Deloitte warns leaders: ‘Ethical lapses arise amid weak workplace cultures’

Four-in-five board members and C-suite leaders believe that CEOs are responsible for driving ethical leadership at an organization, according to new research from Deloitte.

Ethical leadership should therefore be a shared responsibility across the organization, but it needs to start from the very top. 

For this to be achieved, organizations should follow what Deloitte has dubbed the four Es: Expression, engagement, empowerment, and evaluation.

To find out more, UNLEASH spoke exclusively to Deloitte’s Chief Ethics Officer Lori Pressler.

Discovering the foundations of ethical leadership

As a CEO’s leadership plays such an integral part of creating an ethical culture, Pressler began by outlining that when CEOs model “corporate values and ethical principles”, the C-suite and board can “more effectively cascade those values,” projecting them across the business.

“It is essential to place integrity first and communicate that throughout the organization. Without this North Star, it becomes harder to normalize ethical principles and accountability,” she adds

“Ethical lapses don’t tend to be isolated incidents. They arise amid weak workplace cultures.” 

Although an overwhelming majority of board members and C-suite leaders surveyed by the Society for Corporate Governance and Deloitte say trust directly affects their business relationships, almost half of professionals say their boards provide no dedicated oversight of corporate culture.

Additionally, only around one-third say that their boards proactively monitor ethical trends within their organizations. 

“This should be a wake-up call for leaders, as dedicated, thorough, and routine oversight of culture is a simple, impactful, and strategic way to help promote trust, improve relations in the marketplace, and protect the organization’s brand and reputation,” Pressler highlights. 

She continues to explain that a way in which leaders can accomplish this is through the four E’s of ethical leadership: 

• Expression, or tone at the top
• Engagement, which is learning and training
• Empowerment within a speak-up environment
• Evaluation, which is measuring impact

Each of these four pillars help to work as ingredients to create an ethical culture that contributes to an organization’s overall health and success, while reducing its exposure to risk. 

Although the report highlights that “no organization is immune to ethical dilemmas” the four pillars provide a way of protecting its brand and reputation.

For HR leaders to achieve this successfully, Pressler suggests that they must collaborate closely with CEOs to embed ethics throughout the organization’s culture core. 

Understanding that ethical leadership is not only a moral imperative but a business one, talent leaders can serve as a conduit, communicating to the workforce that ethics are both valued and expected,” Pressler explains. 

“Talent leaders can help promote expectations with new hires from day one, remind existing employees of these expectations, support multiple reporting channels for voicing ethical concerns, and routinely assess the organizational culture to ensure it is meeting the needs of an evolving workforce in an increasingly complex business environment.”

With these tactics, leaders can proactively elevate their ethical culture, positioning the organization to help pre-empt concerns before they arise – and to respond swiftly and effectively when they do.