Traits of Ethical Leaders

In many years as an ethics consultant, I have seen my share of ethically challenged leaders in both business and government. Most do not sustain success, but some do. But I have also worked for highly ethical individuals who have risen to the top of their organizations. There is much to learn from those who match ethics and success. Here are some lessons based on observations of ethical business leaders.

Say less but say the truth.

When you are a CEO, every word you say is measured by your employees, doubted by journalists, parsed by analysts and weighed against laws and regulations by a hungry plaintiff’s bar. You are not entitled to many opinions as any expressed opinion will be mined for potential insight into what your company will do next. This is why CEOs are often quiet on issues of the day. When they speak, they are speaking for their companies and not themselves no matter how hard they try to separate the two. Ethical leaders avoid half-truths and lies by saying less. They limit what they say to what they know – or think they know – to be true.

Four additional lessons from ethical leaders will be shared in future posts.

Trademark Your Ethics

This post is part of a series of posts on ethics and success.

If you want ethics to fuel your success, make ethics part of how you work. For example, if you are in a sales position, get to be known for providing customers with honest information. Make honesty a part of your sales edge. If you work on a technical team, be generous in giving others credit for what they accomplish. Just as we have confidence in companies with a reputation for honesty, people will have confidence in you if ethics is your work trademark. Will others try to take advantage of your ethics? Certainly. But your ethical trademark will help you push them back over time as others see their conduct for what it is.

2nd Ethical Mistake

In my pursuit of the biggest mistakes leaders make, the second biggest mistake is fixing a problem going forward without owning the problem’s history. This would be like GM fixing its ignition problem going forward without owning the problem in cars currently on the road. This never works but it is very tempting to leaders who don’t want a past problem dragging their organization down. But you have to own the organization’s history to be able to move on.

Book at O’Reilly

My book Make an Ethical Difference is on sale at half price today at One day only.

Getting Fired

Ever more frequently, I learn about compliance officers losing their jobs, mainly because they were doing them. A lot of organizations have a compliance officer because they know they are supposed to. But they would really be happier if the compliance officer cashed their paycheck and stayed out of the way. This is confirmed by the fact that the compliance officers being fired are not the dregs but often among the best in the business. Compliance officers are not always adept at organizational politics and tend not to be assertive on their own behalf. But this is a job where you have to get a contract for at least three years. You owe this to yourself and those who depend on you. I know that asking for a contract may seem extreme, but you don’t answer the phone where I work.

On Line Ethics Course

One of the most popular topics in my writing and speaking is how to influence ethically. I am pleased that SoundviewPro, which is the same company that does Executive Book Summaries, has made available a full video-based course titled “Influence with Ethics.” The course consists of four separate classes each built around practical tools for being effective at influencing with ethics. You can preview the course at  Be sure to let me know if the course helps you and how it can be improved.

Compliance Interview

In a recent interview, Mark Pastin discusses a wide range of issues on corporate compliance. Please feel free to offer comments on any of the topics discussed in the video.


Reaching Agreement on Ethics

I am always troubled that as soon as people thing of ethics, their thoughts turn to intractable disagreement. But there are broad areas of agreement on ethics, even across cultures, and it is possible to build on these agreements. This is the topic of my new article at in Business Edge. You will find it at As always comments are welcome.


The Walmart Decision

A recent (July 23, 2014) unanimous decision by the Delaware Supreme Court has potentially momentous importance for ethics and compliance programs. Because Delaware is the “corporation state,” other courts tend to follow the Delaware courts on corporate governance issues – remember the “Caremark case.”

At issue was a discovery order on behalf of civil litigants in a Foreign Corrupt Practices Act (FCPA) case against Walmart alleging that Walmart’s board may have breached a fiduciary duty to investigate bribery allegations. (Wal-Mart Stores, Inc. v Indiana Electrical Workers Pension Trust Fund). Among the documents sought by the plaintiffs were files from Walmart’s former compliance officer and files allegedly pertaining to an on-going investigation being conducted under legal privilege.

I know little about the underlying litigation which concerns allegations of bribery in Mexico. And that is not what matters. What matters is that files and documents thought to be related to Walmart’s compliance program were deemed open to discovery in a civil litigation. The Court’s decision was focused in scope, pertaining to files and documents related to potential breaches of fiduciary duty. But it is likely that this decision is a first step toward breaking down the both the legal privilege and the so-called self-evaluative privilege concerning compliance matters. The impact of the decision is great as the plaintiff’s attorneys asserted breach of fiduciary partly on the grounds that the board was or should have been informed of an on-going compliance investigation. In other words, reports of compliance concerns should go to the board but may not be protected when they do.

I believe that this decision will have significant impact on ethics and compliance programs. The relatively free exchange of information between some compliance officers and their boards may well be impaired. More importantly, asserting legal privilege with respect to investigations that are or should be reported to the board is threatened. Like most of these matters, there is a good and bad. Arguments that compliance should report to legal to protect the privilege may be weakened. But compliance reporting to a board may be subject to far greater caution. You can read the decision at:

Healthcare Reform

I am often asked what ethical questions are posed by healthcare reform. Like healthcare reform itself, this is an very complex issue about which confusion abounds. For example, healthcare reform extends healthcare coverage to more individuals. But it does so in part by cutting Medicare. Is this right? Are we financing our social goals on the backs of seniors? Healthcare reform also tries to push the costs of Medicare down through a program called the Medicare Shared Savings Program. I can’t explain the whole thing here but the basic idea is that Medicare rewards you if you drive down the costs for a given patient population while maintaining or improving quality. This sounds like a wonderfully noble idea Read the rest of this entry »