The Power of Leadership

Leadership Effectiveness: Are You Aware Of The State Of Ethics In Your Organization?

Leadership Effectiveness: The State Of Ethics In Your Organization?Employee commitment and your brand’s reputation can be significantly impacted by the conduct of people in your organization. Do you know where your ethics rating stands against “the norm” in other similar organizations? This might be an interesting thing for you to consider as you pursue the vision, execute the strategy, and make the bottom line.

For some guidance on how you might measure up, check out the excellent 2013 National Business Ethics Survey® published by the Ethics Resource Center (ERC) in 2014. Any data quoted here are from this research.

Here are some questions to ask:

  • Am I (and the members of my senior team) role modeling integrity every day?
  • Do we have a strong ethical culture throughout the organization?
  • Do we need to strengthen our ethics and compliance department with an ombudsman office (confidential, informal, neutral, and independent resource to help employees resolve any work-related issue) as well as a confidential reporting hotline?

Of particular interest to us as executive coaches is the role of trust, transparency, and support in creating an ethical culture. In our work, we focus strongly on these areas, particularly in our work with executive teams—and that is the place to start—remember: the tone is set from the top. Also, we work with executives to increase transparency. We help organizations support ethical cultures via alignment of executive behaviors with the organization’s core values. Workers who believe that senior management is ethical, open, and honest are less likely to engage in unethical behavior themselves and more likely to report it when they see it.

Consider the comparison data below which demonstrate employees’ likeliness to speak up when they see wrongdoing in environments created by management where trust and transparency prevail as compared to those where management has not created a trusting environment.

Statement

% Employees Who AGREE with Statement Who REPORT Malfeasance

% Employees Who DISAGREE with Statement Who REPORT Malfeasance

Believe that senior leadership is transparent about critical issues that impact our company

72%

58%

Supervisor gives positive feedback for ethical behavior

72%

51%

Trust senior leadership will keep their promises and commitments

67%

56%

Trust coworkers will keep their promises and commitments

67%

54%

Supervisor supports following the company’s ethical standards

67%

53%

If wrongdoing is not addressed, as probably will occur in organizations where there is a low level of trust, there are potential negative outcomes including expensive law suits, lost productivity, declining business results, loss of reputation, etc. We see the impact of building trust and transparency in our client work. The effects of trust and transparency matter. One place it matters is the speed of execution; see Stephen M. R. Covey, The Speed of Trust. Another impact is on financial results and reputation; think about GM. Attraction and retention of the best talent has been shown to be affected by the ethical profile of an organization.

Here are three next steps you can take:

  • Work on trust and transparency at the very top of the organization (and cascade).
  • Reward ethical behavior within your performance management system.
  • Give recognition for ethical behavior.

What do you need to do to ensure your organization has a strong ethical culture? Is ethics rewarded through your performance management system? Is an ethical culture set at the top of your organization and cascaded down?

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