{"id":16802,"date":"2018-05-01T06:55:38","date_gmt":"2018-05-01T06:55:38","guid":{"rendered":"https:\/\/arielle.com.au\/?p=16802"},"modified":"2025-07-03T01:15:30","modified_gmt":"2025-07-03T01:15:30","slug":"are-ceos-becoming-less-ethical","status":"publish","type":"post","link":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/","title":{"rendered":"Are Global CEOs Becoming Less Ethical?"},"content":{"rendered":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 5<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p>Lapses in ethics and judgment that have caused more CEOs than ever in business history to go down. Which explains why, when <i>Strategy&amp;<\/i> (a division of PwC), released their <a href=\"https:\/\/www.strategyand.pwc.com\/ceosuccess\">annual global CEO study for 2016<\/a>, they focused on this rising phenomenon.<\/p>\n<p>They zeroed in on the world\u2019s 2,500 largest public companies and their senior business leaders.<\/p>\n<p>Last year, out of those 2,500, there were 18 cases of CEO removal \u201cas the result of a scandal or improper conduct by the CEO or other employees\u201d (<i>Strategy&amp;<\/i>\u2019s definition).\u00a0Mostly due to ethical issues such as:<\/p>\n<ul>\n<li>fraud<\/li>\n<li>bribery<\/li>\n<li>insider trading<\/li>\n<li>harassment<\/li>\n<\/ul>\n<div class=\"blog-post-spacer\"><\/div>\n<h2><b>Only 18 Cases Of Unethical CEOs?<\/b><\/h2>\n<p>On face value, it sounds irrelevant. Yet even this seemingly small number of ethical issues at the highest echelons of business leadership indicates a significant shift.<\/p>\n<p>Globally, CEO removals for ethical breaches rose 36% between 2007 and 2016. If you just look at North America and Western Europe, the increase is 68%.<\/p>\n<p>But is there actually more corporate corruption happening now versus, say, 15 years ago?<\/p>\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/guide-to-capital-expenditure-capex\/\">Ultimate Guide To Capex For SMBs<\/a>).<\/strong><\/p>\n<p>Interestingly, the study admits there\u2019s no conclusive way to tell. What\u2019s more, based on their experiences working with large corporations, they doubt it.<\/p>\n<p>In fact, their research shows that most companies (especially in North America, Western Europe and other developed countries) are <a href=\"https:\/\/arielle.com.au\/management-advice\/leading-through-a-crisis\/\">improving their leadership governance practices<\/a> &#8211; and that real number of ethical issues amongst senior business leaders is falling.<\/p>\n<p><strong>(See Also: <a href=\"https:\/\/arielle.com.au\/resume-writing-services\/\">Top-Rated Australian Resume Service<\/a>).<\/strong><span id=\"Stupid_AI\"><\/span><\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h2><b>The Increase Is About Context.<\/b><\/h2>\n<p>The business world has <a href=\"https:\/\/arielle.com.au\/advice-to-business-leaders-how-to-build-a-solid-business-strategy-for-the-digital-age-qa\/\">changed dramatically in the last 15 years<\/a>. The study distills it down to five major trends. As an added bonus, I\u2019ve included relevant examples for each.<\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h3><strong>1. Public Opinion Has Changed.<\/strong><\/h3>\n<p>According to the <a href=\"https:\/\/www.edelman.com\/trust2017\">2017 Edelman Trust Barometer<\/a>, only 37% of people consider CEOs credible today.<\/p>\n<p>Specifically in America, where the political climate is deeply divided, 75% of Americans say CEOs should avoid taking a position on political issues and should be held more accountable.<\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h3><b>2. Regulations Are Stricter Than Ever.<\/b><\/h3>\n<p>Consider Dieselgate \u2013 the <i>Volkswagen<\/i> scandal that began with the <a href=\"https:\/\/arielle.com.au\/vw-emissions-scandal\/\">discovery of a diesel emissions \u201ccheat device\u201d<\/a> and ended with German prosecutors raiding their headquarters earlier this year.<\/p>\n<p>The big remaining question is whether or not CEO Matthias M\u00fcller kept investors in the dark to protect the stock price.<\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h3><b>3. Emerging Markets And Complexity.<\/b><\/h3>\n<p>While <i>Uber<\/i> isn\u2019t a public company (yet), its negotiations with regulators around the world are nothing short of artful.<\/p>\n<p>Essentially, they launch a pilot program and wait for the sparks to fly. Next, they press the local government to accept their service as a public need.<\/p>\n<p>Case in point: After a female passenger was raped in Delhi, <a href=\"https:\/\/www.techinasia.com\/how-can-Uber-be-regulated\">knee-jerk bans spread across India\u2019s major cities<\/a>. Eventually, however, <i>Uber<\/i> won out in the end.<\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h3><b>4. Social Media Increases Exposure&#8230;<\/b><\/h3>\n<p>On April 9, 2017, Dr. David Dao was dragged, bloodied and screaming, by aviation officers from an over-booked <i>United Airlines<\/i> flight.<\/p>\n<p>Other passengers recorded the incident on their phones and shared it all over social media. While <i>United<\/i> CEO Oscar Munoz was quick to apologise for the incident, he wasn\u2019t forthcoming with answers for the Senate Committee Hearing.<\/p>\n<p>As a result, despite his employment agreement, <i>United<\/i>\u2019s board ruled that Munoz will not be promoted to the Chairman role in 2018.<\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h3><strong>5. &#8230;And Gives A Voice To Whistleblowers.<\/strong><\/h3>\n<p>As though the <i>United<\/i> story weren\u2019t enough to prove this point, let\u2019s revisit <i>Uber<\/i>.<\/p>\n<p><a href=\"https:\/\/www.susanjfowler.com\/blog\/2017\/2\/19\/reflecting-on-one-very-strange-year-at-Uber\">An expos\u00e9 by a former female engineer<\/a> put a spotlight on entrenched ethics issues in <i>Uber<\/i>\u2019s business and was the beginning of the end for Travis Kalanick.<\/p>\n<p>What fascinates is that despite all that followed (trips to Korean escort bars, the ousting of employees linked to harassment allegations, an IP lawsuit, the <a href=\"https:\/\/www.washingtonpost.com\/news\/dr-gridlock\/wp\/2017\/05\/16\/deleteUber-will-have-lasting-fallout-for-ride-hailing-app-study-says\/\">#deleteUber movement<\/a>) Travis reigned as long as he did \u2013 AND is still on the board.<\/p>\n<p>That said, Susan Fowler\u2019s blog hints at another trend the <i>Strategy&amp;<\/i> study failed to acknowledge.<\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h2><b>More Employees Are Speaking Up.<\/b><\/h2>\n<p>According to a<a href=\"http:\/\/trust.navexglobal.com\/2017-Hotline-Incident-Management-Benchmark-Report_Download.html\"> NAVEX Global study<\/a>, reports of ethics issues in business have risen over 50% since 2016. Just a few prominent examples:<\/p>\n<ul>\n<li><i>Wells Fargo<\/i> made all the wrong headlines when excessive pressure on employees to sell new accounts resulted in fraud. New CEO Tim Sloan fessed up when he said it was finally time to put employees before shareholders.<\/li>\n<\/ul>\n<ul>\n<li><i>THINX<\/i> CEO Miki Agrawal resigned after employee reports of sexual harassment and a toxic work environment. Since <i>THINX<\/i> is a startup, Agrawal admitted there was little HR presence in the culture.<\/li>\n<\/ul>\n<ul>\n<li>And then there\u2019s <i>Fox News<\/i>. Last year, Gretchen Carlson was the first of many to speak up about being sexually harassed by then CEO Roger Ailes. Ailes resigned, and died earlier this year.<\/li>\n<\/ul>\n<p>So, besides creating a bulletproof compliance and ethics framework and working in lockstep with HR on impactful decisions and controversial issues, how can CEOs today hold their heads high?<\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h2><b>Focus On Behaviours And Values.<\/b><\/h2>\n<p>The leadership consultancy <i>ghSmart<\/i> conducted a 10-year study called the <a href=\"http:\/\/ceogenome.com\/\">CEO Genome Project<\/a>.<\/p>\n<p>So far, they\u2019ve profiled 17,000 C-Suite executives, including over 2,000 CEOs.<\/p>\n<p>While the researchers admit there is no \u201cone size fits all\u201d approach to CEO success in today\u2019s climate, they did pinpoint four essential behaviours that seem to distinguish the winners from the losers.<\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h2><b>In Today&#8217;s World, The Most Ethical CEOs:<\/b><\/h2>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><b>Decide With Conviction and Speed.<\/b> According to former <i>Greyhound<\/i> CEO Stephen Gorman, who led the bus operator through a turnaround, \u201cA bad decision was better than a lack of direction. Most decisions can be undone, but you have to learn to move with the right amount of speed.\u201d Think back to what happened to Munoz.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><b>Practice Relentless Reliability.<\/b> When Scott Clawson became CEO of water treatment company <i>Culligan<\/i>, he inherited a struggling business believed to have an EBITDA of $60 million. He soon realized the figure was closer to $45 million. After much pushback, he led a revamp that has exceeded board and investor expectations ever since.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><b>Are Relationship Masters.\u00a0<\/b><a href=\"https:\/\/arielle.com.au\/transformational-leadership\/\">The best CEOs give people a voice, but not necessarily a vote<\/a>. Christophe Weber, CEO of <i>Takeda Pharmaceutical<\/i>, has open forums with a handful of his high potentials before making key decisions. He asks to be challenged with new perspectives while <a href=\"https:\/\/arielle.com.au\/how-to-be-a-highly-effective-change-manager\/\">making it clear he\u2019s the final decision-maker<\/a>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><b>Are Proactive In Adapting to Changing Circumstances.<\/b> <i>Atlassian<\/i> co-founder and co-CEO Scott Farquhar said it\u2019s easier to build a big company than a long-term company. He believes that today, <a href=\"https:\/\/arielle.com.au\/how-to-be-a-strong-leader-in-the-digital-age-a-101-crash-course-for-ceos-who-slept-in\/\">only the most adaptable companies are going to survive<\/a>. His advice for building a long-term company? Establish your culture as your foundation. With that in place, you can bend and flex to face anything.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Last but not least, I\u2019ll throw in one more success factor.<\/p>\n<div class=\"blog-post-spacer\"><\/div>\n<h2><b>Your Passion.<\/b><\/h2>\n<p>Yes, Travis Kalanick has nothing but passion for <i>Uber<\/i>\u2019s business.<\/p>\n<p>But as his business ethics track record indicates, could it be that something different is required\u2014such as a passion for the CEO role itself\u2014with full awareness of its inherent potential for long-term impact?<\/p>\n<p>Indra Nooyi, CEO of <i>Pepsico<\/i>, who writes thank you letters to her employees\u2019 parents, puts it this way:<\/p>\n<blockquote>\n<h3><i>&#8220;I think it\u2019s not a job. If you want to be CEO of a large company or any company, it\u2019s got to be a passion; it\u2019s got to be your calling. You\u2019ve just got to love what you\u2019re doing, believe in what you\u2019re doing, and say to yourself, when I feel like I\u2019ve done enough with this company, I want to leave feeling great about my contributions and the legacy I\u2019m leaving behind.&#8221;<\/i><\/h3>\n<\/blockquote>\n<p>What do you think of business ethics in the boardroom today? I\u2019d love to hear.<\/p>\n<p>&#8211; Irene<\/p>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 5<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>Lapses in ethics and judgment that have caused more CEOs than ever in business history to go down. What&#8217;s behind the rise of &#8220;unethical CEO?&#8221;<\/p>\n","protected":false},"author":2,"featured_media":66092,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_uag_custom_page_level_css":"","_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[8,27],"tags":[25,68],"class_list":["post-16802","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-leadership","category-leadership-development","tag-business-leadership","tag-ceo"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Are CEOs Becoming Less Ethical?<\/title>\n<meta name=\"description\" content=\"Lapses in ethics and judgement have caused more CEOs than ever in business history to go down. 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What's causing the rise of the \"unethical CEO\"?","og_url":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/","og_site_name":"Arielle Executive","article_publisher":"https:\/\/www.facebook.com\/ArielleExecutive\/","article_published_time":"2018-05-01T06:55:38+00:00","article_modified_time":"2025-07-03T01:15:30+00:00","og_image":[{"width":1700,"height":957,"url":"https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1.jpg","type":"image\/jpeg"}],"author":"Irene McConnell","twitter_card":"summary_large_image","twitter_creator":"@arielleexec","twitter_site":"@arielleexec","twitter_misc":{"Written by":"Irene McConnell","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/#article","isPartOf":{"@id":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/"},"author":{"name":"Irene McConnell","@id":"https:\/\/arielle.com.au\/#\/schema\/person\/360aa658ee23006e71fb65370e9c6a9e"},"headline":"Are Global CEOs Becoming Less Ethical?","datePublished":"2018-05-01T06:55:38+00:00","dateModified":"2025-07-03T01:15:30+00:00","mainEntityOfPage":{"@id":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/"},"wordCount":1273,"commentCount":1,"publisher":{"@id":"https:\/\/arielle.com.au\/#organization"},"image":{"@id":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/#primaryimage"},"thumbnailUrl":"https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1.jpg","keywords":["business leadership","ceo"],"articleSection":["Leadership","Leadership Development"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/","url":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/","name":"Are CEOs Becoming Less Ethical?","isPartOf":{"@id":"https:\/\/arielle.com.au\/#website"},"primaryImageOfPage":{"@id":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/#primaryimage"},"image":{"@id":"https:\/\/arielle.com.au\/are-ceos-becoming-less-ethical\/#primaryimage"},"thumbnailUrl":"https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1.jpg","datePublished":"2018-05-01T06:55:38+00:00","dateModified":"2025-07-03T01:15:30+00:00","description":"Lapses in ethics and judgement have caused more CEOs than ever in business history to go down. 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Arielle Executive helps leaders get noticed while Arielle Partners &amp; Talent Avenue connect organisations to Australia's best leadership talent.","sameAs":["https:\/\/www.linkedin.com\/in\/irenekotov\/"],"url":"https:\/\/arielle.com.au\/author\/irene-mcconnell\/"}]}},"modified_by":"Steven McConnell","uagb_featured_image_src":{"full":["https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1.jpg",1700,957,false],"thumbnail":["https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1-150x150.jpg",150,150,true],"medium":["https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1-300x169.jpg",300,169,true],"medium_large":["https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1-768x432.jpg",768,432,true],"large":["https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1-1024x576.jpg",1024,576,true],"1536x1536":["https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1-1536x865.jpg",1536,865,true],"2048x2048":["https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1.jpg",1700,957,false],"alm-thumbnail":["https:\/\/arielle.com.au\/wp-content\/uploads\/2018\/05\/ethical-issues-in-business-1.jpg",150,84,false]},"uagb_author_info":{"display_name":"Irene McConnell","author_link":"https:\/\/arielle.com.au\/author\/irene-mcconnell\/"},"uagb_comment_info":1,"uagb_excerpt":"Reading Time: 5 minutesLapses in ethics and judgment that have caused more CEOs than ever in business history to go down. What's behind the rise of \"unethical CEO?\"","_links":{"self":[{"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/posts\/16802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/comments?post=16802"}],"version-history":[{"count":10,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/posts\/16802\/revisions"}],"predecessor-version":[{"id":118667,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/posts\/16802\/revisions\/118667"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/media\/66092"}],"wp:attachment":[{"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/media?parent=16802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/categories?post=16802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/tags?post=16802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}