How Do Leaders Resolve Ethical Dilemmas They Face?

Years ago, I was invited to speak at a conference in New York. My wife and kids joined me on the trip—they had plans to visit tourist locations while I attended the conference. We found a welcome basket with an envelope inside when we checked into our hotel room. My daughter opened the envelope and said, “We’re invited to the World Series with VIP access and amazing seats!” I remember seeing my family happy and dancing with the tickets. “Why would the hotel offer us that?” I thought. After reading the card, I realized the gift was from a potential vendor negotiating with my company. My company’s code of conduct did not permit me to accept gifts over a certain limit. Amazing seats and VIP World Series access would have been beyond that limit. Accepting gifts during negotiations wasn’t permitted either.

My heart sank as I watched my family celebrate. I didn’t want to take the joy of this gift away from them. And how would I explain the company policy to the vendor’s CEO without offending them? If we went to the game and didn’t tell anyone, would that be the correct answer? That was my ethical dilemma. I left the hotel room to think of a win-win solution. After about 15 minutes, I gathered my thoughts and called the company's CEO. His first question was, “What did you think?” I took a deep breath and thanked him for the joy it brought my family, how they danced around the hotel room, and how special it made them feel. I also shared our firm’s policy on gift limits and contract negotiations.

I thought the relationship would sour at that point, but the CEO surprised me. He said, “The last thing I want to do is disrupt our business relationship.” We brainstormed some ideas, and he suggested replacing those tickets with something else that would meet my company’s ethical requirements. Brilliant idea. We hung up the phone, and I returned to the room, asking my family if we could talk. I shared that the tickets were a wonderful gesture, but we couldn't accept them because we wanted to act ethically as a family and for my company. There were some tears, and a question—“What can we do instead?” I asked them. They answered, “Let’s go to a Broadway show.” We rushed online and found tickets. Broadway tickets cost me a little extra money, but I’d gladly pay that rather than the high cost of losing my integrity. My company ended up doing business with the vendor, and I believe the relationship was stronger because we navigated that ethical dilemma together.

Earlier in my career, as the CEO of a marketing start-up, I was confronted with an ethical dilemma revolving around a potential client. This particular client had the potential to significantly increase our revenue, but their business practices were highly questionable and contradicted our company's integrity and corporate social responsibility. Herein lay my dilemma: Do I align myself with a dicey venture purely for financial gain, or uphold my firm's ethical values? After careful consideration and consultation with key members of my leadership team, we decided to politely decline their offer.

It was a challenging choice, as it meant forgoing a substantial financial boost. However, in the long run, the decision to uphold our ethical obligations reflected positively on our corporate image, solidified our stand on social responsibility, and brought in equally profitable clients who respected our principles. This experience was a powerful reminder that success achieved at the cost of one's principles is simply not worth it.

Throughout my journey, I have faced many ethical issues. One of the most difficult issues I faced was when we were pressured to source cheap materials to meet our quality standards. This compromised our brand image. To address this issue, I put myself in the shoes of our people. Quality and authenticity are at the core of what we stand for. I started with rigorous supply chain audits, ensuring that every step of the supply chain was ethically sourced and that the health and safety of suppliers and workers were respected. I also ensured we communicated openly with our stakeholders about our uncompromising quality standards and our ethical business practices.

In the end, we decided to put integrity first. Not only did we keep our customers' trust, but we also kept our brand reputation intact in an industry where many companies engage in unethical practices. This experience taught us the importance of staying true to our values, even under pressure from the outside. I hope you find this advice helpful! If you have any further questions, feel free to ask.

Look to Greek philosophers for guidance. While for Plato and Socrates, knowing the good was sufficient to doing the good, for Aristotle, there must be, in addition to knowledge, deliberate choice.

Most of us today know what is good, right, honorable; we simply choose to ignore it—by minimizing the issue or impact, rationalizing our (or others') behaviors, creating a new story around the issue that makes us feel good, intending to change the situation then doing nothing—and a dozen other ways we convince ourselves that we're doing the right thing, when we're not.

These behaviors give us an 'out' from tough situations and tough calls. They also make us weak, chip away at our self-respect, and make us susceptible to others' influence.

Meaningful work—ethical work—is hard work that requires each of us to be radically honest with ourselves and our intentions—we must ask ourselves, 'What is the likely outcome for the other party(ies)? Will they experience loss or harm in any way? Will their trust in me/my employer wane? Are there other avenues to pursue? Think really hard about the outcome for others. If it's negative, think again about motive—yours or the colleague asking you to take a specific course of action. More often than not, when harm to another human is involved but another path is possible, the motive is suspect at best and self-serving at worst.'