Bad overall management, bureaucratic red tape, lack of accountability, lack of transparency, a cover-up gone bad, and a total lack of ethics and morals—the story behind the continuing lead-water crisis in Flint, Mich., touches upon many of the very same fact patterns and inexcusable behavior often observed in the most egregious corporate enforcement actions.

Except with the water crisis in Flint, we’re not talking about a company. We’re not talking stock prices. We’re talking people, innocent people—who just as easily could be anybody’s family, friends, neighbors, children in any part of this country—many who now suffer from irreversible lead poisoning due to the misconduct of others that can only be described as gutless, pathetic, unethical, immoral—fill in the blanks.

Join the Compliance Week community

Receive the latest in corporate governance, risk, and compliance news from Compliance Week. Become a new member and get a one-year print & digital subscription for just $8/week.

Learn more

Yes, it is true that in cases of corporate misconduct, individual lives are also affected. People can lose their jobs, face financial hardship and reputational ruin, and even face jail time, depending on one’s level of culpability.

There is a crucial difference, however, between a public-health crisis caused by wilful intent and corporate misconduct caused by wilful intent. When senior executives engage in wrongdoing—willful or not—they are accountable (as they often should be) to themselves and the company’s shareholders and employees.

The difference in cases of corporate misconduct, however, is that you can put a dollar value on a loss in stock price. You can put a dollar value on personal accountability with fines and penalties. You cannot put a dollar value on the residents of Flint, Mich., because you cannot put a dollar value on a human life, or any issues pertaining to health and safety for that matter.

Lessons in ethics

The chain of events leading up Flint’s water crisis offer a litany of compliance and ethics lessons that apply as much to companies as they do to public officials:

Unethical ‘tone-from-the-top’ often points to—or leads to—systemic problems. Although facts surrounding the Flint Water Investigation continue to unfold, even two years later, what is known is that Flint’s drinking water became tainted in April 2014, when the impoverished city—under state control—switched from the Detroit water system and began drawing from the Flint River instead.

Following the rules is easy. Real-world ethical dilemmas are not. When faced with a situation in which everybody is pushing you to do the wrong thing, the question becomes: Are you really strong enough to act with integrity? What do you stand for? Where do you draw the line?

At this time, Flint residents began to complain not only about the color, taste, and odor of the water, but also about health issues that they claimed were related. State officials repeatedly ignored such reports. In fact, they more than ignored reports. What we know now is that state officials deliberately falsified documents and rigged tests to mislead the U.S. Environmental Protection Agency (EPA) about the actual amount of lead in Flint’s water.

Cost cuts should never supersede health and safety considerations. The unfortunate and sad fallout from the Flint water crisis is far from over. On Dec. 20, Michigan Attorney General Bill Schuette brought fresh charges against four more officials.

Schuette also filed a new round of civil lawsuits against two multinational water-supply engineering companies—Veolia and Lockwood, Andrews & Newman (LAN)—for “professional negligence” that caused Flint’s lead poisoning crisis to continue and worsen. To date, 43 criminal charges against 13 current and former state and local officials have been brought since the start of the Flint Water Investigation.

As Schuette indicated in announcing the charges, much of Flint’s water crisis today resulted from the mismanagement of finances and too much focus on cost-cutting. “All too prevalent in this Flint Water Investigation was a priority on balance sheets and finances, rather than health and safety of the citizens of Flint,” he said. “The crisis in Flint was a casualty of arrogance, disdain, and a failure of management. An absence of accountability.”

These first two lessons are ones that compliance and ethics officers understand all too well: To truly succeed, a compliance and ethics program must be supported by strong tone-at-the-top—a moral tone from the top—and the necessary amount of resources.

Bad things happen when whistleblowers are ignored. In April 2015, a Flint resident made a desperate phone call to Marc Edwards, an environmental engineering professor at Virginia Tech, who more than a decade earlier led—and won—a similar crusade against the federal government’s failure to protect residents of Washington D.C. from lead-poisoned water. (I recommend reading this excellent write-up in The Washington Post on Edwards.)

Ultimately, Edwards agreed to help the residents of Flint. Following some testing of their water, he uncovered what he described as the worst lead-poisoned water levels he had ever seen. He shared his findings with the EPA but, just as with state officials, these reports went ignored.

The State Department of Environmental Quality also disputed reports by Edwards that corrosiveness was causing lead to seep into the water supply. But even more disturbing is that Freedom of Information Act requests for documents and e-mails of state and city officials revealed that Michigan Governor Rick Snyder and his state-appointed emergency managers knew of the city’s water problem for well over a year and did nothing.

Compliance will supersede profits when ethics supersedes wrongdoing. Even as Flint fades out of the headlines, the lessons that it brings should not. Flint’s lead-poisoned water is more than just a technical failure, more than a failure to provide drinking water with corrosion-control treatment. We are talking about systemic failures at the local, state, and federal levels, with leadership as toxic as Flint’s water itself.

In the corporate world, much emphasis is placed on the value of having a robust corporate compliance program. But at the heart of every program is people and, if those people who lead the program don’t have a moral compass, the entire organization can find itself lost.

Following the rules is easy. Real-world ethical dilemmas are not. When faced with a situation in which everybody is pushing you to do the wrong thing, the question becomes: Are you really strong enough to act with integrity? What do you stand for? Where do you draw the line?

At the heart of every town, city, state, federal government, and company, that’s the real question. That’s the real test.