Ask or direct a staff member to do something unethical, and you place the person in an untenable position of great risk. How many will muster up the courage to challenge their supervisors?

If they do the right thing, will they face possible job loss or retribution? Or do they go along with the hope that doing so will preserve their employment?

And if the unethical conduct is later revealed, how do they know for certain that they too won’t be held accountable for their actions? Those who create ethical dilemmas for their employees demonstrate a complete failure of leadership.

How do leaders do this? The Machiavellian types take the bold approach and just order their direct reports to do things that are clearly unethical. Faced with a direct order or the opportunity to please the boss, who wouldn’t comply?

The Subtle Slide

The vast majority of ethical dilemmas are created by leaders in a more subtle manner. It’s the friendly request for assistance on a personal matter.

The lack of clear communication, often accompanied by a sense of urgency to get it done, sends the tacit message to staff that it’s okay to violate a rule or policy. In this instance, to accomplish the leader’s desired outcome.

Perhaps it is a pattern of a leader’s noncompliance with organizational protocol that leaves staff with the impression that the leader is actually exempt from the rules. This can include a leader’s failure to act on information delivered to the leader by staff, and a leader’s failure to respect boundaries. Worse yet are those requests that are implicitly coercive.

• Here are just a few real-world examples for consideration:
• A New York State Supreme Court Justice was recently censured for using public resources for personal gain. The judge repeatedly had staffers pick up her child at school and then babysit either in the courthouse or at her home. She also had her office staff drive her on personal errands.
• A city manager obtained a $10,000 unsecured, below-market-rate loan from the city to use as a down payment on a home. The loan, which was not outlined in the manager’s employment agreement, was never approved by city council. When the request was submitted to finance, the check was issued. All of this was later disclosed by a district attorney’s investigation. The city attorney also had full knowledge of the loan.
• An audit of county-issued credit cards revealed numerous personal charges made by the county manager to the county card. It was a clear violation of county policy. The personal charges were hard to miss since they included doctor visits, clothing purchases at major retail outlets, and items for the home.

  Yet the credit card bill was paid each month, often without receipts, explanation, or reimbursement of the personal expenses.

• In a case from the past decade, the former city manager and deputy city manager of San Diego each paid $25,000 in financial penalties for their roles in misleading investors in municipal bonds. The Securities and Exchange Commission (SEC) charges alleged these officials and others knew the city had been intentionally underfunding its pension obligations so that it could increase pension benefits but defer the costs.

The charges also alleged that they were aware that the city would face severe difficulty funding its future pension and retiree health care obligations unless new revenues were obtained, benefits were reduced, or city services were cut. The SEC alleged that despite extensive knowledge, they failed to inform municipal investors about the severe funding problems in bond disclosure documents.

The city manager signed the closing letter for one of the bond offerings, falsely certifying that it was accurate and did not contain any misleading statements. The deputy regularly reviewed and revised the false and misleading disclosure documents, and signed the closing letter for two of the five bond offerings.

In doing so, the deputy falsely certified the disclosures as accurate and not containing any misleading statements. She also reviewed and made presentations to the rating agencies.

Culture Matters

There are more facts that make each of these situations unique. But each shares a common thread: In the face of unethical conduct by the leader, opportunities for staff to intervene to stop that conduct were ignored.

From the individual asked to pay a bill or issue a check in violation of city policy to the department director who had oversight responsibilities, all failed in their ethical responsibility to act. What about all the others who, while not central to the drama, certainly had knowledge of the activity? Why didn’t they intervene?

The takeaways from these examples? Leaders, it is not all about you! Consider the impact of your conduct on the employees and the organization before you act. Don’t create ethical dilemmas for your staff.

Lastly, work to ensure that your organizational culture empowers employees to challenge unethical conduct no matter where it comes from.