Last spring, at a conference on Nantucket I co-founded back in 1999, I had the pleasure of running a session on ethics with Harvard Business School research fellow Laura Nash.

A noted author and commentator on business ethics, Nash has spent much of the last three decades training senior directors and officers at Fortune 100 companies on ethics and ethical business practices.

For our conference session—held before an invitation-only group of 150 general partners at venture capital firms and CEOs of Boston-area companies—we'd decided to shake things up. We presented some of what we'd gathered from candid, confidential interviews held prior to the conference with CEOs who'd been funded by investors in the audience.

The topic: the existence of fraud or unethical business conduct standards at their companies.

What we heard was not surprising.

One after another, these CEOs—at both private and public companies—acknowledged the ease with which truths become deceits, accounting figures shift columns, board disclosures become selective, questionable sales tactics get ignored, and ethical standards lose the battle to capitalism and the struggle for quarterly targets.

It was a given: fraud is easy.

It's simple. It's nothing. Doesn't even take any effort.

Is lying hard? Hardly.

In fact, it may be second nature. According to an article in the December 2003 Harvard Business Review by HBS professor Max Bazerman and Harvard psychology professor Mahzarin Banaji, most people harbor un-conscious biases that result in "unintentional unethical decision-making."

So why should we be surprised that fraud is easy—easy to fall into, and easy to commit—regardless of intent?

Which is, of course, part of the problem: Intent. Humans justify their actions with intentions. We cleanse behavior with reason.

Nobody wakes up in the morning saying, "You know, today I feel like committing fraud!"

Instead we justify actions with intentions. "I meant to do no harm," we say; or "I thought this would benefit all parties."

In other words, everyone considers themselves inherently good. Walk down the street and ask anyone you meet if he or she is a good person, and, of course, every single one will say "yes." Everyone considers themselves good and with good intentions.

Which makes sense; absent an objective code imposed from the outside, our emotions and intentions become the standard. When there's no objective right and wrong, we're swayed by the subjectivity of intent.

And, ironically, in all our discussions with those conference CEOs about ethics, the conversation ultimately returned to that theme of an objective code. To many of those CEOs, it seemed, an ethical monotheistic code was having more impact on business culture than Sarbanes-Oxley, the SEC, the threat of enforcement, or anything else.

If you know fraud is easy, and if you know you can get away with it, then legislation and the threat of enforcement mean nothing.

If you know you can get away with it, these CEOs were saying, the incentive to act ethically must come from a belief that something higher than the law requires you to behave ethically.

Or as one Nantucket CEO told us, "It's not the D.O.J. … it's G.O.D."

Does that mean ethical monotheism is a prerequisite of ethical behavior? Of course not—that's preposterous. You can be ethical and secular, just as you can be religious and behave despicably.

But it's also possible that the Nantucket CEOs were on to something; nearly one-quarter of the respondents to a recent Wall Street Journal/Harris Interactive survey said that integrity is "inherent in an individual's character," and that business schools can't teach ethics.

In countless conversations with accountants, regulators, lawyers, and corporate executives over the past 18 months, I've watched the conversation steer away from SOX and GAAP, and veer towards ethical monotheism with increasing frequency.

I'm not sure where the trend is heading, but according to Nash—who has explored these issues before in her books "Church on Sunday, Work on Monday" and "Believers in Business" —it is possible that the renewed emphasis on ethical business conduct may be opening the minds of corporate executives and directors in a way that may have been resisted in the past. Still, Nash says now, there's "still bias toward 'let's keep it private.'"

As always, I'm interested in your thoughts on the matter, and look forward to exploring these issues and publishing your words in future editions of Compliance Week. I can always be reached at editor@complianceweek.com.

The column solely reflects the views of its author, and should not be regarded as legal advice. It is for general information and discussion only, and is not a full analysis of the matters presented.

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