How much integrity do CEOs have? Are people eligible for the title Chief Ethics Officer? Or is there a Chief Evil Officer often hiding behind a CEO’s job description?  
 
How much integrity do CEOs have? Are people eligible for the title Chief Ethics Officer? Or is there a Chief Evil Officer often hiding behind a CEO’s job description?  

There’s no doubt that at some point in time not only the senior management but also members of the management team or supervisory board look for answers to ethical questions with which every organization is inevitably confronted. Because if one thing is clear is that, an (un)ethical set-up is not only the personal choice between good and evil made by a single man or woman, but above all a product of the diversity and dynamic in teams, the candid conversations that people may or may not have with one another, and the systems that they have together put in place and are sustaining. 
A study undertaken in partnership with the Belgian-Dutch networking organization, Business Leaders shows striking results: 69 per cent of interviewees deserved the label ‘ethical’ CEO, meaning that 31 per cent did not: it emerged that a third of CEOs were pushing the boundaries in the case studies they had been presented with, and in some cases ,breaking the law.  
Moreover, in the group of ‘ethical CEOs’ there were a relatively high number of women and over-45s, The type of company played a role (family firms generally behaved less ethically than listed companies), as did the remuneration structure: the ethical CEOs are less likely to have shares and their remuneration is not solely dependent on financial KPIs. Finally, the governance model turned out to be important: CEOs who were accountable to a supervisory board behaved in a significantly more ethical way than their counterparts without overseers. 
A culture of openness and debate is more important than regulations and codes of conduct to enforce integrity  
Majorly Regulations do not inspire people to behave with integrity. It is more effective to appeal to people’s intrinsic motivation to act with integrity and to their own norms and values. Openly sharing dilemmas can help with this. For example, during a training session for intermediaries in the insurance sector, a spontaneous discussion arose about how to handle dishonest damage claims by customers. Some intermediaries show these customers the door, while others do not. It is good to break open the taboo around these kinds of difficult questions and to debate ethical questions more often.’ 
However, regulation can also play an important role in this by making one another more aware of the risks of the choices that we are making. Decisions that are beneficial to the company in the short term can, in the long term, have an adverse impact on value creation and culture, or even result in serious reputational damage. One must therefore become more adapt at recognizing the long-term consequences of our thoughts and actions, and at calling each other to account.  
 
The role of diversity in ethical debates  
Research has shown that diversity leads to a richer and more interesting debate, provided that there is sufficient mutual trust. Only then do people dare to be open. There is a key role for the chairman in this: he or she must also create trust in a heterogeneous group and ensure that everyone has a chance to speak, that every contribution is valued and that divergent opinions are listened to. The corporate governance code says that boards of directors and supervisory boards must be diversely composed to ensure more balanced decision-making, a healthier culture and a more open discussion. Yet there is still a great deal of resistance in boards to people of a different gender, background or nationality. People often feel uncomfortable and less secure in a heterogeneous group, because they cannot read other members of the group straight away.  
This also applies to the remuneration committees within the supervisory boards: greater diversity in their composition, and the absence of a cliquish atmosphere with people who have all been to the same business school, will ultimately lead to better decision-making about remuneration. 
 
Role of remuneration systems in ethics 
Bonus systems that are entirely based on financial KPIs can lead to short-termism and unethical behaviour. That is one preliminary finding of our ongoing research into the remuneration policies of companies that create sustainable value for shareholders. If variable pay based on financial performance criteria constitutes a large proportion of the remuneration, this means that you are one-sidedly stimulating turnover and profit maximisation. What gets rewarded gets done. Therefore you must also apply non-financial criteria in order to steer things in a more balanced way. To reinforce the focus on the long term, there have also now been calls for a basic income, with a share package that may only be cashed in many years after leaving the company or even only upon retirement. This also represents a radical simplification.’ 
Research suggests that you could link the awarding of a variable remuneration to criteria such as behavior and leadership, but could also consider other forms of reward, such as appreciation, collegiality, openness and integrity. This pushes things in the right direction. 
 
Source : http://www.vlerick.com/en/about-vlerick/news/ethical-dilemmas-demand-moral-leadership 
 
XED Choices for programs on Ethical Leadership  
 
Rutgers Business School- Customized Ethical Leadership Education Programs 
University of Pittsburgh - Certificate Program in Leadership and Ethics 
ISB Executive Education - Strategic Leadership: A Value-based Approach to Success