Personal Integrity

Committed Latter-day Saints accept the teaching that we should be honest, true, chaste, etc. (See A of F 1:13.) This teaching is fundamental to our way of life, to our religion, and to the survival of an organized society. But personal integrity, while encompassing these and other virtues, has a much larger meaning than any of the single virtues that contribute to it. It implies strict adherence to sound moral principles, uprightness, and incorruptibility.

There can be little doubt or disagreement on the importance of integrity in our lives. Yet, as with so many other principles of the gospel, questions or doubts frequently arise when we apply the principle to particular incidents or events.

For example, a government employee knows of plans for a super highway and airport development. The price of property in the area is likely to increase sharply once public announcement is made. Should he tell his friend who owns property in the area and is planning to sell? Should he buy property himself?

The director of a corporation knows of a plan to acquire another company. The transaction should favorably affect the market price of the company’s stock. What should he do?

A corporation employee disagrees with certain policies of the management, considering them unethical. But after he discusses the matter with the management, no changes are made. Should he accept the situation, or resign?

We live in an imperfect world in which people and institutions have varying and sometimes conflicting values and goals. Each day we are confronted with decisions and actions that are unclear and uncertain. At times it is very difficult to determine what is right or wrong, what we should do or say. Can we free ourselves from any conflict of interest we might have in a given transaction? Do we have all the facts and do we clearly understand all the conditions? Are we required to call to the attention of the other interested party facts or relevant points he might not know?

How well we respond in these marginal cases will determine whether or not we have integrity. Each specific decision contributes to or detracts from our personal base of integrity.

In business and in government, these kinds of situations arise almost daily. Let me illustrate a few cases from my experiences.

Integrity in Financial Relationships

Our sophisticated economy operates largely on credit. This creates debtor/creditor relationships. Personal, corporate, and public debts require future repayment of principal with interest, on terms and conditions mutually agreed upon. Banks often extend credit without collateral when they have confidence in the character and the previous performance of the borrower. In the bond departments of banks, billions of dollars of U.S. Government and other securities are purchased and sold daily on the basis of oral commitments over the telephone. Markets fluctuate, and after a transaction is consummated, prices usually go up or down, sometimes sharply, before payment and delivery are made. One might expect that people would be tempted not to go through with a deal when the market price reacted against them.

However, in my years of experience in the bond department of the Continental Bank of Chicago, I was consistently impressed with the honesty of those with whom we dealt. In only one case was there a question in my mind concerning whether the other person was actually going to renege on a transaction. Immediately after he gave me a verbal commitment, there was a dramatic change in the market price—a change which would now be extremely costly to him because of his prior commitment to me. In this case he could have backed out of our agreement by arguing that I had misunderstood the terms and conditions over the telephone. Fortunately, such failures to perform rarely take place; if they did, our market system could not function.

There are examples of fraud and manipulation in the financial markets. But those individuals and institutions that lack integrity are usually quickly identified, and those who are concerned about their reputation avoid future financial dealings with them. The most valuable asset of any financial institution is its reputation of unquestioned integrity.

Integrity in Conflicts of Interest

In my experience in business and government, I have found that by the nature of assignments, confidential information that would permit one to profit or to avoid loss is frequently and necessarily made available. Occasionally we read in the papers of those who bought or sold stock or purchased property based on knowledge of corporate or government action not publicly known. I think it is a tribute to the integrity of our people and institutions that there are relatively few such breaches of trust.

In business, government, and the professions, one must constantly be aware of conflicts of interest that might well affect objectivity. There are those who will try to win favor by gifts and entertainment. For this reason, most businesses now discourage or prohibit their officers and employees from accepting gifts of more than nominal value.

Integrity as a Basis for Value Judgments

Integrity is a crucial element in any decision. It is often an adequate guideline in selecting a course of action when the alternatives can be clearly ranked in descending order of desirability or as honorable or dishonorable. However, many decisions are not so clear-cut. In such cases integrity serves as a foundation for a series of value judgments based on analysis and interpretation. In late November 1956, Walter Cummings, chairman of Continental Bank, called me to his office and told me that he had decided to recommend to the bank’s board of directors that I become president of the bank. I told him that I greatly appreciated the confidence and trust he had placed in me, and that I would discuss the opportunity with Lenora and my family and give him my answer the next morning.

Frankly, I had many reservations about taking on such a heavy responsibility. Was I qualified? Could I assume this demanding position and still adequately fulfill my calling as the first counselor in the Chicago Stake presidency? What would this position do to our family? Knowing the public and social responsibilities it entailed, I wondered whether I could still retain the privacy and free agency I so much cherished. These and many other questions needed to be answered. In addition, I had to resolve with Mr. Cummings several differences of opinion concerning the policies of the bank.

After a thorough discussion with my family, I consulted with President John K. Edmunds, of the Chicago Stake, in whom I have great confidence and respect. I also felt it was of sufficient importance to discuss the questions with Elder Harold B. Lee, then a member of the Council of the Twelve. We also made this a matter of prayer.

It became quite clear that I should accept the position. I could and would continue my family and Church responsibilities as well as the work of the bank, in that order. And I would neglect none of them. But I felt an obligation to explain my priorities to Mr. Cummings.

I had a long talk with Mr. Cummings and made very clear to him the importance I put on home, family and church. He indicated that he had similar priorities (he was a devout Catholic), and that he hoped I would always put home and church first in life. He saw no conflict in this and the requirements of the position of president of the Continental Bank.

I further explained that I disagreed with many of the existing policies of the bank—lending policies, personnel practices, and the fulfillment of public responsibilities, etc. He said that he knew very well my views and the strength of my feelings and agreed that I would have complete authority to act and to change such policies.

I shall forever be grateful to those who assisted me in getting started with a clear understanding and a firm charter. Within a few years, the efforts of many people had created the largest bank in the Midwest. We also created many new offices throughout Europe and Asia and in Latin America. The resulting success was personally satisfying and was beneficial to people around the world.

In another case, it became quite clear to me that I had the responsibility to take an action that would affect and be strongly opposed by a very important person. The matter was serious and very involved, and I wanted to be as sure as possible that I was thinking clearly and objectively. Was I omitting something? Should I close my eyes to a situation that could be so difficult? I discussed the matter with an attorney and found myself in complete disagreement with his advice. (I learned later that he was in possible conflict of interest since he was also representing certain interests for the other party.) I then went over to see my trusted friend and adviser, John K. Edmunds. I explained the facts as I understood them without giving conclusions. President Edmunds went over and over the facts—he is most thorough—and then outlined the very course of action I had contemplated. He then quoted Doctrine and Covenants 121:41–44:

“No power or influence can or ought to be maintained by virtue of the priesthood, only by persuasion, by long-suffering, by gentleness and meekness, and by love unfeigned;

“By kindness, and pure knowledge, which shall greatly enlarge the soul without hypocrisy, and without guile—

Reproving betimes with sharpness, when moved upon by the Holy Ghost; and then showing forth afterwards an increase of love toward him whom though hast reproved, lest he esteem thee to be his enemy;

“That he may know that thy faithfulness is stronger than the cords of death.” (D&C 121:41–44. Italics added)

I needed to be more persuasive and more long-suffering, but I also needed to reprove with sharpness and then show forth great love and concern for the person. This I did. We were able to settle the matter in the best interest of the bank and in a way that the individual could make corrections and still keep his self-respect. Instead of rupturing our personal friendship, we continued to have a very close relationship with increased mutual respect.

Integrity as the Basis for Mutual Trust

A few years after assuming the leadership of the Continental Bank, I had a memorable experience which emphasized the importance of not violating a personal trust.

Arthur Leonard, who was President of the City National Bank of Chicago, came to me and told me that he was having difficulty finding management to succeed him and that a major shareholder was causing problems. He indicated that he was also going to discuss the matter with our principal banking competitor.

A few months later I called on Mr. Leonard and said I knew of an able man who might be willing to undertake the management assignment and perhaps could reconcile the dissident shareholder. Mr. Leonard hesitated for a few minutes and then said he felt he must tell me that a competitor bank had made an offer to purchase the City National. I asked him whether he had accepted the offer. He said he hadn’t because, in his judgment, he had not been offered a fair price. He told me that he had written the other bank, explaining the parts of the offer that were not acceptable.

I then told him that the Continental Bank was prepared to make a reasonable offer for the City National. He replied that he thought his bank—in terms of assets and liabilities and from the standpoint of personnel and customers—would fit better with Continental than with the other bank. However, he further explained, it was not clear in his own mind whether or not he had a moral obligation, if not a legal one, to go through with negotiations with the other bank since they had made a firm offer.

In response, I pointed out that he had an obligation to his share-holders, employees, and customers to do the best job possible for them and that he now was on notice that the Continental Bank would make a bona fide offer. I thought he was now obligated to inform the other bank of this turn of events.

Mr. Leonard was a man of integrity. Because of this, he wanted to make a sincere effort to satisfy himself concerning what he should do in these circumstances. I suggested that we select a man of character and integrity in whose judgment we both had confidence and get his advice. We agreed on Leonard Spacek, the head of Arthur Anderson, a prominent national accounting firm. After Mr. Leonard had fairly presented the case to him, Mr. Spacek said: “You have no moral or legal obligation to accept the other bank’s offer. On the contrary, as head of the City National, you are now advised by the head of the Continental Bank that they will properly present an offer to buy. You are under obligation to notify the other bank in order that they might improve their offer if they so desire.”

During our discussion the question was raised as to whether Mr. Leonard had told me of the other bank’s offer. My reply was that Arthur Leonard was a man of character who would never disclose any of the details of the offer in order to get me to make a higher bid. I also made it quite clear that if the other bank’s offer were placed on the desk, I would not look at it. Within a week the Continental Bank did submit an offer which was accepted by the City National board of directors. The successful merger that occurred and the subsequent growth of the new institution that was created is clear proof of the wisdom of the decision. But besides the financial success of the merger, personal satisfaction comes from knowing that the experience was based on an exchange of mutual trust and correct negotiations. In the ultimate sense, how we do things is what determines our personal character, not the end result alone.

Special Obligations of Integrity

One point that has been impressed on me time and again is that as Latter-day Saints with ideals and standards set by our Savior, and seeking as we are to perfect ourselves, we seem to be judged more critically than others. It seems the world expects us to maintain higher standards than others, and indeed we should. When the press described President Nixon’s Cabinet, religion was mentioned in two cases: George Romney and myself, both Mormons. Similarly, when I visited foreign countries, in U. S. Government capacities, it was frequently mentioned in the headlines that was a Mormon.

I have noted also that when a crime is committed by a Mormon, the national press almost always refers to the religion of the culprit. This is usually not the case with members of other religions. I believe this reaction emphasizes that while we are in the world we are not “of the world.” The message of the scriptures that to whom much is given much is required (D&C 82:3) is certainly true.

Integrity Is Only the Beginning

A person’s integrity ultimately becomes the measuring rod others use to judge his character and behavior. If a firm reputation for integrity is developed over time, then when errors of judgment occur they are recognized as human mistakes or the result of external events rather than basic character flaws. Integrity thus becomes a basis for behavior and a style of life. It creates many positive opportunities, because people are always anxious to find others who can be depended upon. A clear personal set of standards also creates constraints—we often label this as the influence of our conscience—that may protect us from the more tragic errors of life.

I also believe that integrity brings many personal benefits beyond the obvious creation of a personal reputation and the development of an operating code of behavior. In fact, it is probable that we are blessed more by our virtues than for them. For example, personal integrity creates self-confidence, which improves our ability to make decisions. This increased self-confidence influences all of our personal relationships. A person with integrity can be more creative in his approach to life because he can always measure a given situation of uncertainty against his basic principles. Such a person is also more likely to be more trusting of others, more tolerant and merciful, and more supportive of the efforts of family, church, and secular organizations. These are all desirable individual virtues, created as a by-product of the basic belief in the importance of integrity.

Integrity is thus the basis for trust in this life, enabling us to combine faith with free agency.

[illustration] Illustrated by Del Parson

David M. Kennedy, a special representative of the First Presidency, resides in East Mill Creek Fourteenth Ward, Salt Lake Mt. Olympus North Stake.