A Checklist to Keep You From Giving Yourself a Black Eye

Every conscientious leader knows that one ethical breach by one employee can wreck an organization.

They also worry good employees can do something bad because they were unaware of the implications of their actions. This checklist will help executives make ethical decisions and, as important, build a culture and reputation for ethical behavior—and that opens opportunities, attracts good people, and protects you against error.

  1. Definitions: Morals are general rules of behavior; ethics are rules that apply morals to practical situations.
  2. Intuition: In the movie Heist, Robert DeNiro had the line, “When there’s doubt, there’s no doubt.”
  3. Resources: See The Index of Management Terms & Practices term 1.1 Ethics & the law.

The Iron Triangle of Ethical Management Decisions: Ethical, Legality, Financial

Organizations progress when managers make decisions. A decision can be to act or not to act. Decisions can be large or small, expected or unexpected, about opportunities or crises, and obvious or subtle. No big decisions, however, are simple.

But all management decisions have three dimensions: their ethical, legal, and financial implications. For example, the decision to replace a software system might seem straight-forward. But will it put anyone’s job at risk? Might customers suffer a loss of service? Will you lose information critical to contract performance or regulatory compliance? Did your current vendor get a fair chance to correct deficiencies? Who will be responsible for inevitable mistakes when switching systems? In short, will you have treated others as you would want to be treated?

The worst mistake is not pausing to discuss the ethical implications of a big decision. No experienced manager would say aloud, “Oh, nothing can go wrong.” The first step to avoiding that classic error is to write down the decision in as few words as possible:

Decision summary (phrase as a yes/no question)



Again, most ethical breaches occur when no one stopped to ask if a decision had ethical consequences. This can happen easily when managers are stressed and working on unfamiliar issues. Just calling the question can avert disaster.

  1. Does this decision follow the Golden Rule?
  2. Does it pass the four tests in the Pledge of Managerial Power?
  3. Does it comply with our company’s and industry’s value statements and codes of ethics?

Write notes here:


Some decisions might benefit from legal counsel. Answering these yes/no questions might lead to reviewing your contracts or getting a regulatory update. Employees want their bosses to obey the spirit, not just the letter of the law.

  1. Would an objective observer agree this decision meets the spirit of the laws?
  2. Would we be in meaningful compliance with all relevant regulations?
  3. Would we make a customer or vendor suspect we have violated our contract with them?

Write notes here:


The point here is not to decide if an unethical or illegal action is financially worthwhile. It is rather to help find a way to make a decision that is clearly legal, ethical, and worthwhile. Cheaters can prosper—but only at the cost of their organizations.

  1. What are the short-term costs of doing the right thing?
  2. What are the long-term costs?
  3. How can we mitigate possible harm to others?

Write notes here:

Decision: GO / NO-GO / REVISE (circle one)

General Lessons & Action

Write notes here:

Ethical Muscle Memory

Consider creating an ethics committee, which can be simpler than those in hospitals and universities. Again, start at term 1.1 Ethics & the law in The Index for best practices. As your organization grows, you will naturally find yourself in new territories of ethics, so review your code of ethics annually. But the first and deepest principle is to keep asking how your decisions affect people, not just return.

Relevant Terms

Related Posts