, CA; Tempe AZ; and Las Vegas, NV.