Organizations, whether for-profit or nonprofit, may be made up of ethical people who make decisions with unintended consequences that lead to unethical behavior. That is why Bombas and Boeing are such powerful images. Bombas, the apparel manufacturer, stakes its claim to quality apparel and for each piece a consumer buys it donates a similar product to a homeless shelter. Theirs is an elegantly simple business model, but one that speaks to consumers and others. Everyone, whether a consumer or the cleaning staff, can see a direct link between what Bombas does and doing well for other people. 

Is Bombas a perfect organization and ethical in every way? Probably not, although it’s safe to assume that they embrace their external message internally in the way they treat their employees and vendors. And it is worth noting that they’ve grown into a half-billion-dollar-a-year business in a little more than 10 years based originally on socks. Bombas paints a picture of light and hope.

Boeing provides a darker picture. If news reports are to be relied on, the leaders of Boeing made a series of cost-driven decisions intended to improve the bottom line, which steadily eroded quality, employee satisfaction and the safety of the flying public. Incrementally, the time allotted for performing tasks was reduced, quality checks were sacrificed in the interest of efficiency and the concurrent risk to passengers rose with every small time savings. No one intended that to happen, but it did and now Boeing faces dire consequences as the trust of the flying public has been shaken, more whistleblowers are appearing, leaders have been let go and, in all probability, a loss of revenue will follow. 

Can public trust be restored? Can Boeing’s leadership turn the quality ship around? Time will tell, and the task is daunting.

To be clear, while Boeing represents an example of a company that makes decisions that inadvertently turn out to be unethical—jeopardizing passengers’ lives is obviously an ethical issue—they also failed to consider the consequences of their acts, which is an ethical failing as well. And, while that may be true for Boeing, there are organizations—think of the NRA—where malfeasance is an intentional abuse of trust.

Extending the metaphor, who do you want to work for? Who do you want to buy from? And who do you want to invest in? The answer to each question appears blindingly obvious. Ethical companies that contribute to the greater good and mitigate the potential of catastrophic lapses are those that perform well and attract employees, customers and investors. 

Bombas and Boeing are alliterative metaphors. Many other examples exist. But the underlying conclusions remain: companies should strive to be ethical and make ethical decisions. For those that do, their performance on traditional metrics will be better and employees will want to be associated with them. Furthermore, the failure to be ethical can be dire if it becomes known publicly.

It’s common sense that organizations should want to behave ethically and, logically, having ethical organizations starts with having ethical leaders. Bearing in mind that many organizations are founded by leaders who are ethical, the question becomes “how can we hire or promote ethical leaders?” Fortunately, the answer is “yes,” although no process is perfectly predictive or infallible. 

To hire ethical leaders, several steps must be taken. 

1. Ensure potential ethical leaders are good leaders. This is essential. You can have the most moral person in the world, but if he or she isn’t a good leader, they’re not going to affect your organization. Fortunately, a lot of consulting organizations or your human resources staff can help with this step. Hiring leaders should be a systematic process in which your people are trained so that they’re all looking at the same criteria and collectively making decisions on the same basis. The first outcome of the process should be a determination of whether or not an individual will be a good leader. If they don’t pass that hurdle, don’t waste additional time or resources in evaluating them as ethical leaders.

2. Drill down to what makes ethical leaders. Integrity is a quality, but integrity isn’t the only criterion to evaluate in assessing a potential ethical leader. Beyond integrity, ethical leaders must, at a minimum, have a concern for distinguishing between right and wrong, be able to discern the various factors involved in making decisions and be willing to take a stand in the face of adversity. This means, in addition to integrity, an ethical leader must 1) display a moral mindset, 2) be able to demonstrate critical reasoning and 3) be willing to take a stand. Any selection system designed to produce ethical leaders must include those three competencies. Other competencies could be empathy as it relates to understanding how people will respond, and the ability to anticipate consequences, which is a subset of critical reasoning.

3. Focus interviews on past behavior. The best predictor of how people will behave in a new job is how they have behaved in the past. That’s true of ethical behavior as well. While some 99.9 percent of the population will say they’re ethical and moral, how they behave when faced with ambiguous situations or situations with multiple competing demands is the difference maker. Interviews need to be structured so that individuals are asked questions about past ethical decisions they’ve made. Interviewers also need to be trained to ensure they’re not leading the individual in a specific direction or judging answers during the interview.

4. Use multiple measures to evaluate ethical leaders. To evaluate a potential ethical leader or, for that matter, any leader requires multiple measures. While structured interviews are effective, the reliability and accuracy of the evaluation increase with each added measurement tool. Effective selection systems use a variety of psychometric tests to evaluate critical reasoning, intelligence and personality. The results of these instruments can be “mapped” onto the ethical leader competencies and provide another level of insight into a candidate. Additionally, moral dilemmas can be used during interviews to obtain another picture of how the candidate thinks about moral issues. Case studies with more complex situations and multiple potential decisions can be used in the same manner. Bottom line, the more tools used to measure performance as an ethical leader, the more accurate the decision to hire or promote. While more tools often mean more cost, the more critical positions are worth the investment.

Building and maintaining an ethical organization is hard work and requires constant attention and communication. However, the rewards for an organization that others see as ethical are significant. To maintain an ethical culture, ethical leadership is required, and ethical leaders can be suitably identified.


Richard B. Swegan

Richard B. Swegan is an author and the founder and principal consultant of ARCH Performance. With a background in human resources and safety, Rick provides consulting to a variety of organizations on the developmental needs of potential leaders. Claas Florian Engelke provides consulting services in the fields of leadership advisory, assessment, and development through Korn Ferry. He invites clients to question themselves in order to foster incessant learning and aspire to be the best versions of themselves. Their new book, The Practice of Ethical Leadership – Insights from Psychology and Business in Building an Ethical Bottom Line (Routledge, March 28, 2024), offers effective suggestions for developing ethical leaders. Learn more at ethicalbottomline.com

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Richard B. Swegan

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