Taking the Ethical High Road Is Good for Business

Today’s news is chock-full of business leaders caught with their hands in the proverbial cookie jar or making some other fiscal faux pas that adversely affects stockholders, employees and the reputation of their particular industry. So it shouldn’t come as a big surprise when you hear, “Take the high road in business, and you may reap more benefits than a warm fuzzy feeling.” Doing the right thing when presented with wrong can have a positive affect on your company’s reputation, future sales and lasting prosperity.

“Probably the most important ethical issue that business executives face is how to deal with employees who observe wrongdoing in the workplace,” said Bruce Weinstein, Ph.D., CNN analyst and CEO of Ethics At Work Inc. “Obviously, companies prohibit cheating, stealing, harassment, fraud, other sorts of crimes and unethical conduct, but very few have policies that tell employees what they should do if they observe someone else engaging in wrongful conduct. So many employees when they’re in that situation choose to do nothing, since they’re not obligated by the company to notify the supervisor and for obvious reasons they don’t want to create ill will among their co-workers.”

Doing nothing in the face of wrongdoing is rarely the best choice in business or elsewhere, Weinstein said, and it affects the company’s bottom line in several ways. “First of all, it tarnishes the company’s reputation when the truth comes out, as it eventually does, that wrongful conduct was known and yet nothing was done about it,” Weinstein said. “Everyone loses when this occurs. The employees themselves lose, the company can lose clients or customers, and the shareholders for publicly traded companies are harmed because they literally have an investment in the welfare of the company. Taking the high road isn’t just the right thing to do, it’s good for business. Conversely, taking the low road or acting selfishly or acting out of fear isn’t just wrongful conduct, it generates bad PR, and ultimately, business is hurt.”

Weinstein used Martha Stewart’s situation as an example of what can happen when a business leader’s misdeeds become known. Stock in Martha Stewart Living Omnimedia took a big hit after Martha’s wrongful conduct came out and she was convicted of a felony. “Her company was investigated with her, and even though her conduct wasn’t directly related to the company, it’s very difficult for chief executives to separate in the public mind their personal and professional conduct, and probably there’s good reason for that,” Weinstein said. “Rightly or wrongly, we do look to business leaders, political leaders, educators as being exemplars of good conduct, whether they feel that way or not.”