Introduction
Many organizations continue to operate under a conditional ethic. It’s important, but only if it doesn’t affect the CEO. It’s valuable, but not if it complicates internal politics.
The Viral Incident: Coldplay Concert and Astronomer’s Response
A viral video from a Coldplay concert captured Astronomer’s CEO, Andy Byron, and HR director, Kristin Cabot, in an awkward embrace. The video went viral, prompting both to “resign.” No legal scandal or formal complaint was involved, but the damage to credibility had already been done. The video exposed the gap between a company’s declared values and its leadership’s daily practices.
Internal Inaction: The Power of Silence
Before this public incident, no internal action was taken. No employee activated the reporting channels. Why? Because silence remains the most spoken language in many corporate cultures. Despite investments in culture and ethics, the belief persists that “it’s better not to speak up if it involves someone high up.”
A Different Story: Nestlé’s Action on Ethical Conduct
In contrast, Nestlé recently dismissed its newly promoted global CEO, Laurent Freixe, due to an undisclosed relationship with a subordinate. The issue came to light after several employees filed formal complaints through Nestlé’s internal “Speak Up” system. The potential for favoritism, harassment, or conflict of interest was thoroughly investigated, and the code of conduct was applied regardless of rank, tenure, or potential.
The Global Ethical Landscape
According to Ethisphere’s 2024 Ethical Culture Report, only 50% of employees who witness unethical behavior report it, despite 93% saying they would. The DDI Global Leadership Forecast reports that employees who distrust high management are 44% less likely to report unethical behavior.
A recent Scielo study in Mexico found that 51.1% of surveyed organizations lack an ethics code. The DDI report also shows a 17-point drop in employee trust of immediate managers from 46% in 2022 to 29% in 2024, indicating growing skepticism towards leaders.
The Need for Robust Ethical Cultures
In a BANI (fragile, anxious, non-linear, and uncomprehensible) world, ethical codes and complaint boxes are insufficient. Ethics must be tested at the margins, where no one knows whether to speak up or stay silent.
Harvard Business Review emphasizes that psychological safety, leading to a 27% increase in innovation and productivity, is crucial. Deloitte asserts that ethical and consistent leaders are the primary factor in building reliable organizational cultures. LRN quantifies this value, stating that companies with strong ethical cultures outperform their peers by 40% in satisfaction, loyalty, innovation, and sustainable growth.
The Root of the Problem: Culture, Not Lack of Rules
The problem lies not in the absence of rules but in culture. It’s about trust—or the lack thereof—to know that the organization has the character to act, even when the dilemma involves its most powerful members.
Five Questions to Safeguard Your Organization
- Are our leaders prepared to model ethical behavior? Knowing the code isn’t enough; they must embody it. Do they receive training in moral discernment and power management? How do they react to ambiguity?
- Do employees believe they can speak freely if something is wrong? Measure psychological safety perception. How many use reporting channels? Do they trust fair consequences? Silence culture is the first sign of ethical vulnerability.
- Do our protocols address real-life scenarios, like personal relationships between leaders and subordinates? Avoid ambiguity. What does your code say about hierarchical relationships? Is it applied equally to all, or are there implicit exceptions for high executives?
- Do we periodically audit whether our proclaimed values are practiced? Go beyond compliance. What behaviors are tolerated silently? Is the ethics committee empowered or merely symbolic?
- Are we measuring and improving our organization’s ethical culture? Ethics isn’t left to chance. Do you have cultural attribute indicators? How often do you conduct pulse surveys, focus groups, or ethics perception audits? Do results impact reality or get archived? Are these indicators part of board conversations?
Conclusion
Organizational ethics isn’t measured by what’s preached in boardrooms but by what’s tolerated in hallways. When those hallways are filled with known but unnamed secrets, culture becomes complicity.
Key Questions and Answers
- 1. Are our leaders prepared to model ethical behavior? Leaders should not only know the code but embody it through moral discernment and power management training. Their reactions to ambiguity should demonstrate ethical leadership.
- 2. Do employees believe they can speak freely if something is wrong? Measure psychological safety perception. Encourage the use of reporting channels and ensure employees trust in fair consequences.
- 3. Do our protocols address real-life scenarios? Clearly define hierarchical relationships in your code and apply it equally to all, avoiding implicit exceptions for high executives.
- 4. Do we periodically audit our ethical practices? Conduct regular ethical and cultural reviews beyond mere compliance to identify and address tolerated behaviors.
- 5. Are we measuring and improving our ethical culture? Implement indicators, surveys, and audits to gauge and enhance your organization’s ethical culture.
