by Danielle Collazo, Featured Contributor
The leadership team is responsible for setting the ethical culture of the company. An organization with a strong ethical culture can minimize risks, including social and internal risks, as well as improve its reputation, revenue and productivity. When leaders display ethics in their management style, it has a positive effect on loyalty and morale, and can attract top talent. Trust is the foundation of an ethical corporate culture, and leaders can build trust through defining the company’s values, facilitating open communication, and leading by example.
In a leadership training workshop I participated in, the trainer asked the group of supervisors “what do you think those who you supervise expect of you?” After 
brainstorming a list of answers (e.g., be organized, have industry knowledge, etc.), we were shown results from a survey that stated 88% of employees value honesty in their supervisors; honest surpassed traits such as intelligence, competence, and compassion. Therefore, in order for a manager to be an impactful leader they must cultivate trust and confidence in leadership among their team. Confidence in leadership can lead to a strong attachment and loyalty among employees which allows for higher productivity and dedication among the staff – two key components for a successful business.
Clarifying Values
Clarifying values within an organization is an important component to improve corporate integrity and create a unified vision within the organization. By clearly articulating corporate values to all employees, as well as stakeholders, business units can more effectively carry out the decision-making process to align with the company’s vision. Senior leaders of an organization should clarify values by communicating the code of conduct and expectations to managers, in addition to demonstrating these values in their own behavior. Executives can also reinforce values by rewarding outstanding ethics and integrity and adhering to a disciplinary system for those who make unethical choices.
Open Communication
Open communication is built by sharing information across the organization, also referred to as an organic culture, which is believed to create a higher level of trust among employees when compared to a flow of information trickling down the chain of command. Complementary to sharing information is transparency and straightforward responses to employees’ questions, both of which increase the trust level throughout an organization.
In addition to communicating business-related matters, managers can promote open communication by exhibiting concern for an employee’s well being. By showing sensitivity to non-business-related work concerns, managers will open the door for employees to discuss personal hardships that may indirectly affect their work performance. For example, if an employee is taking a lot of time off to care of an ill parent, a manager might be able to arrange for the employee to work remotely, but only if the employee is comfortable approaching their supervisor about the situation. In this example, the solution would increase productivity and alleviate stress for the employee, thereby increasing their loyalty and appreciation for the organization.
Leading by Example
When senior leadership commits to practicing what it preaches, the level of adherence to company policies will increase, which will enable the company to remain ethical. Ethical behavior begins by setting the tone at the top, and should begin with enforcing the company’s Standard Operating Procedures (SOPs). SOPs, the nucleus of a quality system, ensure standardization and consistency, and serve as a way to minimize errors and prevent inefficiencies (e.g., duplicating work, using incorrect formulas, etc.). In my experience, a “bad apple” at the top of an organization that does not comply with these procedures can quickly spread this non-compliance down the command chain, and destroy the reliability of quality systems by projecting the idea that SOPs are not mandatory. In an ethical culture the “do as I say, not as I do” concept is unacceptable.
A quality system, from which SOPs are developed, is comprised of the processes, responsibilities, and structure for maintaining standardizations, controlling output, and validating statements. Further, quality is not value added, but rather a foundational and essential component for businesses. An organization must develop corporate-wide standardization methods, and leadership has the responsibility of demonstrating appreciation and compliance for SOPs, as well as reinforcing the importance of SOPs to maintain a quality system on an ongoing basis. The long-term effects of employees not complying with standardizations include barriers for transparency, disallowance of work reproducibility, and diminishing consistency among business units, which can serve as a breeding ground for unethical activity.
Establishing Trust
Trust is the key component of business relationships. When trust exists between employers and employees, the feeling of bureaucracy is avoided, creating a relatively flat and unified culture. A group of individuals that believe everyone is working toward the company’s mission will facilitate collaboration, a functional chain of commandment, and a positive work environment.
Organic trust is achieved when leaders adjust their behavioral styles to build a culture based on ethical values. Noreen Kelly, Executive Coach and Consultant, discusses 8 ways leaders can adjust their own behavioral styles to promote trust:
● Live the values
● Tell the truth
● Communicate, Communicate, Communicate
● Be in integrity
● Be authentic
● Be accountable
● Be transparent
● Share information
● Do the right thing.
What happens when a manager cannot discuss a company matter and an employee approaches them about it?
It’s simple – be honest by saying something along the lines of “I can’t discuss that information about that at this time, but I can assure you that leadership will handle the matter in a fair way in the company’s best interest.” This is an authentic, truthful answer that employees will respect, and it also demonstrates that the manager is a trustworthy individual through their respect for confidential information.
The following responses can cultivate distrust and should be avoided:
● Politically charged tangents that do not acknowledge the question asked
● Telling the employee that it’s nothing for them to be concerned about
● Saying you are out of the loop when you are not.
The above response types can destroy trust and be seen as disrespectful from an employee’s point of view. If a manager is involved in managing the dissolving of a business unit and claims they know nothing about it when approached by an employee, down the line when the news is announced, there’s a strong chance it will surface that the manager was very involved in the planning process. The employee will remember this and lose confidence in the manager. Moreover, giving an employee a false sense of security can cultivate a culture of paranoia and conspiracies, creating a divide between the professional and executive staff and undermining the company’s goals.
Trustworth leadership takes ownership of their actions, maintains authenticity, and is accountable for their actions and the direction of the organization. For trust to exist at all levels of the company, it must be celebrated and evident through the tone at the top before it is adopted by the entire organization.
