Direct Sales and MLM

DSA Hints At Its Intentions of Publicizing Code of Ethics Violations

By
Kevin Thompson

Without question, self-regulation is better than government regulation. But when you remove the "regulation" out of "self-regulation," it's all sort of pointless. In other words, rules without penalties are meaningless.

I was recently speaking at the Association of Network Marketing Professionals conference. It's at these sorts of conferences where professionals get a sense of what's really going on in the industry. We all get together, in casual environments, and compare notes about who's crushing it, who's cheating and everything in between. The common frustration throughout the years has been this yearning for improvement. People in the industry have a deep, deep desire to elevate the profession to a higher status. But in an environment where "anything goes," this has been an insurmountable task. The words have fallen on deaf ears, yielding zero progress. After all, how can you elevate an entire industry without (1) a set of rules; and (2) consequences for when those rules are violated. Currently, we've got #1 covered. We're working on the second. During my talk, I asked the audience of 500+ to raise their hands if they've heard of an industry-wide Code of Ethics. They all raised their hands. I then asked them to keep their hands up if they've heard of a single infraction of that Code. There was 1 person in the room with his hand up, and I'm convinced he thought he was going to win a prize. When people ask me how we can "elevate the profession," the answer is crystal clear: we need to get more serious about self-regulation. It does ZERO good to have standards when it's easy (and profitable) for people to infringe on those standards with no consequence. In an environment where there are no speeding tickets for driving 90 MPH in a 70 MPH zone, owners are forced to push the envelope, which leads to serious degradation in industry standards. We have good rules (that need to be improved). But once in, companies have never been...penalized. In an article written by DSA President, Joe Mariano, he makes it clear that better days are coming for ethics. In the article, he writes,

Indeed, ours are some of the strictest membership standards of any industry association. Unlike many trade groups that throw out bad actors only after unethical or anti-consumer behavior has been identified, we vet our members on the front end.

In other words, they place the priority on the front-end. Once a company is in the club, the DSA has been slow to penalize (candidly, I've never heard of a single penalty....ever). Based on statements from Mariano, this will soon change,

. . . I nevertheless seized the moment during last month’s DSEF self-regulatory panel to commit DSA to greater transparency around Code enforcement actions, effective this year. We will undertake new yearly public reporting of complaints received by the independent Code Administrator, as well as the corrective actions taken to address the complaints.

NFL and NASCAR

Public enforcement. It's a step in the right direction. The NFL is an example of an association that takes its rules seriously (at least lately). While they were not able to prove conclusively that Tom Brady had knowledge about deflated footballs, they suspended him for 4 games and fined the Patriots $1,000,000. The message was crystal clear: There's no room for teams in the league that push the ethical boundaries. Zero tolerance. What about NASCAR? Same story. They repeatedlyfine for questionablebehavior.

Spare the Rod, Spoil the Child

And as we've seen with the NFL and other examples, when there's a deep commitment to integrity, and that commitment is backed by enforcement, the end product is better. In the absence of penalties, trust erodes slowly over time as companies compromise on basic principles of decency to secure enrollments. Marketplace trust is crucial and it will never occur until we all get in sync on best practices. I firmly believe that our industry's best days are ahead of it. Improvements when it comes to self-regulation are a crucial step in the right direction. If this new commitment to regulation lacks substance in the long term, we'll be back to square one.

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