Why are some leaders tone-deaf?

Article originally published in the Philadelphia Business Journal on July 28, 2014

When interviewing candidates for senior leadership positions, I always ask about their views on tone at the top and institutional culture, and what role these play in the success of the enterprise. Tone and culture are also important factors to assess during a leader’s performance review. In my experience as a CEO and as a board member assessing the performance of other CEOs, both factors are critical in the long term success of any enterprise.

Tone at the top encompasses the ethical standards to which the CEO holds himself or herself accountable, as well as his or her co-workers in the organization. Institutional culture encompasses the values by which employees conduct business, as well as interact with each other and the organization’s stakeholders.

A policy that states “we are going to obey the laws of the countries in which we operate” seems so obvious. If it were so obvious, why is the policy sometimes ignored, and why do some employees and their companies get criminally charged with breaking anti-trust laws, environmental laws, or the foreign corrupt practice act, which prohibits bribing foreign officials? Why do internal auditors find misconduct by some employees?

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