The Magazine of Corporate Responsibility

How Do You Fix Your Reputation After An Ethical Lapse?

by Larry Kahaner
The McGowan Blog on Business Leadership and Ethics

It's nice to be on the right side of ethics, but sometimes we falter. We’re only human. So the question becomes: How do you rebuild your reputation after an ethical or even legal lapse in judgment?

TrustSome answers come from a report titled The Recovery Of Trust: Case Studies Of Organizational Failures And Trust Repair published by the Institute for Business Ethics. Authors Graham Dietz And Nicole Gillespie studied ethical breaches that occurred at six companies:  Siemens, Mattel, Toyota, BAE Systems, The BBC and Severn Trent. Each case was different as was each response. What I like so much about the report  was just that – each response was unique to that case. Many reports try to produce a list of ethical “do’s and ‘don’ts” gleaned from the case studies, but the authors here treat each incident individually showing how the response worked or didn’t work.

Interestingly, the authors link trustworthiness to ethics and suggest that they share a common foundation. I like this idea because we all understand what it means to be trustworthy even if we’re a little fuzzy about the meaning of ethics. They write:

“Trustworthiness and ethical conduct share many common themes, including the centrality of values such as integrity, actions matching words, promise fulfillment, trying one’s best, showing genuine concern for others and fairness.

Principles of ethics underlie and inform our expectations of what constitutes trustworthy behavior.

To abuse another’s trust suggests an ‘inauthenticity’ in the way we have portrayed ourselves that, in many situations, would be unethical.

A reputation for trustworthiness and strong trust relationships are founded on a robust ethical culture, supported by leaders, systems and policies that are designed to nurture employees’ trustworthiness and trusting relations at work.

Thus, as part of a robust ethical culture, trustworthiness needs to be fostered.”

The report suggests a hint of commonality in the reviewed cases, most notably that there is no magic bullet, no one thing that rebuilds reputation: “…trust failures typically take years to resolve, and can be both debilitating and very costly. A clear implication is that it pays to invest proactively in designing an organizational system that encourages and supports trustworthy conduct.”

These are great stories and well worth reading.

Larry Kahaner is Editor of The McGowan Blog on Business Leadership and Ethics, where this post was originally published.

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