What is the enemy of ethical decisions in companies? Quite simply it’s silence. Silence when an issue arises, silence when choices are being made, silence after they’ve been made and the effects reverberate.
A well-liked senior vice president at a big health-care company lost a key promotion and left in 2012 because he never disagreed with colleagues during meetings. “The man’s failure to manage conflict derailed his career,” recalls David Dotlich, a leadership and succession coach. His research has identified “eagerness to please” as one of the top reasons that executives fail.
It also occurs with ordinary employees who fail to speak up about ethical abuses or share with their supervisors or leaders what they think might be going wrong.
Silence is a symptom rather than an issue in its own right. Many times, silence is a virtue, showing people are listening, paying attention. Too often though it reveals something is going wrong–for example an inability or refusal to deal with conflict. That and toxic silence are common weakness of both boards and teams.
Faced with complete consensus, one leading CEO always adjourned a meeting. He insisted everyone go away to find reasons to disagree. He demanded alternatives that made people think more deeply about an issue. In fact, without disagreement he argued, you’re not really ready to make a decision.
CEO Mary Barra hit the news recently by revealing she’s forcing everyone at GM meetings to state their opinions, even when it causes tension. This is hardly in the GM tradition. It must be fun watching previously passive execs being cajoled into saying “what do you really think then?”
As the ethical disaster over the faulty ignition switch shows, GM culture means people try hard to avoid bringing bad news to higher-ups. It’s been that way for decades. Practically no one is ever accountable for a decision, partly because most decisions end up in committees. Even then the process is a charade, because key participants agree privately on the outcome ahead of time.
Virtually no one at GM gets fired for performance. Rare threats to the established order can almost always be waited out. Combine those traits, and you get an organism, the GM culture, that is highly evolved for survival, but not for making ethical choices.
Barra is trying to change all that. She’s attempting to alter the mind-set by behaving differently to how any GM CEO has previously behaved in decades. Through her example and a CEO’s influence she is changing how everyone else reacts every day. As she says, “Culture is how people behave.” 
Carlos Ghosn the extraordinary CEO who runs three car makers at once—Nissan, Renault and the Russian AvtoVaz, which makes the top-selling Lada–has been demanding such tension for years. He requires debate even in cultures like Latin America where second-guessing is preferred or where public confrontations are usually avoided, as in Japan.
“It’s extremely important” says Ghosn “there is a clear process in formal forums where people debate questions there are presentations about the pros and cons of different options and “you allow the competent people to express themselves and the people who have something to say to express themselves. 
That is particular so around ethical situations. Asking “is there an ethical implication” may be alien to many executives, but increasingly that’s what they are being required to do, especially in financial services.
A staggering 85% of all American executives for example admit to being afraid to raise concerns they have at work. Most are reluctant to speak up about things that will certainly cause conflict. No wonder so many companies find “ethics” distasteful to even mention by name, let alone debate real concerns. 
In our highly connected, collaborative world, transparency and openness are increasingly seen as unavoidable. But we tend to regard openness as the ideal when it is really only a beginning. We must learn to see openness as a way of deliberately generating conflict and view conflict as “thinking”.
One of the richest sources of potential disagreement in organisation is around ethics and acting in a socially responsible way. Profits, sales and the demands of shareholders so often push executives to miss the essential long term issues around ethical performance—for silence to prevail.
Paul Polman, chief executive of consumer goods giant Unilever, challenges the current corporate status quo. He is scathing of companies that claim their hands are tied by fiduciary duty to maximise profits for shareholders in the short-term.
Nor has he shirked from having a direct conflict with hedge funds, which he sees as messing up a company’s share price with their excessively short-term focus. He’s banned quarterly reporting to the City, and reduced the holding of Unilever shares by hedge-funds from 15% three years ago to less than 5%. In turn this has reduced fluctuations in the company’s share price. He goes on to ask:
“Why would you invest in a company which is out of synch with the needs of society, that does not take its social compliance in its supply chain seriously, that does not think about the costs of externalities, or of its negative impacts on society?”
Taking account of “externalities”—economist jargon for outside events and issues—is what ethical decision making is all about. Prior to decision these only come out of the woodwork by allowing conflict and encouraging debate.
In summary, ethical leaders need to actively encourage conflict which involves vigorous debate, and abhor silence when it means people are not speaking up about what matters. To be afraid of conflict means you are almost certainly fearful of silence.
- J. Lubin, “The High Cost of Avoiding Conflict at Work”, Wall Street Journal, February 2014
- G. Colvin, Mary Barra’s (unexpected) opportunity, Fortune September, 2014
- D. Roth The Monk CEO: How Carlos Ghosn Manages 3 Companies, $140B in Sales and Still Stays Human, Linkedin
- See for example, Margaret Heffernan: Dare to disagree, TEDGlobal 2012