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by Katherine Dunn
How can a company avoid an Enron-style collapse?
There is one obvious answer: companies need ethical business leaders. According to John Joseph at the Wharton Center for Leadership and Change, top managers must not only preach the company's code of ethics to staff but also be dependably scrupulous, above board, and honest in their own business dealings.
Spencer Stuart comment
Spencer Stuart consultants agree, saying that a company's ethics should always flow top down. "Leaders are not only responsible for strategy and bottom line financial performance but for setting the moral principles, standards, and mores for the company," says Stamford, Connecticut-based consultant James M. Citrin. "Leadership is all about setting the bar and holding people accountable."
Spencer Stuart comment
James Citrin says, "People look to their leaders for signals as to what is appropriate and acceptable behavior in an organization and actions speak louder than words. In fact, economists call this phenomenon, 'revealed preferences,' when people’s actions are more important than words."
How can you position yourself as an ethical leader?
"The best business leaders not only set the ethical tone for their organizations with their clear words in support of the highest conduct and standards, but more importantly, lead by example," says Citrin. "It is about having complete consistency in everything you do as a person - no dissonance between words and behaviors - and consistency between your own behaviors and those of the organization."
"In the current environment, the best companies and business leaders have again committed themselves to looking at ways to support the right behaviors. Mission statements are being revisited and new standards discussed. But keep in mind that the current environment is also one of the most competitive in business so companies don’t have a lot of extra time to sit around and talk."
In light of recent corporate scandals, employers may look more closely at a potential employee's past ethical conduct.
What, specifically, are employers looking for in a hire that they may not have looked for before?
"There is the basic rule of never misrepresenting yourself on your
resume. You’d be surprised how many people do this," says Citrin. "And,
if you have an issue as an individual, do not try to hide it. Find the
most appropriate time to share it and do so in the most positive way
possible, setting the context within which the action or decision was
made, why you made it, why in retrospect it was wrong and what you learned
from the experience. People in general are very forgiving with this
type of approach. But in the current environment, they are unforgiving
about being surprised or hoodwinked."