Employee Views of Leaders’ Personal Conduct Drives Perceptions of their Ethical Leadership, ERC Study Says

December 11, 2014

Workers Judge Leaders Primarily by Three Factors

ARLINGTON, Va. – Corporate leaders who are perceived by their employees as demonstrating strong personal character are much more likely to be perceived as setting a strong tone from the top, the Ethics Resource Center (ERC) said in its new research, “Ethical Leadership: Every Leader Sets a Tone.”

The most significant factor in ethical leadership is personal character, ERC concluded. Drawing on detailed analysis of data collected as part of its National Business Ethics Survey (NBES), ERC also found that employees in every size of company judge leaders primarily on the same three factors – character as experienced through interactions, how they handle crises and the policies and procedures leaders establish to manage the company.

“It is often said that a strong tone for ethics begins at the top,” ERC Chief Executive Officer Patricia Harned said. “The value of this report is that it specifically identifies the most important things that leaders can do to set that tone.”

ERC also found, however, that direct supervisors also can have a significant impact when comes to modeling good behavior, keeping promises, and upholding company standards. It concluded that ethics is increasingly a 24-7 job because workers expect their managers to behave ethically off the job as well as in the workplace.

“Everything a leader does sets a tone,” Harned said. “Leaders and companies need to recognize that the line between public and private gets less clear every day.”

ERC recommended that companies that want to support strong ethical leadership should:

  • Seek out personal character when hiring and make 24-7 integrity a job expectation.
  • Educate managers about the way employees evaluate leaders
  • Encourage leaders to share credit for success and seek honest feedback from employees.
    Annually review business objectives and policies to ensure they promote ethical performance.

The report “Ethical Leadership: Every Leader Sets a Tone” was made possible in part by a generous contribution by our sponsor, the Raytheon Company.

The executive summary of the report is available at www.ethics.org/nbes/leadership/.