1. COMPARING PRIVATE AND
PUBLIC SECTOR ETHICS
Presented to Cohort 44, MPA 642A
By Alan D. Lewis II
Presiding Co-Chair
Global Capital Alliance

2. AGENDA
 Presentation Objectives
 Defining Public vs. Private
 Visualizing the “Playing Field”
 Private Sector Ethics
 Public Sector Ethics
 Common Underlying Traits
 Common Ethical Principles
 Conclusion
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 2

3. PRESENTATION GOALS
 Distinguish the difference between Public versus
Private.
 Compare and contrast Public vs. Private sector ethics.
 Indentify common underlying traits and resulting
shared ethical principles.
 Understand why ethics are important in all sectors.
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 3

4. DEFINING PUBLIC V. PRIVATE
 Shareholders vs. Stakeholders
 SHAREHOLDERS: Have a direct economic stake in the enterprise (investors, donors, customers, tax
payers)
 STAKEHOLDERS: Are directly impacted by the activities of the enterprise (e.g. employees, creditors,
impacted economies)
 Private and Public Investors
 PRIVATE: Individuals, businesses, private funds
 PUBLIC: Municipal bonds, non-profits, trust funds, government grants
 If money is coming out of someone's pocket to fund someone
else's activities; they’re for all intents and purposes an “investor”.
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 4

5. DEFINING PUBLIC V. PRIVATE
 PRIVATE: Owned by less than 300 shareholders
 PUBLICLY LISTED: Owned by more than 300 shareholders
(e.g. NASDAQ, NYSE, OCT-BB, Commodities, Futures, Mutual Funds)
 NON-PROFIT: Owned by the state for the benefit of the public;
funded through combination of taxable and tax-exempt business
activities, donor support, and government funding
 GOVERNMENT: Owned by and for the benefit of tax paying
citizens
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 5

6. VISUALIZING THE PLAYING FIELD
Communal Laissez-faire
(Low Volatility) (High Volatility)
SHAREHOLDER
STAKEHOLDER
QUALITY OF LIFE United States / Global Economy RETURN ON
INVESTMENT
Stability GDP
Reinvestment
Public Sector Private Sector Reinvestment
Value Value Value Value
Government Non-Profit Publicly Listed Private
(Highly Regulated) (Moderately Regulated) (Highly Regulated) (Moderately Regulated)
Taxes Donations Investment Investment
Public and Private Investors
Income Savings
SOCIETY
Figure 1 | Mixed Economy in Theory ©2011 Stonecutter Group, LLC
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 6

7. PRIVATE SECTOR ETHICS
 VALUE DEFINED
 ACCOUNTING: The monetary worth of an asset, business entity, good
sold, service rendered, or liability or obligation acquired.
 ECONOMICS: The worth of all the benefits and rights arising from ownership.
 MARKETING: The extent to which a good or service is perceived by its
customer to meet his or her needs or wants, measured by customer's
willingness to pay for it.
 ETHICS IN AMERICA: The Anatomy of a Hostile Takeover
(http://www.learner.org/vod/vod_window.html?pid=195)
 EXPERIENCE: Business ethics are a myth.
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 7

8. PUBLIC SECTOR ETHICS
 VALUE DEFINED
 ACCENTURE: “Social achievement” outcomes and “cost effectiveness”.
 THE WORK FOUNDATION: “ …is the analogue of the desire to maximise shareholder
value in the private sector.”
 CREATING PUBLIC VALUE: “ – must be able to show that the results obtained are worth
the cost of private consumption and unrestrained liberty forgone in producing the
desirable results.”
 HARVARD BUSINESS REVIEW: “…is created when resources, inputs, processes or
policies are combined to generate improvements in the lives of individuals or society as
a whole.”
 EXPERIENCE: Big, growing, costly and inefficient government (e.g. budget and education
crisis). Value and performance driven non-profits (e.g. Mid Valley Family Y).
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 8

9. COMMON UNDERLYING TRAITS
 THE GREED FACTOR: Survival necessitates that an individual take care
of themselves before others.
 FIDUCIARY LIABILITY: Statutory and ethical concept that places a
respective trustee’s selfless interests ahead of their personal.
 OTHER PEOPLES’ MONEY (“OPM”): You can do what you want with
your own money. However, the “Prudent Man Rule” dictates once you
take other peoples’ money, you’re responsible as a “trustee” to handle it
“reasonably”.
 MALFASEANCE: A breach of fiduciary or related material responsibility
applied to government, non-profit, and public company “trustees”. May
result in civil and/or criminal liability.
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 9

10. COMMON ETHICAL PRINCIPLES
 KANTIAN ETHICS: Do onto others as you’d ask done to yourself.
 TRANSPARENCY AND ACCOUNTABILITY: If you have to hide it, you’re doing
something unethical. Truth winners have nothing to hide.
 (SOCIAL) RESPONSIBILITY: Setting aside personal interests for the interests of
others.
 SUSTAINABILITY: Setting aside immediate gratification for long-term
satisfaction. Slow growth vs. bubbles a/k/a “get rich slow”. Green economy.
 BIG PICTURE THINKING: Domain knowledge and context.
 SELFLESS COURAGE: Truly is the battle between economic good vs. evil.
Battles require heroes.
 TRUST: THE ULTIMATE GOAL.
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 10

11. CONCLUSION
 No matter the sector, we’re all interconnected through our economy.
Economics is about more than money. It’s about how we interact.
 We have to ask ourselves what kind of “economy” do we want to live in.
 One predicated on greed, or one predicated on liberty coupled with social
responsibility?
 As it stands now, the balance is in favor of greed and rising (economic)
repression. (The dark-side is winning!)
 Our roles then as public and private leaders is to set aside our personal
interests, embrace our responsibility as trustees of “OPM”, and act
accordingly.
Comparing Private and Public Sector Ethics Presented by Alan Lewis
MPA 642A | Tseng College @ CSUN Slide 11