Article Summary:
Here we describe what you can do if you work for an unethical organization, including specific tips and actions.
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What should you do if you work for an unethical organization?
In a previous article, we outlined how to determine if you work for an unethical organization. In that article, we described toxic leaders and workplaces. We recapped many of the rationalizations leaders use for unethical behavior. We also included a checklist you can use to determine if you’re working for an unethical organization.
If you find yourself working in such an organization, the critical question is what you’ll do about it.
You may realize your organization’s shared values (whether explicit or implicit) don’t match your personal values and moral compass. According to a 2021 study by Blue Beyond Consulting, a California-based management consulting firm:
- 8 in 10 survey respondents say it’s important that their company’s values align with their own.
- Only 57% of knowledge workers report that their company’s values align with their personal values.
- 52% of knowledge workers are likely to quit their job if company values don’t align with their own.
These questions can be difficult because we have bills to pay and families to provide for. Many people face economic insecurity or live paycheck to paycheck.
What to Do If Your Organization Is Unethical
What can you do if you realize you’re working in an unethical organization? In his classic book, Exit, Voice, and Loyalty, German economist Albert Hirschman noted there are four major ways workers can express dissatisfaction with organizations:
- Exit: leave the organization
- Voice: try to improve conditions actively and constructively
- Loyalty: wait passively for conditions to improve
- Neglect: allow conditions to worsen
Here we focus on voice and exit, since the passive options of loyalty and neglect can be so damaging both to the worker (including their integrity, reputation, and career) and their organization.
Leadership Derailers Assessment
Take this assessment to identify what’s inhibiting your leadership effectiveness. It will help you develop self-awareness and identify ways to improve your leadership.
Option 1: Stay and try to stop the unethical practices.
This option takes moral courage and has risks. Here are steps you can take:
First, get all the facts. Avoid jumping to conclusions, since there may be things you’re missing. Ask and learn first, and watch out for subconscious biases (e.g., confirmation bias) and pre-judging. Begin with an open mind and inquire about what you’re seeing with a presumption that there may be a reasonable explanation for the behavior. But also use your common sense and good judgment—and don’t take everything at face value. Pay attention to your gut instincts and your conscience.
Assess the severity of the issues at hand. According to Harvey Pitt, founder and CEO of Kalorama Partners and former chairman of the U.S. Securities and Exchange Commission, “The first two questions that the employee must answer are how well grounded are the suspicions and how serious is the potential breach?”
Document the concerning issues with whatever evidence you can gather. Seek allies who share your concerns and can gather their own documentation.
Check to see if there’s a hotline and/or escalation policy for reporting suspected misconduct or investigating ethical concerns. Consider securing legal counsel if your concerns are significant and the organization seems to show a pattern of willful misconduct or retaliation.
Stand up and be a “voice of one”—someone who draws on their moral compass, personal values, and courage to ask tough questions or raise concerns even when they’re alone and going against the grain.
“…no one is more valuable to the organization than the subordinate willing to speak truth to power.”
-Warren Bennis, leadership author
Address the issue directly with your supervisor, when possible, unless you suspect your supervisor is knowingly engaging in the problematic behavior. (If that’s the case, go directly to the step below.) If your boss is asking you to do something questionable, Paul Fiorelli, the director of Cintas Institute for Business Ethics at Xavier University, recommends being direct in pushing back, stating something like the following: “You’ve asked me to do this, but if I did this it would violate this policy we have. You’re not asking me to do that, are you?”
If not satisfied after dealing directly with your supervisor, then go up the chain of command. Report your concerns to the human resources department, a senior officer (e.g., if your company has a chief compliance officer), or a trustworthy board member. Many larger organizations have someone dedicated to receiving complaints (e.g., compliance officer, general counsel, auditor, or human resources official).
“You can start by reporting the next level up, unless you believe that your superior is implicated.
It’s always OK to go to the firm’s chief compliance officer or a compliance staff member….”
-Ronald M. Feiman, attorney and partner, Kramer Levin Naftalis & Frankel
List your concerns in written form (e.g., email), also indicating that your communications are confidential. Document in writing all discussions you have about the concerns, including major relevant facts (name, title, date, location, etc.). Be factual but avoid being accusatory, self-righteous, or threatening. Indicate that you saw something you believe needs to be looked at. Mention it if you have legal counsel to underscore the gravity of your concern.
Try to avoid getting caught in situations where you must put yourself or family in jeopardy. We suggest having at least six months of core living expenses set aside in case you’re fired.
Be prepared to use whistleblower protections if you experience retaliation. Potential forms of retaliation include receiving worse evaluations, being passed up for promotions and raises, and experiencing disapproval or social rejection at the workplace (and data varies widely depending on how retaliation is defined).
While the risk of retaliation is real, it’s more honorable to speak up than to remain silent, stay, and become complicit. The costs of staying in an unethical organization and doing nothing are enormous and painful.
Option 2: Leave the organization.
If you don’t leave an unethical organization, you may be complicit legally, and certainly morally, for its behavior. If you leave, you can continue your career in a better work environment.
You can also choose to be a whistleblower to high-ranking members of the organization or to regulatory authorities. If you take this path, consider getting legal representation and familiarizing yourself with whistleblower laws and protections.
(See also our article, “How to Find a Great Organization to Work For.”)
“You have brains in your head. You have feet in your shoes.
You can steer yourself any direction you choose.”
-Dr. Seuss
Personal Values Exercise
Complete this exercise to identify your personal values. It will help you develop self-awareness, including clarity about what’s most important to you in life and work, and serve as a safe harbor for you to return to when things are tough.
Reflection Questions
- Are you working in an unethical organization?
- Do you think it’s best to exit now or try to effect change in the organization?
- What will you do now to address your circumstances?
Tools for You:
- Leadership Derailers Assessment to help you identify what’s inhibiting your leadership effectiveness
- Personal Values Exercise to help you determine and clarify what’s most important to you
- Alignment Scorecard to help you assess your organization’s level of alignment
Alignment Scorecard
When organizations aren’t aligned, it can reduce performance dramatically and cause frustration and dysfunction. With this Alignment Scorecard, you can assess your organization’s level of alignment and make plans for improving it.
Related Articles
- “Are You Working for an Unethical Organization?”
- “What to Do If You Work for a Toxic Boss?”
- “How to Find a Great Organization to Work For”
- “Are You Strong Enough to Be a Voice of One?”
- “Leading from Below”
- Amy E. Gallo, “How to Speak Up about Ethical Issues at Work,” Harvard Business Blogs
Resources for You
- National Whistleblowers Center (run by private attorneys, also with an attorney referral service)
- U.S. Department of Labor Page on Whistleblower Protections
Postscript: Quotations on Ethical Leadership
- “Decide what you stand for. And then stand for it all the time.” -Clayton Christensen, author, How Will You Measure Your Life?
- “One of the most valuable things any of us can do is find a way to say the things that can’t be said.” -Susan Scott, Fierce Conversations
- “It’s easy to stand with the crowd. It takes courage to stand alone.” -Mahatma Gandhi
- “Speak your mind, even if your voice shakes.” -Margaret Eliza Kuhn, activist
- “Having knowledge of an unethical act and allowing it to continue can spread a contagion that can affect multiple beings in society.” -Bertrand Russell
- “When an employee is confronted with a suspected breach, they will need to decide whether to alert their manager, compliance officer, and/or external regulator.” -Francine E. Love, founder and principal attorney, Love Law Firm
- “Supervisors, principals, and chief compliance officers all have personal liability. You can’t just continue to work where there are significant [unresolved] issues.” -Janaya P. Moscony, CFA, president of SEC Compliance Consultants
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Gregg Vanourek and Bob Vanourek are leadership practitioners, teachers, and award-winning authors (and son and father). They are co-authors of Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations, a winner of the International Book Awards. Check out their Leadership Derailers Assessment or get their monthly newsletter. If you found value in this, please forward it to a friend. Every little bit helps!
