The litany of exposures of unethical behaviour in major private and public sector organisations highlights an outstanding need for today’s leaders to change their leadership styles. Many are failing to operationalise their principles in organisational systems, practices and, above all, attitudes and need to move beyond publishing company values or codes of conduct.

The sad reality is that unethical behaviour in business happens because the environment tolerates it. “Motivated Blindness” (Blind Spots: Why We Fail to Do What’s Right and What to Do about It, Bazerman, M.H. & Tenbrunsel, A.E.) may even prevail where leaders don’t recognize the ethical risks they have themselves created. These risks include short term incentives; command & control cultures or a tolerance for poor behaviour from high performers. Changing culture might get in the way of achieving desired outcomes and are too inconvenient to recognise.

So how can leaders better design their organisation so they are not blindsided to its ethical risks?

Here are our top 9 recommendations based on our experience delivering ethics training and intergrity frameworks throughout Australia and Asia.

  1. Draw on behavioural economics to design the organisational risk culture you want
  2. Harness your organisation’s internal story and language to communicate values in a way that everyone clearly understands. Strategize to build collective meaning with contractors, business partners and suppliers) around what ‘integrity’ means for your brand
  3. Insist on consistency in integrity role modelling from the top
  4. Ensure performance management systems align with stated values
  5. Hold middle management accountable for building shared employee behaviour standards
  6. Spread risk management accountability amongst key executives
  7. Invest in regular face to face ethics training to skill employees in canvassing potential adverse impacts; how to protect themselves and the organisation by early risk issue spotting and reporting via the internal risk and support systems
  8. Regularly identify and measure management of internal cultural risks
  9. Ensure safe two-way communication channels exist so employees can raise issues of concern

There is a difference between leadership and ethical leadership. The first is ego centric while the second is “other centred”. Ethical leadership looks to design organisational cultures where it’s easy for their people to do the right thing. If leaders in organisations settle for anything less these then exposures and scandals that risk reputation and wellbeing will remain.