How to Align Executive Candidates to Company Ethics

By Ronny Cheng

 

Every company has its own set of guiding principles for conducting business and evaluating the impact that their business has on the world around them.

All for-profit companies are focused on generating revenue, but as outsourcing, automation and the financial crisis of 2008 have shown us, a singular focus on profit can have a negative impact on employees, the environment, and even the economy.

When evaluating executive candidates, it is crucial to understand their ethical leanings, the way they make decisions, and how they evaluate the tradeoffs and effects of their plans. Increasing your company’s profit is important, but you don’t want an executive who is willing to make ethical compromises or cut corners to accomplish this.

De-Regulation and Doing Business

The Trump Administration’s appointees to regulatory agencies signal that he intends to remove many regulations during his presidency. For example, the new head of the EPA is quoted as saying:

“The American people are tired of seeing billions of dollars drained from our economy due to unnecessary EPA regulations, and I intend to run this agency in a way that fosters both responsible protection of the environment and freedom for American businesses.”

Given this lenient regulatory climate, it is important to select a CEO who will hold themselves to the ethical standards that guide your company. You may not have to answer to regulatory agencies, but public opinion is another story entirely and can have a huge impact on your business and brand.

The Impact of Corporate Ethics

Once hired, an executive candidate will have much more authority and autonomy, so it’s vital to understand how they approach ethically challenging/ambiguous situations before handing them the reigns to the company.

Your company’s core values and mission are more than just words, and you need an executive who aligns with the ethical standards that guide your organization. Corporate scandals spread like wildfire online, and apart from the cost of damage control and lawsuits, these events have the potential to damage brand reputation.

The last thing you want is for a CEO hire to leave a legacy which makes it impossible to attract a leader who is actually in line with your company’s mission and ethics. Furthermore, this brand damage can impact a company’s ability to attract talent at all levels, and can even damage relationships with investors and business partners.

Ethical Alignment with Executive Candidates

So, it’s important to select an executive candidate who shares the values and ethical standards of your company, but how can you tell? Everyone wants to look good in the job interview, and even executives will nod and agree with ideas that they really don’t care about.

In order to find an executive hire who is professionally and ethically competent, you need to examine their past actions, the reasoning that led to these actions and the ethical code that will inform their actions in the future. Basically, you need to use some awesome executive interview questions. Don't forget to also use a best-in-class executive recruiting software system to make the entire pipeline management a breeze.

How to Evaluate Past Actions

The actions an executive have taken in the past are an indicator of how they will act in the future.

Examine the careers and accomplishments of your executive candidates for complex, potentially ethically challenging situations. Then, discuss these defining decisions with candidates and ask them to walk you through their decision-making process and the ethical principles that came into play.

Asking executive candidates questions like these will help you to see how ethics enter into their decision-making and how they have (or haven’t) made ethical decisions in the past.

• What has been the most ethically challenging business decision you’ve made as a leader?
  • Why was it challenging?
  • What was at stake?
• What are the principals and ethical standards that have led you to this point in your career?
  • Has there ever been a situation that made you question these principals?
  • When have these principals served you best?
• How have you evaluated the side-effects and fallout of decisions before making these decisions?
  • Which stake-holders were influential in your decision-making process?
  • When were you satisfied that “due diligence” has been achieved in terms of research?
  • Have you ever encountered side-effects that caused you to alter your course of action?
• Have you ever been faced with the need to drastically reduce operating costs?

• What did you cut from the budget?
• How did you make this decision?

• Have any of the decisions you’ve made as a leader had a negative impact on parties outside of your company?
  • How did this fallout affect your company’s brand?
  • What did you do to repair the damage done?
• What have you learned from situations that have challenged your ethical standards?

Evaluating Present/ Future

Examining the past actions of an executive will tell you a lot, but you want to be sure that their ethical standards are consistent with what you’ve learned. Your company will present them with new challenges, and you should ask them questions that relate to ethical challenges faced by CEOs of your organization.

• What opportunities for growth do you see for our company?

• What ethical challenges could be associated with these growth opportunities?
• How would you investigate and work with these ethical challenges?

• What about our company’s mission and ethical standards appeal to you?

• What about these standards don’t appeal to you?

• When orchestrating a merger with or acquisition of another company, how would the security of employees play into your decision making?

• What about the security of employees in the acquired company?

• How will your ethical standards help to maintain corporate integrity?
• How would you ensure that all employees understand our company’s ethical standards?
  • How would you respond to employee actions that violated these standards?
• Which stakeholders would you consult with before making an ethically consequential decision?

They say there’s no such thing as a free lunch, and prioritizing profit over anything else can result in damage. Evaluate your executive candidates to discover their ethical code and uncover how this code has led them to act in the past. This way, you can anticipate how an executive’s ethics will guide their business decisions as they lead your company.

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