by Leigh-Anne Walker, Ethical Leadership Group, a Global Compliance company

A debate has emerged in the news around the behavior of banking regulators and Bank of America (BofA) officials over the recent BofA/Merrill Lynch merger. Between the time of the merger announcement last September and the actual BofA shareholder vote to ratify the merger late last year, Merrill’s financial condition deteriorated substantially. Several BofA shareholders are now alleging that BofA chairman Ken Lewis, by failing to disclose the worsening condition of Merrill Lynch, violated his fiduciary duty and thus broke securities laws.

Lewis, in testimony to the New York Attorney General’s office, defended his actions by saying that Federal regulators told him completion of the deal was essential to preserving the stability of the financial system. Importantly, he says he was threatened with the loss of his job if he disclosed Merrill’s poor results, as this would jeopardize approval of the merger. Effectively, he implies that regulators told him to break the law.

This is troubling for several reasons. Is it acceptable to break a law or fiduciary duty if the government is pressuring one to do so in the name of “national interest” or “economic stability?” Is fear of losing one’s job an acceptable reason to violate the law?

Clearly this was a high stress, high stakes time. But a great deal of ink has been expended since the Enron and WorldCom scandals about the importance of having moral courage in ethically difficult environments, of being willing to stand up and risk one’s career to “do the right thing.” While I applaud this line of thinking, employees find it a difficult standard when faced with loved ones to support, mortgages and college bills to pay and healthcare needs to be met.

This is all the more reason why someone of Ken Lewis’ stature and resources needs to send the message that doing the right thing (for the nation’s economy) was the reason he acted as he did. Bank of America employees and stakeholders need to know that it is not expedience of job security that guides BoA’s leaders, but strong, sound principles.