Lack of Ethical Leadership

the number of high profile corporate scandals by major companies such as WorldCom, Enron, and Tyco, as well as current firms such as India’s Satyam and the United States ’ Countrywide Financial Corporation, Healthsouth Corpora-tion, and Diebold Incorporated, inevitably the responsibility for such unethical conduct must revert back to the leaders of these corporations. It is no wonder that in a survey conducted by The Economist [October 2003] only 23 percent of those questioned believed that a corporate executive could be trusted, which was slightly higher than that of a used automobile salesperson. This article will examine: (1) Details of the lack of ethical leadership exhibited in the latter four companies mentioned above, (2) Several psychological and philosophical reasons why this behavior was able to transcend throughout the organization, (3) Some steps which should have been in place to deter this poor behavior by corporate leaders, and (4) Recommendations for future research. Key words: corporate fraud, corporate leadership, corporate scandals, corporate social responsibility, unethical decision makin