Loyalty vs. Ethics: From the White House to the Workplace

Published: Jan 24, 2019
Modified: Mar 25, 2020

By Stephen M. Goldman, Esq., Ph.D.

What happens to an organization's credibility when its leadership is accused of wrongdoing? How should managers and employees handle conflicts between loyalty to the organization and its leaders and the desire to do the right thing? What to do when organization in the cross-hairs is the White House? While the stakes then have national implications, the decision-making process reveals lessons for all organizations seeking to maintain their reputation for integrity.

Former White House press secretary Scott McClellan’s new book What Happened? raises these issues starkly. By writing the book McClellan had to choose between loyalty to President Bush and his advisors and higher ethical values. Such choices are always difficult. It’s impossible to believe that McClellan was motivated by money. Whatever he’ll make on his book, it can’t equal the long-term prestigious job prospects, lucrative compensation, and security he would have enjoyed as a loyal former member of a Republican White House team had he remained silent.

When wrongdoing is ongoing in any organization, people usually find out about it sooner or later. From sexual harassment to racial stereotyping to revenue manipulation, wrongdoings may encompass misfeasance at the highest level or may originate lower down the corporate ladder. Should people—can people—legitimately reveal such wrongdoing? People who place loyalty above everything would say “No.” Yet the notion that loyalty to one’s employer trumps all other ethical obligations is a dangerous one.

While loyalty is important and we rightly pay great deference to it, when it becomes the smokescreen to hide wrongdoing, higher values should overcome it. People with a robust commitment to integrity won’t be content to work for companies that send the message “loyalty to the company” must trump their commitment to honesty. Instead, it’s up to management to create, instill, and consistently enforce a program that clearly supports honesty and integrity.

That may sound easy, but it isn’t. Knowing how to “do the right thing” is something that must be learned. Most problems require specific thought and conscious decisions to use proper protocols for sound decision making.

Principled Decision Making
Ethical issues aren’t always black-and-white, and because individuals’ ethical sensitivities vary broadly, managers must evaluate each individual case to ensure their protocols are followed. How? In my book, Temptations in the Office, I describe a process called the “Foursquare Protocol for Managing Ethical Decisions.” In short, here’s how it works:

  1. Dig into the facts. Seek out a complete account of the situation, including facts and acknowledgement of biases.
  2. Examine individual reactions to past solutions. If you want to make effective decisions today, you must understand how past responses played out: what worked, what didn’t, and what stunk to high heaven.
  3. Gauge similarities with past situations. Recognize the significant particulars between the current problem situation and past situations.
  4. Analyze your decision-making process. Don’t overestimate—or underestimate—instincts and rational analysis. Instead, use them as “checks and balances” against each other.

Most instances of abuse can be traced back to sex, greed, and/or power. Set up your organization for a successful reputation by establishing clear ethical policies and procedures, as well as a few other items:

  • Develop a strong top-down communications plan and encourage upward feedback and consistent enforcement. This type of internal branding, behavior, and performance management program is just as important as a company’s external promotion of those values.
  • Because both good and bad conduct are contagious, make sure your senior management team models the appropriate behavior internally and externally.
  • Make sure your external relationships with business partners, clients, and customers reflect “who you are” as an organization. those relationships are an opportunity to support or harm your brand. Your Website, your customer service policies and scripts, and your marketing materials send a signal of what your values are. In many cases, perception is reality, so good crisis communications and public relations plans are essential.

Organizations that establish a strong ethical environment are likely to enjoy a more pleasant, productive work environment, a good reputation, and avoid expensive legal and public relations issues. Establishing such an environment requires purposeful thought, effort, and commitment; its  rewards are well worth the investment.

About the Author(s)

Stephen M. Goldman, Esq., Ph.D., is a professor of law at  the Catholic University of America’s Law School and counsel in Sands Anderson Marks & Miller’s business and professional litigation practice in McLean, VA. He is a member of the Insurance Coverage Subcommittee of the Litigation Section of the ABA and a managing editor of Coverage, the section's journal.

Dr. Goldman is the author of Temptations in the Office: Ethical Choices and Legal Obligations, (Praeger, 2008) and coauthor of Restoring Trust in Corporate Directors: The Disney Standard and New Good Faith (American University Law Review, 2006). Contact him at www.sandsanderson.com