Supervisors Impact Culture as Ethical Leaders.

• Author: Harris, Anne R.

* A great deal of research has been conducted by organizations such as the Ethics and Compliance Initiative, Gartner and PwC, as well as academic institutions, into the subject of organizational ethics, integrity and culture. They have looked at questions like: What is an ethical culture? What difference does it make to have an ethical culture? What are the influences on ethical culture? And what can a company do to create --or start shifting toward--an ethical culture?

In an ethical corporate culture, the shared organizational values and behavioral norms--"how we do things around here"--are characterized by integrity. Thought leaders talk about ethics and role models conduct themselves with integrity; people are held accountable; and open, two-way communications occur in an environment free of fear.

Contractors that implement effective ethics and compliance programs, in accordance with the standards in the U.S. Federal Sentencing Guidelines for Organizations, Chapter 8, and the Federal Acquisition Regulation Subparts 3.10 and 52.203-13, are more likely to have a strong ethical culture.

What difference does it make? Those companies experience less misconduct by employees at all levels. They are able to mitigate risk by preventing and detecting problems early, so they can address them before problems escalate. They also enjoy an edge when it comes to attracting and retaining talent. Honest, open communications facilitate their processes and improvement efforts. Their company's reputation is less at risk.

Implementing an effective program is key and, done well, will have a profound impact. But as part of that effort, one of the most powerful things the contractor can do to influence employee behavior is to focus on direct supervisors and help them to be ethical leaders.

As the Ethics and Compliance Initiative stated in its 2019 Global Business Ethics Survey report, "In many organizations, supervisors are the only people in leadership positions that employees interact with on a daily basis. As a result, their behavior serves as a proxy for the values and priorities of senior leadership and the organization as a whole."

A 2014 study by the ECI found that employees judge three factors most rigorously in supervisors when assessing them as ethical leaders: setting a good example; conducting one's own life in an ethical manner; and being accountable for violations of ethical standards.

Employees also are influenced by whether supervisors listen to...