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Epic Ethical Leadership Fails

What Novak Djokovic and Boris Johnson have to do with your compliance programme.

by Dr Bettina Palazzo 2 min

    Tennis stars who believe COVID-19 entry rules don’t apply to them…

    Politicians throwing lavish parties while the lowly people remain stuck in lockdown…

    Like every crisis, the global pandemic reveals the true character of people in leadership positions – for better or for worse. At the same time, society’s level of tolerance for leaders who believe that the rules apply to everyone but themselves is declining. Compliance professionals also know that such double standards render even the best compliance programme ineffective and untrustworthy.

    Why should the rank and file follow the rules if the bosses do not?

    If rules do not apply to everyone regardless of status, people in an organisation of course feel that this is unfair. That then provides the perfect legitimization for breaking one’s own rules. In research, the phenomenon is called “stealing in the name of justice”.

    “Our boss pays for his private trips out of the company’s budget. Well then, I might inflate my expenses account a little bit”.

    At the same time, privileged managers grow even more arrogant because of their exceptional position. Both are dynamics that increase the risk of unethical and illegal behaviour that often mark the beginning of the slow and invisible decay of a corporate culture. Therefore, the bang of the big scandal is pre-programmed.

    So how can we explain that people in positions of power seem to forget so quickly that they are under constant scrutiny and that their behaviour sets the standards for everyone else?

    You probably already guessed that it’s often due to the powerful effect that power has on the human brain. Thanks to neurological research (Keltner, The Power Paradox, 2016), we now know that this power high can have the following effects, for example:

    • Loss of empathy
    • Impulsivity and disrespect
    • A sense of entitlement and being above things
    • Legitimisation of selfish behaviour


    This power poisoning therefore leads to behaviours that clearly counteract an ethical leadership style. Since this is an insidious process, leaders who want to set ethical examples need the willingness to relentlessly engage in critical self-reflection. They need a sharpened understanding of their position as role models. They must anticipate and prepare for the ethical dilemma situations typically occurring in their field of work. Ethical challenges are complex and cannot be solved ad hoc in the heat of the moment. Most managers have not learned to communicate clearly and credibly about ethically sensitive decisions.

    Ethical leadership is now possible without ethical competence

    The good news is that this competence can be acquired and contributes to a leader’s success: ethical leaders have happier and more productive team members who act ethically themselves and address sensitive issues before they escalate.

    At the same time, ethical leadership must not only remain a personal responsibility. The organisation must set the framework: unfair rules, tolerating abuse and the use of incentive systems that polish egos must all be avoided.

    Besides the power high, there are other exciting explanatory models for ethical lapses in leadership.

    In the next issues of this Ethical Leadership blog series, I will tell you about exciting things such as “the moral identity threat” or “ethical hubris” and you will learn what you can do as a compliance professional to protect your leaders from the pitfalls of unethical behaviour.

    Building an effective anti-bribery and corruption programme

    Key principles of establishing an effective ABC programme

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    Dr Bettina Palazzo
    Dr Bettina Palazzo

    Dr Bettina Palazzo is convinced that unethical companies make people unhappy. That’s why she has spent 25 years working tirelessly to make business ethics a topic that is attractive to everyone. She helps companies and non-profit organisations advance the ethical skills of their managers.