ETHICALLY NEUTRAL OR ‘‘SILENT’’ LEADERSHIP

The fact is that many top managers are not strong leaders either ethically or unethically. They fall into what employees perceive to be an ethically ‘‘neutral’’ or ethically ‘‘silent’’ leadership zone. They simply don’t provide explicit leadership in the crucial area of ethics. They are perceived to be silent on this issue, and employees aren’t sure what the leaders think about ethics, if anything. This may be because the leader doesn’t realize how important executive ethical leadership is to the organization’s ethical culture, isn’t comfortable with talking about ethics issues, or just doesn’t care that much. On the moral person dimension, the ethically neutral leader is not clearly unethical but is perceived to be more self-centered than people-oriented. On the moral manager dimension, the ethically neutral leader is thought to focus on the bottom line without setting complementary ethical goals. Little or no ethics message is coming from the top. But it turns out that silence represents an important message. In the context of all the other bottom-line-oriented messages being sent in a highly competitive business environment, employees are likely to interpret silence to mean that the top executive really doesn’t care how business goals are met  and they’ll act on that message.

Consider Sandy Weill, former charismatic CEO of Citigroup. Well before the current financial crisis, a Fortune magazine article described the firm as a ‘‘blockbuster money machine.’’ But the article also recounted scandalous allegations about

Socialization into the ethical culture is often begun through formal orientation programs for new employees and is reinforced through ongoing training. The organization’s cultural values and guiding principles can be communicated in orientation programs. Employees often receive an introduction to the values and mission statements as well as the company’s history and current code of conduct. But new employees are so overwhelmed with information that it’s important to follow up with training programs that offer more specific guidance. An increasing number of firms have added ethics to their list of training programs. Some have done so as a result of the revision of the U.S. Sentencing Commission Guidelines and the Sarbanes-Oxley legislation that requires public companies to conduct compliance training at all levels, including senior executives and the board of directors. Most Fortune 1000 firms provide some ethics training,54 and many of them do so annually. In the 2005 Ethics Resource Center study,55 69 percent of people surveyed said that their employers provide ethics training and that this training is generally mandatory.

It’s important to note that the ethics training must be consistent with other ethical culture systems, because a training program that is out of alignment with other culture systems is thought of, at best, as a pleasant day away from the office. At its worst, the ethics training is seen as an obstacle to getting ‘‘real’’ work done—or even as a joke. For example, a young man who worked in mortgage lending in 2006 said that his company had provided a high-quality weeklong training program to prepare him for his job. Among other more technical aspects of his job, he was taught to advise clients to be sure that they could afford their payments and to avoid incurring additional credit card debt. He felt that this was smart and caring advice, and he felt good about his new role. But when he returned to the office, his ‘‘mentor’’   told him that all that mattered was closing the deal and making money for himself and the company, and that ‘‘advising’’ clients was a waste of time. If his ‘‘advisor’’ role had been reinforced by his mentor, the cultural message would have been entirely different. Perhaps the company’s fate would have been different as well—it no longer exists.