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6 Reason Why Some Companies Will Never be Ethical

Studies show that the most ethical companies are also the most profitable and attract the best employees. Don’t let these subtle mistakes derail your culture.

By Christopher Bauer, CEO, Bauer Ethics Seminars

Posted by Christopher Bauer on November 17th, 2020

No legitimate company ever sets out to be unethical. Yet, no matter how terrific their intentions, some companies will simply never be able to create and maintain a culture that truly or fully supports ethics.

There can be myriad reasons for well-intentioned organizations to have serious ethical problems, of course. However, here we’ll look at six of the reasons I’ve found the most frequently – and many times the most subtly – that companies fail to be able to foster ethical behavior.

Poorly or Inaccurately Stated Values

Every company will tell you that they stand for all things good and honest. Many really mean it. However, you can’t create an honest and ethical culture if you rally employees to align their behavior with values that don’t actually clearly and accurately state what your company stands for.

In other words, if your stated values don’t really align with your most important, most persistent priorities, employees will forever be asked to do/say things contrary – or at the very least, inconsistent – with what you’re telling the world matters most to you. That lack of alignment between ones’ stated values and behavior is, virtually by definition, the foundation of a culture contrary to ethics.

At the very best, it’s confusing for your customers and that’s, really, already reason enough to avoid this problem.

 

Reinforcing Productivity Over Quality

It’s pretty simple – people do what’s reinforced. Once you are rewarding employees, or yourself, for numbers rather than quality work, what will you see? I promise you, the numbers will go up.

However, when productivity is valued more than quality, two things happen. The first is that quality will almost certainly take a hit. It might be sooner or it might be later but this really will happen. It always does.

The second thing that will happen is that this sets the scene for employees to start fudging the numbers and that never ends well.

Does this mean that you shouldn’t focus on productivity? Not in the slightest! After all, no organization can survive in the long run without sufficient productivity. It just means that quality has to be rewarded far more – and far more conspicuously – than the numbers.

 

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‘Profit Before Ethics’ Rather Than ‘Profit With Ethics’.

Just like every company needs to maintain a focus on productivity, so must they make sure they are making money. That’s not unethical – it’s what keeps them alive and growing.

However, there is a significant difference between creating profit ethically and putting profit before ethics. Sometimes the difference between the two can be tougher to see than you might think. So be vigilant – constantly – about this one.

 

“Of Course We’re Ethical. We Have a Great Compliance Program.”

Too many companies still can’t tell you the difference between ethics and compliance. Related as they are, they are two very different things. Compliance has to do with assuring that all necessary rules and regulations are followed. Ethics have to do with assuring that your company’s behavior aligns with the values you say you have.

Ethics go well beyond simply following the rules. Know the difference and be sure you’re really attending to ethics and not simply attending to compliance and thinking you’re doing both.

 

Over-Reliance on ‘Tone From The Top’

We’ve all heard that ‘the fish rots from the head’ and that tone at the top is the true lynchpin of ethical cultures.

I’ll agree that there is, indeed, little that’s more important. HOWEVER, ethics are truly everyone’s responsibility. At every level of every organization, there are unique opportunities to spot ethical concerns and everyone must be trained to know how best to both recognize and respond to them.

Unless and until that training occurs, an organization is at waaaay higher-than-it-should-be risk for ethical problems of every imaginable shape and size.

“We’re Good People. What Else Do You Need?”

It’s true – good people set out to do good things. However, it’s also true that even good people can fall off the ethical path. Good intentions need to be applauded but when they mask unethical actions, those intentions don’t count for much. In fact, they don’t count at all.

Every organization, regardless of its size, type, or mission, needs to build in safeguards against unethical behavior. This involves identifying clear and accurate values, creating appropriate oversight for EVERYONE in the organization to assure that everyone’s actions actually align with your stated values, and attending to each of the areas already mentioned here in this article.

 

Do You Have an Effective Whistleblower Policy?

The best way to tell whether your employees are acting ethically is by gathering information from within the ranks. A whistleblower policy encourages employees to speak up when they see ethics violations.

Download the Whistleblower Policy Template

Are these six areas sufficient to create a culture that drives ethical behavior? Hardly. However, they make for a great ‘starter’ set of areas to which you must attend. A lapse in any one of these areas lands you, almost automatically, into being an organization that – no matter how great your intentions – will be unable to create or maintain a culture of ethics.

Christopher Bauer
Christopher Bauer

Ethics Expert

Christopher Bauer is a clinical psychologist by training with over twenty-five years of experience as a speaker, trainer, author, and consultant on professional ethics and values-driven business strategies. He has worked with front-line workers to senior executives and everyone in-between.

Dr Bauer’s articles on how to build and maintain great professional ethics have appeared in CEO Refresher, CFO Magazine, Financial Executive, Internal Auditor, and many other publications. The latest edition of his book, "Better Ethics NOW: How To Avoid The Ethics Disaster You Never Saw Coming” has been a business ethics Top Seller on Amazon.com and he publishes a free “Weekly Ethics Thought” seen by thousands of readers worldwide. Dr. Bauer has been recognized with the both Certified Fraud Specialist designation by the Association of Certified Fraud Specialists and the Certified Speaking Professional designation by the National Speakers Association.

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