In investment banking, there's a clear hierarchy and juniors are expected to follow the orders of their superiors unquestionably. The orders may be brilliant, good, indifferent, lacklustre or poor. Implementing them may produce fabulous results, moderately good outcomes or not much benefit at all.
Some orders, however, would almost certainly prove harmful or potentially lead to a scandal. Madoff's accountant is an extreme example, but more commonplace instances of bank employees who were just "doing what everyone else was doing" or "just following orders" were Libor manipulators.
Well-known cases include the sorry, sad story of Tom Hayes, the former Citi and UBS trader who went from earning $7.4m in four years to 14 years in prison, and Michael Curtler, a former Deutsche Bank trader, barred from the UK financial services industry after he plead guilty in the U.S. last year to conspiracy to commit wire fraud and bank fraud. The defense lawyer of Jonathan Mathew, one of the ex-Barclays employees accused of manipulating Libor, claimed that his client was on trial "merely for following the orders of a bullying boss," and while that very well may have been the case, it remains to be seen how much weight such arguments will carry in court.
Why would an executive issue risky, thoughtless or just plain bad orders? There are any number of reasons: poor information, faulty analysis, pressure from key shareholders or constituents and feeling their job is on the line. More serious reasons include ego inflation or greed resulting in excessive risk-taking and incentive schemes that distort values and bend or break regulations.
How do you avoid these career-stoppers without alienating the issuer of the order? This requires a professional competency that is almost never taught: intelligent disobedience.
Intelligent disobedience is the name of a crucial skill in guide-dog training. The individual who is blind and uses a dog to get safely to and from their destinations depends on the dog not to obey commands that would put the canine-human team at risk. The human trusts the dog to find a safer route around construction, for example. But this doesn’t just occur spontaneously. Both the dog and the human prepare for this eventuality with training.
This same type of training saves lives and its application extends to human relations. Airline crews are trained to speak up and even take the controls if the captain is failing to see and avoid serious risks. They practice overcoming exaggerated deference that is ineffective in preventing tragedies.
Here are a few of the ways to prepare for those rare but critical times when intelligent disobedience may be needed. Create hypothetical situations specific to your own job and practice these steps:
While it may be difficult to stand up to your boss or manager, especially if he or she has a short fuse, circumstances may arise when doing so is vital to preserving your professional reputation – and your career in finance.
Ira Chaleff is a board member and the founder of the International Leadership Association’s Followership Learning Community, the author of several books, the founder and president of Executive Coaching & Consulting Associates, and adjunct faculty at Georgetown University.