In a world riddled with corporate ethical dilemmas, leaders face a critical choice: Redefine their legacy by embedding ethics into every decision or be remembered for compliance alone. There are certain steps leaders can take to not only navigate these turbulent times but also to cultivate thriving, ethical ecosystems that benefit both their business and society
This blog post was written by Max Beilby, an organizational psychologist specializing in applying behavioral science to enhance culture and risk management within financial services; Antoine Ferrere, the CEO of lumenx.ai, and a recognized leader in applying behavioral, data science and AI for good; and Brian R. Spisak, PhD, a leading voice at the intersection of digital transformation and workforce management. The views expressed in this article are Max’s alone, and do not reflect the views or opinions of his employer.
Key insights:
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Ethics must be embedded, not bolted on — Corporate leaders should move beyond legal compliance to proactively weave ethics into decision-making and define their legacy by how results are achieved, not just what is achieved.
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Misconduct is usually systemic, not individual — Unethical behavior often arises from environments in which there are misaligned incentives, pressure, and self-deception. Thus, redesigning rewards and evaluations to balance short- and long-term outcomes is pivotal.
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A practical playbook exists — Use a catalytic anchor event, measure the ethical climate rigorously, empower local teams with data and AI-driven tools, align policies and incentives globally with core values, and run small, iterative experiments to refine what works.
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We’re at a pivotal moment in history, a defining moment in which rapid societal change and mounting crises are intersecting with awe-inspiring technical advancements. This convergence — undoubtedly dangerous — is also an opportunity for leaders and their teams to turn the tide and demonstrate how principled decisions can lead to transformative outcomes for business and society.
As we navigate this critical juncture, it’s clear that the path forward requires more than mere compliance with laws and regulations. It calls for proactively embedding ethics into all aspects of organizational decision-making. Indeed, this is corporate leaders’ opportunity to redefine their legacies — to be remembered not just for what they achieved, but for how they achieved it.
The challenge
First, we acknowledge the trade-offs and ethical dilemmas that often seem insurmountable in the corporate world. The perceived tug-of-war between people and profit, speed and safety, or quality and quantity, pose significant challenges. However, our belief is that, despite these hurdles, it is indeed possible to create ethical ecosystems that not only survive but thrive.
What is important to understand is that ethical lapses are often underpinned by self-deception. Employees don’t suddenly become dishonest; however, in the absence of an evidently ethical culture, rationalization and post-justification can make it seem as if one is grappling with complex ethical dilemmas of balancing benefits against potential risks. While this dilemma is often real, it can also be fundamentally self-serving, cloaking the profit motive in the guise of the societal benefits — be it patient care or financial well-being.
Further, misconduct in business arguably most often stems not from a couple of rogue actors, but rather, the broader environment that either promotes, or fails to curb, unethical behavior. In other words, it’s less about isolated bad actors, and more about a work environment that allows ordinary people to succeed professionally, through what they perceive to be acceptable compromises. Misconduct therefore doesn’t occur in a vacuum; it festers in conditions in which flawed incentives, unreasonable commercial pressures, and ethical blindness prevail. Similarly, hyper-competitive performance evaluations that incentivize individuals to compete in a zero-sum contest, rather than rewarding groups’ performance and their ethical conduct, can encourage unethical cultures to spread.
5 steps toward ethical cultures
Admittedly, redesigning these systems requires a paradigm shift in business. However, there are several practical steps that enlightened business leaders can take to foster ethical organizational cultures.
1: Identify an anchor
To initiate such a transformation, it’s crucial to identify an anchor — a notable event that can serve as a catalyst. For example, this could be prompted by a scandal or a change in leadership. The key is to use this event not just as a standalone occurrence, but to signal a shift in how seriously ethics is taken within the workplace.
Use your anchor event to announce your intention to enhance your organization’s ethical infrastructure. This should be the moment that captures people’s attention.
2: Establish a baseline
While data from engagement surveys may offer some insights, they often lack the rigor needed to assess the ethical climate of the typical workplace. To create a precise measure, consider other factors such as employees’ perceptions of fairness and trust. These perceptions can be evaluated using methods such as anonymous surveys and confidential interviews.
By establishing a robust analytical system, you will be able to produce a clear picture of the current ethical climate across your organization, while identifying those business areas that need intervention.
3: Empower locally
Presenting data can ignite interest and spark meaningful conversations about ethics, which in turn can help shift the narrative and establish a common understanding.
Focus on creating interactive sessions in which leaders can digest data and discuss implications for their business areas. Empower HR, Risk & Compliance, Legal, Finance, and other corporate functions with the tools and training needed to analyze and interpret the data. This could involve training modules, workshops, and the integration of AI tools to provide nuanced insights.
4: Act globally
While empowering local teams to address ethical dilemmas is crucial, it is equally important to ensure their policies and processes are aligned with the organization’s overarching values. While such alignment can be a challenge for large multinational organizations, emphasizing these universal values can be done.
For example, revisit incentive systems and check that they promote desirable behavior, rather than solely focusing on financial performance. Also, ensure that these systems are transparent and communicated clearly and consistently to all employees.
5: Embrace experimentation
Finally, foster a mindset of experimentation. Run a series of small-scale pilots to test various interventions. Approach this with humility and scientific rigor, acknowledging that adjustments may be necessary, and that success is rarely straightforward.
This approach, while it may sound daunting, is actually quite manageable. By embracing the challenge with the curiosity and methodology of a scientist, you can pave the way for genuine and lasting improvements.
Moving forward to an ethical environment
Today’s business leaders are navigating a multitude of hazards, ranging from rising geopolitical tensions, rapidly evolving AI-driven technology, and society’s shifting attitudes and expectations. Yet, in these challenges lies an unprecedented opportunity for leaders to redefine their legacy by embedding ethical principles deeply into the heart of their organizations. In this way, business leaders can turn these risks into sources of long-term competitive advantage.
You can find out more on how organizations are working to foster ethical environments within their workplaces here
