Improving our ethical thinking

I'm in the process of reading Ethics for the Real World: Creating a Personal Code to Guide Decisions in Work and Life, by Ronald A. Howard, Clinton D. Korver, and Bill Birchard. 

Talking about things like "ethics" can seem very dull. But in the right hands, it's one of the most fascinating subjects going. It's one of those topics where you can end up having very fascinating conversations that reveal, at a deep level, how a person sees the world. 

There are a couple of very valuable distinctions that the authors make, which can help inform our ethical decision making.

Distinguishing between ethical, prudential, and legal dimensions

It's very easy to confound these three dimensions when choosing a course of action, but they are very different. A decision may or be legal, for example, but that doesn't mean it is ethical and/or prudential. 

The legal dimension is probably the straightforward. It's the interplay between the ethical and prudential dimensions that I find the most interesting. The question of whether something is prudent or not is different to the question of whether it is right or wrong (in the ethical sense). 

I've found that applying this lens, many of the decisions I make have a prudential dimension but not an ethical one. This has cleared some of my thinking and the emotions associated with some of my decisions in important ways.

Positive and negative ethics

In terms of creating a "personal code", the book focuses on negative ethics. This means that it focuses on things you can decide what not to do, rather than those that you should do.

If you think too deeply about positive ethics, it's easy to think that you're living a deeply unethical life. For example, you could fall into a loop of thinking you could and should be doing more to help underprivileged children and nations, and that anything you do for your personal comfort or pleasure, when you could be doing more, is by extension unethical.  

Negative ethics are a lot more simple and abide by on a consistent basis. If your code says you won't lie or steal, then it's much clearer what it means to follow this code.

Having, and adhering to, a strict code in relation to negative ethics, doesn't create the exhaustion that comes from focusing on positive ethics, and means there is less room for a "slippery slope" where you make one exception, and you subsequently allow for other exceptions because you've already made others. Positive ethics are also more likely to be ambiguous and difficult to define. You could characterise them as more "aspirational".

This isn't to detract from positive ethics and doing good deeds. But it's easier to distinguish the two, and be prepared to give ourselves a break sometimes in relation to positive ethics.


Sonnie Bailey

Sonnie is the founder and principal of Fairhaven Wealth.

Before founding Fairhaven Wealth, Sonnie worked in the legal and financial services industries for over a decade.

Sonnie first became involved with financial advice as a specialist financial services lawyer. For many years, he was an “adviser of advisers”, reviewing thousands of advice files prepared by hundreds of financial advisers, and providing feedback in relation to the quality and appropriateness of advice; industry best practice; risk management; and regulatory compliance. He has published work in industry publications and spoken at various financial advice conferences.

Sonnie has also worked with banks, investment management firms, insurers, and derivatives providers.

Sonnie has worked as a private client lawyer, focusing on succession, estate planning and trusts. He ran his own legal firm in Australia before relocating to New Zealand. He has also acted in independent trustee and company director positions.

Sonnie is passionate about helping people achieve their goals and manage the risks to which they are exposed.

He has written extensively on his blog, New Zealand Wealth and Risk, which can be found at

Sonnie is married to his wonderful wife Chrissy, and has two young children, Ben and Anna.