Today, many employees grumble when their leaders discuss being ethical. During the massive economic downturn, many executives got rewarded for underperforming. For example, Fannie Mae’s CEO Michael Williams and Freed CEO Charles Haldeman Jr. were slated to receive up to $6 million each for 2009 despite the companies’ poor performance. Yet, it cost the American taxpayers more than $100 million for these company bailouts. With the continual unethical behavior of several executives, American workers are more cynical about their leaders than ever.

Ethics plays a critical role in good leadership. Ethics is defined as the code of moral principles that governs the behavior of a person or group according to what is right. Richard Draft, an organization management expert, explains that leaders at the highest management levels develop internal moral standards that can often allow them to break laws if necessary. 

For many organizations, it is the proverbial “doing as I say and not as I do” for some managers.  Most managers can get away with this philosophy. As businesses continue to falter and competition begins to bear down on the economy, workers are looking for leadership. However, it is virtually impossible to lead an organization if you’re unethical. Unfortunately, it only takes one bad manager to destroy the core values of an organization. Here are some ways to identify an unethical leader:

This unethical leader…

1. Leads with a bad attitude
2. Lies to his followers and peers
3. Takes advantage of people
4. Takes personal credit for group accomplishments
5. Uses politics to gain power in an amoral manner
6. Does not focus on the common good of the organization
7. Does not support his followers
8. Displays a “double-tongued” behavior
9. Sacrifices his followers for personal gain
10. Fails to model the way for followers

Emerging leaders cannot afford to behave unethical. People become less trusting of organizations and people. People, especially leaders, need to act in a manner that sets the example for the rest of the organization. Therefore, it can be concluded that effective leaders must be careful to stay humble and have accountability mechanisms in place so that they won’t hit any ethical mine fields. Organizations can’t afford to wait.

Can today’s unethical behavior be stopped? If so, how? If not, how can today’s organizations minimize their losses?