Understanding (and Preventing) Ethical Leadership Failures

Ethical Failures

By Linda Fisher Thornton

Understanding What Causes Ethical Leadership Failures

Ethical leadership failures can be caused by different types of problems that may compound. Some of these problems are individual and others may be embedded in the organizational culture.

In 7 Lenses, I describe the kind of proactive ethical leadership that builds ethical cultures. The book is a road map for how to lead ethically in a complex world. While 7 Lenses is written from a positive perspective to help leaders avoid ethical problems and create ethical cultures, I often get asked “What causes ethical failures? What goes wrong?”

So this week I am exploring that question from two perspectives – that of what individual leaders do (or don’t do) and common organizational problems.

Individual and Organizational Causes

Here is a starter list of some of the factors that can lead to ethical failure. The list includes things that individual leaders do (or don’t do), and things that organizations do (or don’t do) to set a positive example and support ethical thinking and behavior.

These factors are connected, and it is often difficult to isolate just one of them when something goes wrong. See if you recognize any of these happening in your organization.


Ignoring  Boundaries (Ignoring Ethics Codes And Organizational Values That Forbid An Action)

Failing to Use Self-Control (“I Will Do This Even Though It’s Not Allowed”)

Entitlement View (“I Definitely Deserve This Even Though It’s Not Allowed”)

Prominent Personal Values (“I Think This Is Really Fine To Do Even Though It’s Not Allowed”)

Crowd Following (“Everybody Else is Doing It, So It Must Be Fine”)

Lack of Moral Compass (“Nobody Specifically Said That I Can’t Do It, So It Must Be Fine If I Do It”)


Lack of Clarity (“What Does Ethical Mean Around Here?”)

No Ethical Leadership and Behavior Standards (“There Are No Rules About This”)

Oversimplified Rules (“Just Do the Right Thing”)

Lack of Positive Role Models (“Who Is Doing It the Right Way?”)

No Training or Coaching (“How Will I Learn It?”)

No Accountability, No Enforcement (“Nothing Bad Happens If I Do It, Even Though It’s Not Allowed”)

No Performance Integration (“We Say We Want Ethics, But We Reward and Promote Based on Sales and Output”)

When Problems Happen, Scapegoats Are Quickly Fired (Instead of Learning From Mistakes and Fixing the Culture)

Compounding Factors

Keep in mind that ethical failures may or may not be due to just one of these factors, but several that compound to create a ripple effect. Here are a few examples where the problem is worsened due to a combination of factors.

  • There are no ethical leadership standards and no positive role models (no way to be sure what to do)
  • A leader has an entitlement view and there is a lack of clarity about what ethical leadership means in the organization (it is easier to justify entitlement, when ethical expectations are unclear).
  • A leader lacks a moral compass and the organization lacks ethical leadership standards (the leader may act based on personal ethics, which may be slanted toward self-gain).
  • A leader has trouble with ethical boundaries and there is no accountability for ethical behavior in the organization (It increases the chances of ethical problems when both the leader and the organization lack clear ethical boundaries).

Problems within the ethical culture clearly make it harder for individual leaders to stay on an ethical path.

Preventing  (or Identifying and Correcting) These Problems in Your Organization

Now imagine what can happen when you have 3 or more of these factors (and perhaps others not named here) happening at the same time. Each additional factor can make it easier for problems to develop. Our goal as leaders is to prevent the problems that lead to a failure of ethical leadership. To do that we need to start talking about the dynamics that cause ethical problems and how to keep them from happening in our organizations.  How do we start the conversation? Talk candidly with leaders at all levels about issues named above that may have become a problem in your organization. For a detailed conversation guide, see Leading the Conversation About Ethical Leadership. For an understanding of how to manage ethical performance in the organization see Managing Ethical Leadership as a Performance System.

Feel free to name additional factors that you have observed that can lead to ethical failure in your comments. 


For more, see Linda’s book 7 Lenses and the 21 Question Assessment: How Current is My Message About Ethics?

7 Lenses is a Bronze Axiom Business Book Award Winner in Business Ethics41cEVx-Tu4L._SY344_BO1,204,203,200_
2014  Bronze Axiom Business Book Award Winner 
About 7 Lenses
Info@LeadinginContext.com  @leadingincontxt  @7Lenses

© 2014 Leading in Context LLC 



  1. Hi…..Don’t you think its high time we talk about SPIRITUAL INTELLIGENCE which can prevent unethical behavior in the leadership.


  2. Robyn, Yes, I’m seeing widely different interpretations of what ethical responsibility includes in the US, although globally there is a strong movement toward taking responsibility. What specific differences are you seeing?


  3. From what I’ve seen, and I’m very curious how scewed my viewpoint may be; but it seems as though the issue of ethics is radically different (if not almost missing) with the current entrepeneurships/start ups vs European companies, multi-nationals and American companies. I would be hard pressed to begin to equate ethics the same across the board. Suddenly back in America I’m finding the pov’s radically different, thus ethics widely divergent.


  4. That’s a great question, Michelle. I think the weighting or the possible negative impact will depend on the context. For example, if one leader is not a good role model, but the organization has clear expectations and performance integration around ethics, that is not as bad as having a leader who is unethical in an organization that has no ethics infrastructure or performance integration. The negative impact of the leader in the second example could be much greater.


  5. Great insights. When I think about my persona experience with organizations, the area that seems to be the largest stumbling block that I have experience is “No Performance Integration”. It is my belief that if we could fix that one, many of the other areas would improve. Do you believe that any of them are more heavily weighted than the others?


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