Jefferson Pilot Financial

An Interview with Robert D. Bates, retired insurance executive, active community leader and Chair of the Omaha Business Ethics Alliance
By Kyle Smith and Laramie Wingfield, Creighton University MBA students

What are “ethics?” Bob Bates defines it simply: “Knowing right from wrong and having the courage to do what’s right.” As a former CEO of a public insurance company and as the current Chairman of the Omaha Business Ethics Alliance, principled behavior remains top of mind for Mr. Bates.

At a time when principled leadership and success in business seem to be mutually exclusive, Bob Bates believes that ethics are as essential to a business‟ success as revenue is.

As a young boy, Mr. Bates gained his moral insight from his father. At the age of eight, he watched as his father worked deals in their small Missouri town. “My father always wanted the other person to walk away feeling good about the deal.” As Mr. Bates‟ career developed, he learned from the leadership of others. He saw how ethical leaders inspired others to a higher level of principled behavior, while lesser leaders opened the door for subordinates to “cross the line” without reprisal. When he became the leader of an organization, he felt it was his responsibility to promote ethics within his organization. Routinely he would distribute articles he had read to his staff containing success stories or warnings of others‟ lapses. This practice he felt informed his staff of the “grey area” of business. “They need to know how you are thinking, so they can think like you. Moral principle must be front of mind all the time.”

To cement ethics into the corporate culture, Mr. Bates was instrumental in creating his company’s “bloodstream beliefs.” These core values were drafted to be the lifeblood of each associate’s interaction with customers and stakeholders. “The bloodstream beliefs‟ were not optional. Within the boundary of propriety, we wanted all the creativity people could give us. However, honesty, transparency, how you treat people, and how you treat customers were non-negotiable.”

When asked about the most difficult ethical situation he faced, Mr. Bates remembers the demutualization of Guarantee Mutual Life Co., which would eventually become part of Lincoln Financial Group. As the executive in charge, Mr. Bates issued the dictum that he wanted the demutualization effort be “squeaky clean and be perceived as such.” “I wanted everyone involved to know that the deal was clean. If there was even perceived impropriety, the whole deal would be tainted. I wanted everyone to know it was on the up and up.”

Despite his dedication to doing the right thing, Mr. Bates is not willing to sacrifice profits altogether. He continually discusses how ethics and success are not mutually exclusive. He was quick to point out that without profits, the business no longer exists, but without ethics businesses crumble from the inside. “There should be a healthy tension between dedication to customer service and dedication to the bottom line. Good companies do both, and in today’s environment you have to do both. But everyone should embrace the values and character of an enterprise; these are the things that kick in with you are in trouble.”

Mr. Bates offers several suggestions to current and developing business leaders who seek to maintain a high ethical code of conduct.

Leaders set the ethical tone in the business

Leaders must combine empathy and courage in holding the ethical line for their organizations. He suggests that by blending these two qualities leaders can maintain dignity of the people of the organization and set clear boundaries. Communication is key to educating employees on where you view the ethical “line” to be.

When making decisions, you need to select the best one    

Some of the most difficult decisions may be between two right decisions. Leaders must evaluate their options for the best answer. “People pick up on right and wrong pretty quickly. But when you are dealing with ‘right’ and ‘right’ its more challenging. You have to work hard to make sure everyone involved knows why one was selected over the other.”

Pressure reveals a person’s true value system

“For many when the pressure is on their resolve to be certain that they do the right thing intensifies. For other people unfortunately, under pressure, it’s like there is another switch that pushes them in another direction. They take more risks and get closer to that edge.”

Continually learn about the ethical risks in your industry

Times change, and new challenges will surface. Leaders must be diligent in seeking out those challenges before an issue arises.

Mr. Bates continues to contribute to the ethical climate of businesses through his involvement in various non-profit organizations in the Omaha area. In addition to being on the Board of Trustees of the Omaha Business Ethics Alliance, he was inducted into the Omaha Chamber of Commerce Hall of Fame in 2009.