How to Hire Ethical Marketers and Become an Ethical Leader

Hal Conick
Marketing News
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Key Takeaways

​What? Only 45% of C-suite executives engage ethics officers when making strategic decisions.

So what? Ethical businesses have lower operating costs, better sales and can palatably charge more for their services. 

Now what? Ethical leaders must make ethics a clear and consistent part of their agendas, set standards, model appropriate behavior and hold everyone accountable.

​Sept. 1, 2017

An ethical company may mean more sales and fewer costs. How can marketers hire more ethical employees and become more ethical leaders?

 

If there were a business focus that lowered operating costs, increased sales and allowed companies to palatably charge more for their goods and services, they’d focus on it straightaway, right?

Not necessarily. Ethics check all three of these boxes, according to Linda Treviño and Katherine Nelson in their book Managing Business Ethics, but many businesses treat ethics as an afterthought. LRN, a consultancy that focuses on ethics and regulatory compliance, found in its Program Effectiveness Index Report that only 45% of C-suite executives surveyed engage ethics officers when making strategic decisions, and 49% consider ethics a prerequisite for employee promotion.

Most organizations make the mistake of overconfidence when hiring, per what David Mayer, associate professor at the University of Michigan, writes in Fast Company. Mayer says companies think they know how to judge the good character of a potential employee during the interview process despite research that shows their judgment on good character is the same as an ordinary person’s judgment​. 

“One comprehensive review of the data found that, on average, we’re barely better lie detectors than sheer chance,” Mayer writes. 

To focus on ethics, companies must look to ethics research. To focus on ethics research, we turn to Azish Filabi​, CEO of Ethical Systems. Ethical Systems is a collaboration of top researchers who believe that good ethics make good business. 

Marketing News spoke with Filabi about becoming an ethical leader, hiring ethical employees and how marketers can be more ethical. 

Q: First, tell me about your background in ethics. What led you to become CEO of Ethical Systems?

A: I have worked on issues impacting business from various perspectives for many years, including as a corporate transactional lawyer, a bank regulatory lawyer at the [Federal Reserve Bank of New York], an ethics officer and now as a researcher and CEO of Ethical Systems. I am also an adjunct professor at [New York University] where I teach undergraduate business students about the role and social responsibility of business in society.

As CEO of Ethical Systems, I work with the top experts in social and behavioral science to help companies tackle their ethics challenges through the lens of human behavior. Most companies aspire to improve ethics through codes of conduct and values statements, but many find that motivating ethical behavior among employees to reach those values is a larger challenge. Companies are complex organizations and to run an ethical business, leaders need to recognize that all people are highly susceptible to social influence. What this means for organizations is that they need to not just talk about the importance of culture and ethics—which is the first step—but to also actively manage it by assessing culture and considering interventions where there needs to be improvement.

Q: What is one piece of research you would show someone who is skeptical of the impact of ethics on business?

A: How about three avenues for impact? Research shows that ethics pays in various ways for companies, and I can point to areas of research in three specific instances: No. 1 enhancing corporate reputation; No. 2 illegal conduct can be very costly; and No. 3 good governance pays off financially. 

In today’s business environment, I would also highlight the recent ethics challenges at Wells Fargo and Volkswagen to demonstrate how an ethics scandal can have far-reaching impact on a company. We don’t often highlight negative stories about companies, but these are two examples where the organization’s culture was clearly misaligned with their stated values. They can make the case for why paying attention to ethical culture is of prime importance.

 

 Beyond Carrots and Sticks: Encouraging a speak up culture

 

Q: Is there any ethical research specific to marketing?

A: Ethics in marketing often gets down to matters of disclosure. When you are starting a company and “fake it ‘til you make it” is the motto, where do you draw the line on projecting your future valuation? When you are selling a product that has a defect, how much do you disclose to your customers? For those in marketing, I think it’s important to consider the long-term horizon of the company’s brand and whether their efforts are contributing to upholding the company’s reputation. For companies that value the ethics of their brand, it’s important for leaders to be clear with their marketing and public relations teams that honesty in disclosure is vital.  

Q: What are the common traits of an ethical leader? How about an unethical leader?

A: Research shows that an ethical leader not only talks about ethics, but also models ethical behavior and manages for ethics. When managing for ethics, for example, leaders need to be aware of who they are promoting in the company and whether they have taken that individual’s ethical behavior into consideration. It also means thinking about the ethics of an organization’s compensation plan and the type of behavior the financial incentives are motivating. Some companies have gotten themselves into trouble by driving too hard on financial goals, thus incentivizing their employees to win at all costs.  

The expressed values and leadership of a company trickles down to affect all aspects of an organization. The model of ethical culture we often refer to, based on Professor Linda Treviño’s work, recognizes the complex formal and informal systems that comprise all companies and that the main job of a leader is to align all these systems. No company can be perfect in matters of ethics, but creating a culture where employees can talk about their ethical concerns and challenges and seek support to resolve them is a big step forward to leading for ethics.

Q: How can one become a more ethical leader?

A: Make ethics a clear priority. Being an ethical leader means going beyond being a good person. Ethical leaders make ethics a clear and consistent part of their agendas, set standards, model appropriate behavior and hold everyone accountable.

[Also], encourage, measure and reward ethical leadership at multiple levels. Ethical leadership from the top is very important because it creates an environment in which lower-level ethical leaders can flourish, but ethical leadership at the supervisory level has a huge impact on followers’ attitudes and behavior. In fact, mid-level managers often find promoting ethics a greater challenge than do senior executives. Mid-level managers should be encouraged to regularly communicate about ethics to employees in their work unit, ensure that ethics performance is adequately reflected in employee evaluations and compensation decisions, be alert to exemplary ethical behavior in the work unit and—as appropriate—praise that behavior to others in the units.



Q: Do companies usually look for ethics when hiring new employees?

A: It is very important to talk about the company’s values when hiring employees. Bringing ethics up in interviews communicates to would-be employees that the cultural environment they will be joining values ethical behavior. Peer influence is important to fostering an ethical culture, so it’s vital to communicate effectively about ethics.  

It is also the first step of the on-boarding process for employees that you hire and provides social context for future work. But, as with all matters ethics-related, hiring managers must do this in a genuine way so that potential employees understand that the organization’s values are authentically integrated into how the company does business.

Q: How important is it to have ethics front-of-mind in the hiring process? Is there any research that supports this?

A: Followers who rate their leader as more ethical have more favorable job attitudes, such as job satisfaction and commitment. They are also less likely to report intentions to leave the organization. This is because followers are attracted to ethical role models who care about them, treat them fairly and set high ethical standards.

Ethical leadership is also associated with more helpful behavior from employees, perhaps because ethical leaders model helpful behavior [per research from David Mayer; and Fred Walumbwa and John Schaubroeck]. Ethical leadership also reduces deviant or unethical behavior in followers [per research from Mayer]. Again, ethical leaders are role models, and followers learn how to behave by observing them, [per research from Celia Moore]. When unethical acts occur in the social environment, employees who have an ethical leader are more likely to report the wrongdoing to management because ethical leaders create a psychologically safe environment and are trusted to handle reports fairly and with care, [per research from Mayer].

Q: How can a company ensure its hiring process is optimized for ethical employees?

A: Burnish a company reputation that emphasizes ethics—that will attract ethical candidates.

Q: Marketing is often seen by outsiders as a less-than-ethical industry. Should marketers showcase their ethics work or let it speak for itself? 

A: Marketers should absolutely highlight their ethics work, but only when it is authentic and reflects actual progress made within the organization. Promoting standards, values and reputation is a powerful way to ensure stakeholders and potential candidates are aware of their efforts in the ethics realm and [ensures] that you are attracting the right stakeholders and employees.  

It’s also important to be honest about ethical challenges that the company has considered but not yet been able to address. Patagonia is a good example of this approach; they have been transparent with the public about the results found in many of their social compliance audits and how they have been working to address those challenges.


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Author Bio:

https://auth.ama.org/PublishingImages/hal-staff-photo.jpg
Hal Conick
Hal Conick is a staff writer for the AMA’s magazines and e-newsletters. He can be reached at hconick@ama.org or on Twitter at @HalConick.
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