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By Anthony Kioussis
President, Asset Insight

Snake oil merchants in early America would travel from town to town and make impossible claims for their products. With music to draw them in, crowds formed as these unprinci­pled salesmen would lie to the assembly. Whatever malady an unsuspecting prospect might want to alleviate was said to be cured by the snake oil. Today we continue to have sales people in a myriad of industries, including busi­ness aviation, who lack ethical conduct. They’re harder to spot and don’t draw crowds in with banjo players. But their sales pitches can cost gullible prospects thousands of dollars.
Ethics, the moral principles that govern our behavior, include how we conduct our business activities. Managers know this and most seek to operate in an ethical manner.

However, the definition of “ethical behavior” may not be as clear-cut as just the desire to behave ethically, hence the need for rules. Many people hate rules, viewing them as curtailment of their freedom. Others seek rules as a way of eliminating the gray area that can allow unethical behavior.

But there are many cases where people know the rules, agree to follow them, and then break them – in some cases unintentionally.

Examples of ethical behavior

Let’s take an employee who signs an agreement with a company in exchange for training, financial or other assistance.

They may do this to obtain the credentials necessary to perform a specific company and/or industry function. This agreement states that the employee will not compete with the company or solicit its clients should they decide to leave at some future date.

Years later, the employee elects to seek employment in a different function, but with one of the company’s competitors. Is this an ethical transgression? What if the employee took with them various sources of company property, including a company client list or company files and documents?

What if he or she contacted the company’s clients prior to his or her departure to advise that, even though the employee would not be able to provide the same services, he or she knew that the new employer possessed or desired that capability and, of course, the employee would be working there and able to assist.

Exactly at what point does this become an ethical, moral, and/or legal issue? Does the new employer incur a responsibility, through the interview and background process, to ensure a breach does not occur by virtue of this hire? Why? Because the employer can be liable if they know of the employee’s ongoing obligations to the former employer, and because it’s the ethical, moral and professional way to conduct business.

Some years ago, I was offered a position by a top company contingent on meeting certain requirements, not the least of which was to reveal any “potential” conflict of interest I might have. I provided as much background as possible covering areas where conflict might exist, allowing my future employer to decide if there was a problem and how it could be addressed.

Was it time-consuming to go through such a process? Yes, but it exemplified and proved to me the company’s commitment to its stated ethical standards.

While most aircraft brokers work hard to service their clients’ interests, a lack of industry regulations allows sufficient room for a handful of unethical characters to generate bad publicity for our industry.

The aircraft broker and ethics

Many people and companies operating in the business aviation arena represent buyers and sellers in transactions worth tens of millions of dollars.

Yet, there are no standards that one must meet to hold some of those positions. Take, for example, the role of an aircraft broker.

While most work hard to service their clients’ interests, there are no industry regulations or formal training requirements in place, allowing sufficient room for a handful of unethical characters to generate bad publicity for our industry.

The value of NARA and ASA

Enter NARA, the National Aircraft Resale Association. NARA already has standards in place covering ethical behavior by its members, but the organization is taking ethics to a new level.

NARA’s leadership is now focused on establishing a full array of ethical standards that are simple to understand and easy for its members to implement.

If being “NARA Certified” has value today – and it certainly does in the eyes of many aircraft buyers and sellers – imagine the additional industry clout NARA members will attain once expanded ethical standards are in place. Such a focus on ethics is not a new concept.

Take, for example, the ethical standards used by the American Society of Appraisers (ASA) and the organization’s commitment to their enforcement. These standards are adopted by the ASA’s Board of Governors, and filter through to the membership. Moreover, they are a key reason why people seeking an appraisal will request it from an ASA certified appraiser.

Leadership of the National Aircraft Resale Association (NARA) is plan­ning to strengthen the organization’s existing Code of Ethics in an effort to reduce potential gray areas.

Knowing the difference between right and wrong

Professional people know the difference between right and wrong. Regrettably, sometimes they are also able to convince themselves that some rules or agreements they’ve made are not entirely relevant to them because they don’t fit the goal they seek to achieve.

Nobody said that the difference between right and wrong was fair, but an ethical person or company does not view ethical standards through the lens of convenience or preferences. Members of organizations that establish acceptable business standards don’t get to choose which ethics, standards or rules to follow.

Unless one has been living in a monastery for the past few years, it would be difficult not to notice the ethics-centered time we live in. While much of the news has been focused on what has taken place in the past, “a new day is coming” (to quote Oprah Winfrey).

Those entities, be they individuals or companies, not taking notice of and tightly adhering to acceptable business standards will find it necessary to deal with adverse reputational issues and have to budget for hefty legal bills.

The need for a sharper focus on ethics

Kudos to NARA for its focus on this important subject and for the guidance it provides its membership.

The organization’s leadership is to be commended for its efforts. It would be nice to see other industry associations that have not adopted such a focus follow NARA’s lead. There may never be a solution for problematic employees, but ethical entities can differentiate right from wrong and make a positive impact on our profession and industry.

Anthony Kioussis is President of Asset Insight, which offers aircraft valuation and aviation consulting services. His 40+ years of experience in aviation includes GE Capital Corporate Aircraft Finance, Jet Aviation, and JSSI.