Career Coach: Ethical lapses in leadership

"The time is always right to do what is right." - Martin Luther King Jr.

The other day I was walking my puppies. As I was cleaning up after them, I thought about how this experience was a lot like ethical issues leaders face.

If you think about it, some people never clean up after their dogs (clear rule breakers). Others clean up after their dogs only if someone else is watching them.

Others pretend to clean up after their dogs if someone is watching them (definitely deceitful). And then there are those who clean up after their dogs, whether anyone else is outside or not (rule followers or those with a code of ethics). The analogy is overly simplistic, but telling.

Ethical issues for leaders range from clear-cut to murky. But leaders need to have a moral compass to follow. They especially need to be careful not to fall down the slippery slope.

What do I mean by this? Researchers have determined that once leaders take small, unethical actions, it becomes easier and easier for them to justify larger infractions, and before you know it, they have fallen down the slippery slope. Maybe they initially add a few extra items to their expense account, then they figure "everyone else is doing it."

Then they change their airline ticket to first class (charging the company) or charge the company for their clothes ("I need these to look good on my job."). What's interesting is that they might not even know they are starting their slide because they rationalize what they are doing ("It's not that much money.").

When discovering unethical behaviors in their organizations, leaders need to look at the overall picture and think about how they may have contributed to the problem. Most companies do not do this. They focus on the person who lapsed rather than how the company may have set up the conditions for the behavior to occur.

Culture is what drives behavior, more so than rules and guidelines. People are susceptible to the social norms in the environment. If the ethical standards are low, even the best of employees might be tempted to lower their standards.

What can organizations do to ensure that their employees and leaders don't fall down the slippery slope?

The company needs to have a strong ethical culture where misconduct is clearly defined.

Issues of ethics need to be a part of the company's vision statement, speeches and everyday communications to employees. Indeed, they should be part of the firm's identity.

Leaders have to see problems as "ethical." Sometimes they simply evaluate situations in terms of a formal cost-benefit analysis without even considering the ethics of the situation (e.g., laying off people without providing placement help). This has been referred to as "ethical fading" by some researchers.

Review the structural issues in the company related to financial reporting, corporate governance and industry regulation. There might be problems here that lead to unethical behaviors among employees.

Discussions and training should be held annually (at least) to talk about ethical issues that employees and managers face and best practices and tips for dealing with them.

Leaders have to address small ethical lapses quickly before they grow into bigger issues. If employees see that even smaller ethical issues are addressed, they will be less likely to continue unethical behaviors and especially less likely to commit even larger ethical problems.

Incentives must exist for adhering to good ethical behaviors. Review your incentive system since often companies unknowingly incentivize folks to commit violations (e.g., they make completing expense forms so complicated that employees just make things up to get the forms filled out).

Ethics and compliance cannot be seen as owned only by the ethics and compliance department. It has to be woven into every department.

Make sure that employees see the benefit of not only behaving in appropriate ethical ways, but in reporting unethical lapses by others. They should be encouraged to push back on leaders or fellow employees who are behaving unethically. If we think about all of the bad behaviors that have taken place in businesses over the past decades (e.g., Enron, Tyco, WorldCom), we have to figure that many employees knew what was going on in these companies, but chose not to speak up. Leaders need to make sure they have people nearby who will not be "yes men," but instead will serve as devil's advocates.

Ethical dilemmas are here to stay. As leaders, we need to create work environments where people can easily tell when they are falling down the slippery slope. We need to be there to help prop them back up, not encourage them to fall down the slope faster. We can do it, and we must.

• Russell is the vice dean and the director of the Executive Coaching and Leadership Development Program at the University of Maryland's Robert H. Smith School of Business. She is a licensed industrial and organizational psychologist and has more than 25 years of experience coaching executives and consulting on leadership and career management.