Business Ethics

5 Reasons Leaders Behave Badly

5 Reasons Leaders Behave Badly
Image credit: WikiMedia
  • ---Shares

Everyone makes mistakes, but not all mistakes are equal -- especially when the people making those mistakes are leaders in positions of power who are violating generally accepted ethical norms.

Related: Are Business Ethics at a Low Ebb?

While some may argue that there are no generally accepted ethics and that all conduct should be driven by situational circumstances, the truth is that there exists a useful ethical standard to measure our personal and professional behavior against.

That standard is the question, "Would I want to live in a world where everybody did what I'm about to do?"

With that question as a guide, it's safe to say that few people would willingly choose to live in a world where the universally accepted standards were inequality, greed, lying, stealing, cheating and corruption.

Certainly those things happen every day -- and we may tolerate mini-versions from friends and family. But we tend to be less forgiving when those behaviors are exhibited by people in authority, especially business leaders. In fact that was the point of the Occupy Wall Street movement, in 2011.

However, the ethical lapses of business and government leaders are particularly puzzling for several reasons, including: the high financial and reputational risks associated with unethical behaviors; potential civil or criminal litigation depending on the nature of the violations; and the near-certainty that those leaders will eventually be found out.

Why would they risk it, especially when the fear of loss usually trumps the desire to acquire gains? Here are five likely reasons:

1. Easiest option

For some leaders and executives, breaking the rules and unethical behavior comes easily. For instance, Bernie Madoff leveraged his ethnic heritage to gain inroads with several Jewish foundations and not-for-profits, to then turn around and steal millions from those who trusted him. Sometimes, such icy exploitation is second nature.

2. Privilege

Professional athletics is one of the few professions where you could cut salaries in half and the employees would still come to work. In other words, it's a privilege to be paid to compete in professional sports.

That sense of privilege and entitlement played at least a partial role in FIFA's recent scandal regarding allegations of bribery and influence peddling as part of the organization's city-selection process to host future World Cup soccer events.

Such privilege led to the arrest of seven FIFA officials this summer, and may have led to what seemed like the announced resignation of its president, Sepp Blatter, in June. (Blatter later back-tracked and said he had not resigned.)

Related: What to Do When a Colleague Acts Unethically

3. Success at all costs

The drive and desire to win is present in many industries but probably no more so than in sports. 

In sports, at both the team and individual level, greatness is defined by winning. Yet amateur and professional athletics have long been mired in doping and performance-enhancing drug scandals, illegal inducements, player poaching, recruiting violations, sexual abuse, domestic violence, wiretapping of opposing locker rooms and so on. 

In fact, an old sports adage goes, "If you ain't cheating, you ain't trying." 

4. Perceived invincibility

Leaders are used to getting their own way. They're used to success, and they're often used to having people execute their every whim.

This can embolden them with a sense that they're untouchable or invincible. Such was the case of former New York Governor Eliot Spitzer who admitted to soliciting prostitutes during the same time period that he was prosecuting "Johns" while serving as his state's attorney general.

Spitzer's apparent perception of invincibility clouded his own judgment regarding his inability to adhere to the very laws he had sworn to enforce.

5. Rationalization

Rather than address the internal cognitive dissonance that comes with admitting actions that contradict our own self-image, many of us choose to rationalize or "explain away" our bad behaviors.

I witnessed this firsthand with a CEO I worked for who claimed to have an advanced degree on his resume that was fictional. After a reporter contacted the CEO's alma mater and confirmed that the executive had not completed his course of study, I heard the executive say in private that his professional experience was worth "10 advanced degrees."

While that may have been true, that rationalization hardly justified his padding his resume. 

Overall, these five excuses are not the only reasons a leader or executive might end up "breaking badly," but they're lessons for us all.

When you find yourself debating with yourself regarding an ethical dilemma, realize that an ethical decision or potential jail time might be only a question away: "Would I want to live in a world where everybody did what I'm about to do?"

Related: A Proactive Approach to Addressing Unethical Behavior in the Workplace