Kids Cheat Just Like Their Business Role Models Do

A friend wrote me last week to say how troubled she was by this stunner from her 19-year-old: The freshman at a private liberal-arts college told her mom that cheating on exams was standard operating procedure at school, and that she fully expected that cheating would be an everyday thing once she got into the workplace, too.

"To really get ahead, and get what you want in the business world, it is absolutely necessary to cheat," the student told her horrified mother. Forgo a chance to cheat and you're foolishly transferring a perfectly good opportunity to some other cheater who will reap the benefits, she said.

Though she's years from gainful employment, the young woman has something in common with lots of people already securing a paycheck in the job world.

In a survey of 500 financial professionals in the United States and the United Kingdom released Monday, one-quarter said they believed "that the rules may have to be broken in order to be successful." Asked whether they thought their competitors would break the law to get ahead, nearly 40 percent in the survey sponsored by New York law firm Labaton Sucharow said yes.

Though it's tempting to minimize these dysfunctional ethics as just a sleazy financial industry thing, the problem, of course, infects business on Wall Street and off. In January, the not-for-profit Ethics Research Center said that 13 percent of the 4,600 employees it surveyed across a range of industries last September perceived pressure to compromise standards at their jobs. That was a five percentage-point increase from 2010. Don't expect any miraculous turnaround. Boding poorly for the future is that more employees are reporting retaliation after they speak up, and thus are increasingly afraid to expose unscrupulous practices.

So when you think about it, no mom or dad should be shocked that young people look upon dishonesty as a tool in a go-getter's quest for success.

And parents themselves play a part in the messages they send about attaining goals at any cost. New York City officials said Monday that 70 students at Stuyvesant High School had been involved in a cheating scheme last month. During a foreign-language exam on June 18, the principal confiscated a cell-phone from a student who was texting messages to fellow students. Using data found on the student's phone, a subsequent investigation uncovered additional cheating during previous tests, including three Regents exams.

In the ensuing press coverage, much was made of the stressful demands on Stuyvesant teenagers to meet expectations in a school that sends graduates to places like MIT and Brown. "Most of the students come from families where the goal is 'Ivy League school or bust'; you either go to an Ivy League school or you haven't lived up to your potential," one Stuyvesant grad told the New York Times.

Feel sorry for the Stuyvesant kids if you want, but I don't. At some point, people in charge have to come down hard on cheating, whether it happens in the classroom or in the corner office. Now wouldn't be a bad time to start.

Sadly, the school hasn't taken the opportunity to expel the student/cheaters, much the way many businesses let rogues stay in their jobs. Our executives-of-the-future must wonder what planet we're on when we give those sermons about ethics.

On Long Island last fall, seven high school students -- and young people who posed as those students -- were arrested. Kids who were trying to get into college paid brainiacs to pose as them and take the SAT and ACT exams. The imposters pocketed between $1,500 and $2,500 apiece for their labors.

Schools try lots of things to keep students on the straight and narrow. Some insist that students sign a promise not to cheat before they begin an exam. Others, like Princeton University, require ethics training before freshmen begin their Fall classes.

Dan Ariely, a behavioral economist at Duke University who recently published The (Honest) Truth About Dishonesty, says both measures are useful, but that many people need constant prompting to do the right thing. In his experiments, which for the most part use college students, the professor learned that cheating can be so contagious that even subjects who think they are wearing fake designer sunglasses are more inclined to cheat than those who think they're wearing the real thing. (In fact, in Ariely's experiment, all were wearing the same glasses.)

He also found that, after he gave some subjects the chance to cheat on a test and exaggerate their results, they quickly persuaded themselves that they'd actually earned the score. It's hard not to be reminded of the self-puffery we see from some of the more mediocre players in finance.

A policy that solves at least part of the cheating problem can be found on Wall Street, of all places. The brokerage industry has a self-regulatory organization, The Financial Industry Regulatory Authority Inc., that has often been too soft on its members over the years, but does get one thing right. When brokers cheat on a licensing test administered by Finra, they get kicked out of the industry.

Brokers try to challenge that, of course. One guy who impersonated his boss at a Finra exam -- the impersonator presumably was the smarter of the two -- got caught, and appealed to the regulator that his stressful life had included an abduction by terrorists and the looting of all his assets.

A Finra hearing panel said it was sympathetic to the man's pressures. But the rules are the rules, Finra said, and the broker was history. CEOs and school principals would do well to be just as uncompromising. Our kids have caught on that anything less is an invitation to game the system.