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How Leaders Can Be Ethical Role Models

How Leaders Can Be Ethical Role Models

When you hear the names Enron, WorldCom and Arthur Andersen, you instantly think "secrets and lies." But do the misdeeds of these companies represent the modus operandi for leaders today? Are morals in American business deteriorating?

I posed this question to 10 business leaders, and they all agreed that business ethics have eroded over the past two decades. Yet these leaders are also unanimous in their belief that American business can retrieve itself from the gutter. They say it is up to each individual to make good ethical decisions.

Personal Responsibility -- When Does It Start?

It's easy to blame business leaders for corporate transgressions. We stand up and take notice when our retirement accounts are affected, after all. But when should personal responsibility start? In the 2008 Junior Achievement/Deloitte Teen Ethics Survey, 79 percent of teens surveyed said they felt prepared to make ethical decisions when they enter the workforce. However, 38 percent said it is sometimes necessary to cheat, steal, lie or behave violently to succeed. These results would make anyone wonder if, as adults, these students will make the right decisions when they face ethical challenges on the job.

It used to be that making decisions in business was pretty simple. All you had to do was ask yourself, "Is this legal? Is this against company policy? Can I sleep at night if I do it?" Then business got more complicated, with the competition to succeed becoming more intense. The gray areas surrounding decisions expanded. Many leaders are now torn between company profits and doing the right thing. They are also torn between doing what is right for the company long-term and what is good for their careers in the short-term.

What Can Ethical Leaders Do?

Ethical business leaders will have to take some immediate steps to show employees and stockholders they are honest and determined to do their best for the organization. Each leader must model high ethical standards. In addition, here are 10 more steps you can take right now.

  • Assess your personal morals. What you do in your personal life permeates your business affairs and the lives of your children. Be a good role model.
  • Review your company's ethics. Make it clear what is and is not acceptable.
  • Establish your mission statement and your company's core values. High ethical standards are based on integrity, honor, honesty and fairness to all.
  • Communicate the mission and core values to every employee and customer through your words and actions.
  • Create an ethics policy that clearly states the company's philosophy and consequences for not following the policy. The Society for Human Resource Management has published some business ethics guidelines (log-in required).
  • Implement business ethics training.
  • Tighten your accounting practices as well as your conflict-of-interest policy.
  • Establish an ethics panel that will review business ethics violations and questionable decisions. This group can take pressure off employees during decision making.
  • Include ethics in your performance evaluations to ensure employees are held accountable for their actions.
  • Watch out for any employee who is out to make a name for himself. It is often the superstar who is the one pushing the envelope.

No Magic Potion

The University of Missouri has many well-known graduates; two of the more noted are Sam Walton of Wal-Mart and Kenneth Lay of Enron. Their different paths to success remind us that there is no magic formula for keeping your employees honest. As Elizabeth Dole told the Duke University class of 2000, "In the final analysis, it is your moral compass that counts far more than any bank balance, any resume, and yes, any diploma."

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