Employees Noticing Leaders Receive Special Protection for Unethical Behavior

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The news is plump with regular stories about leadership acting in ways that is unethical. While organizations get named and stained by the media and public, the brunt of the negativity falls on the particular person, an executive. Maybe, however, responsibility also belongs on other people.

“HR and boards are responsible for creating a highly ethical culture in the company and should lead by example when it comes to setting the ethical tone in a company,” says William Taylor, a Career Development Manager at VelvetJobs, an employer branding, career path guidance and job search facility.

“Both HR and the board are required to take action against anyone found going against the ethical edicts of the company regardless of the role the individual has in the company,” he says.

Employees observe closely and often don’t feel the poor behavior of leaders is viewed the same as transgressions they might commit. They also don’t believe leaders are often corrected and when necessary, punished the same as another employee would be for egregious behavior.

It might appear HR and a board of directors are enabling and giving a pass to misconduct that harms employees and possibly, numerous or all stakeholders.

(William Taylor, Career Development Manager at Velvet Jobs)

“I find that in many companies, the HR and Board simply pay lip service to the ethical policies of their organizations,” says Taylor. “They create ethical policies for public perception and legal purposes but rarely do they enforce these policies when it comes to leadership transgression.”

This impression of a selective governance can be confusing and maddening to employees watching as clearly wrong behavior is allowed to develop and often, thrive. This is not uncommon. It’s something that is very human, according to one legal expert.

“People are good at convincing themselves that everything is okay, despite troubling indications. Sometimes it is easier to ignore warning signs than to face the harsh reality,” writes Michael Volkov, an attorney and writer of the blog Corruption, Crime & Compliance.

Indifference or denial are dangerous mindsets and beliefs to emerge. They infect decision makers who have the power to do something positive in response but choose not too, thus role modeling poorly. This doesn’t go unnoticed within organizations and it creates distrust, resentment and lost credibility with HR or boards. At times, it leads upset employees to hold themselves less accountable for expected behavior.

“Sensitivity is hardly cultivated, issues are not given due prominence in the workplace and the perception that some senior employees are untouchable and beyond reprimand becomes part of the culture,” Taylor says.

When employees see that management is not conducting successful governance, they can occasionally feel compelled to speak up against misconduct, even knowing that grave risks to their reputation, job security and financial safety is significant. Fear is real, even for the most courageous of employees.

“There is also hardly any protection offered to whistleblowers in such organizations,” Taylor says.

Employees and media have come to a conclusion: boards and HR are not willing to do their jobs for all too familiar reasons.

“Punishing senior leaders for ethical transgressions may be perceived as rocking the boat and there are instances whereby the leader is too big to punish, especially if huge amounts of profit are at stake,” Taylor says.

There is also the possibility that those enabling top-level leadership are part of the unethical behavior themselves.

“There are situations whereby some members of the board and HR are actively engaging in violating corporate ethics. In such a scenario, they would rather cover up for the leader than expose themselves and their wrongdoing,” Taylor says.

Improvement is possible when it’s deemed important or critical. At that point, ethics matter, governance occurs and steps towards the honorable character and alignment of words with actions takes place.

For it to happen, character, courage and consistency have to happen. Oversight is critical. Prompt responses to misconduct, regardless of who it is, must occur. The fact is quality of reputation inside the organization is a must if there is to be trust, credibility and healthy relationships with employees.

“HR needs to actively cultivate ethical awareness and sensitivity from the word go, i.e. from selection and recruitment, to onboarding, performance reviews, conflict resolution, rewards and promotions, and reprimanding of employees,” Taylor says.

In the minds of employees, organizations have to decide if ethics, governance and compliance are just words to those in authority and hammers to hold over the rest of the people. Do rules and risks apply to everyone or just those without much power?

“Secondly, any ethical conflicts should be addressed with the seriousness they deserve and according to the ethical edicts the company has created,” Taylor says. “In addition, HR needs to actively provide ethical training to all employees on a regular basis.”

Doing this can help keep ethics in the forefront of people’s minds, drive home the standards, show what ethical behavior looks like and how it is practiced and accomplished. This is an important immersion for every employee, not just those working below top level leadership.

Michael Toebe is a reputation specialist who helps individuals and organizations. He writes Red Diamonds Essays and Reputation Specialist Essays (both on the Medium platform) and analysis and advisory for online publications: Chief Executive, Corporate Board Member, New York Law Journal, Corporate Compliance Insights and Physicians Practice. He also publishes on LinkedIn and beBee and is the voice of the Red Diamonds Podcast.

Michael Toebe is a specialist for reputation, scandal and crisis, writing about organizations and individuals.

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