Chapter Seven. Best Practices in Ethical Leadership

Craig E. Johnson

The arrival of the new millennium brought with it a tsunami of corporate scandals. Just as the publicity from one wave of discredited companies (Enron, WorldCom, Tyco, Adelphia) subsided, another wave rose to take its place (Health South, Strong Mutual Funds), only to be followed by yet another (Fannie Mae, AIG Insurance). All of these cases of moral failure serve as vivid reminders of the importance of ethical leadership. In every instance, leaders engaged in immoral behavior and encouraged their followers to do the same.

Despite its significance, scholars, educators, and practitioners frequently overlook the ethical dimension of leadership. Social scientific research into leadership ethics is “a relatively new topic.”[1] Management school instructors often limit discussion of the subject to a single period scheduled near the end of the quarter or semester, which may be dropped if time runs short. Many organizational leaders pay grudging attention to ethics largely in response to outside pressures like media scrutiny, federal sentencing guidelines, and congressional investigations.[2] They institute ethics programs (ethics hotlines, written codes, complaint procedures) but then give them minimal support. As a result, these procedures have little influence on day-to-day operations.[3]

This chapter brings ethics to the forefront of leadership practice, based on the premise that exerting moral influence is critical ...

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