Does current ethics training enhance organizational integrity? | Society of Corporate Compliance and Ethics (SCCE)

[author: Silvija Vig, PhD*]

Ethikos 39, no. 1 (January 2025)

The world is changing rapidly, and old ways of leading will not take us where we need to go—especially due to environmental, social, and governance (ESG) criteria. Therefore, traditional models of leadership development and ethics training are no longer sufficient to address the complexities and pressures of today’s business environment. As organizations increasingly prioritize ESG criteria, there is a pressing need to rethink how we approach ethics training. The core of this transformation lies not just in developing skills but also in fostering a deep, personal commitment to ethical behavior through self-awareness and conscious leadership. Today’s leaders can’t focus solely on what they do; they also need to question why they do it. They must be curious about the world and aware of the impact their organizations have on it. It is no longer enough for organizations to merely adhere to laws, regulations, and codes of ethics. Organizations with robust ethics and compliance programs must consciously reflect on their identity and the impact they aim to create in the world. To achieve this and transform organizations, it is essential to simultaneously develop both organizational culture and leadership and management at all levels.

Urgent issues in business compliance

The results of the 2023 Global Business Ethics Survey on the state of ethics and compliance reveal that businesses are facing a higher risk of misconduct and loss of trust than ever.^[1] According to the survey, issues such as pressure, workplace misconduct, reporting of observed misconduct, and retaliation against employees who report misconduct are notably high. Furthermore, only a small percentage of employees believe they work in a strong ethical culture, and companies are not implementing the proven measures that could significantly reduce these risks.

Moreover, the results of the EY Global Integrity Report 2024 show that, although 58% of respondents believe compliance has improved, 25% of workers admit they would act unethically for personal gain. This percentage rises to 67% among board members and 51% among senior management.^[2]

Additionally, when considering the root causes that frequently lead to scandals—such as unrealistic aggressive goals, tight deadlines, destructive incentives, the “do more with less” mentality, and toxic leadership—we can conclude the situation is seriously alarming. It is crucial to address this issue and potentially revise the current approach to compliance or at least update ethics and compliance training.

Organizational integrity requires individuals of integrity

Organizations are made up of people, and to assess the integrity of organizations, we must first evaluate the integrity of their employees. Integrity is defined as the quality of being honest and having strong moral principles.^[3] However, for people to truly understand individual integrity and uncover their authentic selves, we need to examine a specific, often overlooked aspect that significantly influences intrinsic motivation. This aspect can lead to an “aha moment,” where employees become aware of the unconscious drivers behind their actions, enabling them to take control and make meaningful changes.

This approach has proven to be very effective because it helps participants make a crucial discovery. After such training, you often hear participants say, “Now I finally realize that I have a problem.” To be whole and embody integrity, people need to understand who they truly are, including their strengths, weaknesses, and vulnerabilities. Since organizations are composed of people, building integrity within an organization requires us to first become individuals of integrity.

Author Richard Barrett supports this view, believing that organizational transformation cannot occur without leadership transformation and that the culture will remain stagnant if leaders do not evolve.^[4] To shift an organization’s culture, we must either change the leaders or ensure they change themselves. Additionally, it is imperative to align the organization’s structures, policies, procedures, and incentives with the values and beliefs that define the culture we aim to cultivate. Thus, we can conclude that organizational transformation begins with the personal transformation of leaders and managers at all levels.

Can leaders really transform? Is change possible?

As Jim Collins, author of Good to Great, puts it:

There are two categories of people. The first category includes those who, even in a million years, will not subordinate their selfish needs to the higher goal of creating something greater and more permanent than themselves. For them, work will always be about what they can gain—fame, fortune, admiration, power, etc.—and not about what they can build, create, or contribute. The second category includes people who have the potential to change. The ability is within them; it might be suppressed, hidden, or even constrained by thick walls built around them as towers of protection, but the ability is still there. When they begin to work on themselves, through coaching or mentoring, and become self-aware or face difficult situations in life, they start to focus on their development.^[5]

Rutger Bregman, author of Humankind, also says that “most people, deep down, are pretty decent.”^[6]

Therefore, it could be said that people are fundamentally good (except for the 2%–6% of criminals that Steve Priest claims exist in every organization).^[7] However, because of the thick walls they have built around themselves to shield their unconscious fears, they often don’t allow their true selves to emerge.

Do we really know what our values ​​are?

First, we need to ask ourselves: What exactly are values? Values are “the ultimate goals of human motivation, guidelines for behavior and actions, reflections of our needs, and expressions of what is missing in our lives.”^[8] In summary, values are what motivate us. But do individuals truly know what motivates them? Often, when participants are asked at conferences or ethics training, “What are your values?” they usually respond with terms such as integrity, ethics, loyalty, honesty, and respect. However, if these were truly their values, they would always behave ethically. So why do individuals sometimes act unethically? What motivates them to behave this way, and what values lead to such behavior?

In his Seven Levels of Consciousness Model, Barrett explains that everyone operates at one of seven levels of consciousness, depending on the values they are guided by. According to the definition of values as arising from our needs, the goal is for a person to have all needs met at every level to be whole, complete, or a person of integrity. However, Barrett suggests that unmet needs from the first three levels can result in what he calls potentially limiting values, which may lead individuals to unethical behavior. If these needs are unmet, individuals might act out of fear rather than integrity.

• Level 1: Fear of not having enough: This is the most basic level, driven by financial insecurity or lack of resources. It can lead individuals to compromise their ethics to secure material needs.

• Level 2: Fear of not being loved: This involves seeking approval or acceptance, which can push individuals to act unethically to gain favor from peers or superiors.

• Level 3: Fear of not being enough: This stems from a lack of self-worth and can result in actions aimed at proving oneself, potentially leading to unethical behavior to gain recognition or status.

Moreover, Barrett explains that “if we are operating from the first three stages of psychological development, we are likely to make decisions based on the beliefs of our ego. In contrast, when we make decisions from the higher stages of psychological development, we are more likely to rely on our values.”^[9]

It is also necessary to emphasize that such fear can make people more susceptible to external pressures and situational factors, which can lead to unethical decisions.

According to some research, people act 40% based on their potential and 60% based on their fears, which are variously described as fear of failure, lack of confidence, self-doubt, and lack of self-belief.^[10] These unconscious fears open the door to negative external influences and weaknesses, making us more receptive to situational and external factors. It is well known that situational and external factors significantly impact unethical decision-making. However, it is important to emphasize that the greater our inner fears, the more receptive we are to these external factors. When individuals act out of fear or under pressure, they are more likely to take shortcuts, fail to see situations realistically, exhibit cognitive biases, and engage in unethical behavior. Once individuals become aware of these fears, they can control and change their behavior; otherwise, the fears control them. This lack of awareness is often why people find themselves in unethical situations without understanding how they ended up there.

Why don’t we notice our own incongruence?

One reason for unethical behavior is the lack of congruence: the disparity between our true intentions and actions. To illustrate this phenomenon, consider the example of a philanthropist who donates a large sum of money to a humanitarian organization. The question we need to explore is: What motivated this donation? As mentioned earlier, values are the “ultimate goals of human motivation.” If the philanthropist is genuinely benevolent, their decision would stem from the higher levels of Barrett’s model. However, their motivation might differ if they have unmet needs from the first three levels. If their decision is driven by the first level, they might aim to reduce taxes or gain some other benefit. If motivated by the second level, they might seek acceptance among friends, club members, or community members. If driven by the third level, they might seek fame or power. This discrepancy highlights incongruent behavior, which others may notice but the philanthropist did not recognize: this was their “blind spot.”

It is significant to note that people often recognize their blind spots more easily in others than in themselves. Therefore, becoming aware of these blind spots is critical for understanding and improving ethical behavior.

Motivation versus reason

When evaluating ethics—specifically, whether an activity is ethical or not—it is indispensable to distinguish between motive and reason: what motivates us to do something versus what prompts us to act. To clarify this difference, consider the example of a firefighter jumping into a burning house to rescue a child. The reason the firefighter jumps into the burning house is to save a child. But what is his motive? What drives him to risk his life in such a situation?

Earlier in the text, we stated that values are the “ultimate goals of human motivation.” So, what value leads a firefighter to jump into a burning house to rescue a child? Among other things, bravery is a core value. Without bravery, a firefighter would certainly not jump into a burning house. Some might argue that anyone would act heroically in such a situation, but this is not always the case.

Consider a real example: A few years ago in Zagreb, Croatia, a major storm led to a blocked drain in an underpass, resulting in a significant accumulation of rainwater. One driver didn’t notice the water, and when he approached, the car was dragged in and completely submerged in the center of Zagreb. Four people witnessed the incident. Two men stood by and merely commented, “He won’t make it out of there.” A girl nearby was screaming in panic and was unable to act. However, another girl, walking her dogs along the overpass, heard the screams, ran down, and jumped into the dirty water—despite it being nighttime. She managed to pull the driver—who was disabled with one missing leg— out of the car. This example highlights that, of the four people present, only one responded positively and saved the driver’s life.

When journalists later asked her if she considered herself brave, she replied, “No, it’s normal for me; I would always do it.” When we live according to certain values, we are often not consciously aware of them; they simply become our way of life.

The values that participants mention when asked about their values during training and conferences are often not their true values but rather “desired values.” It is fundamental for employees to be aware of this distinction. This moment of awareness creates an aha effect. Once employees become conscious of it, everything changes. To act ethically, we must understand our intentions, motivations, and triggers—not just our goals. Individuals will consistently act ethically when their motives (ethical intentions) and reasons align and are congruent. However, if our intentions stem from an inner fear of which we are unaware—even if our reasons are ethical (e.g., philanthropic activities)—people will sense our incongruence and may not trust us. They will recognize that our true intentions are not ethical.

A new approach to ethical training

We can conclude that traditional ethical training alone is insufficient to raise the integrity level. As stated at the beginning of the article, organizational transformation starts with transforming ourselves. While an organization must have established policies, procedures, and processes, these can only influence behavior to a certain extent. A far more significant factor is the transformation of leadership and managers at all levels. For this transformation to occur, leaders and managers must become aware of the obstacles that unknowingly hinder their ethical behavior.

Today, ethics and integrity training should focus on teaching individuals how to become self-aware, understanding why they do what they do and recognizing what unconsciously drives them toward unethical behavior. When they become aware of these factors, they will be better able to control them, pause in questionable situations, activate their self-regulation mechanisms, and use critical thinking effectively to bring unconscious biases and motivations into conscious awareness. Critical thinking encourages decision-makers to question their own and others’ biases, reasons, motivations, and perspectives. It allows individuals to pause, remain objective and open-minded, and analyze issues based on hard evidence rather than personal opinions. This approach helps us understand what truly happened rather than what our brains might automatically assume. Additionally, being transparent and authentic involves honestly expressing thoughts and feelings without misrepresenting ourselves. Combining these four elements creates the foundation for a culture of integrity.

Conclusion

The transformation of ethical behavior within the organization can be shown with the Four Stages of Competence.^[11] At the beginning, when organizations start conducting such training, employees are typically unconsciously incompetent: they don’t know that they don’t know. However, the organization should not remain at this stage because ignorance is no excuse. Being unaware of something does not justify unethical behavior. As the organization educates employees about the four key elements and they become aware of their true values, they transition to being consciously incompetent: they know that they don’t know. Through practice and applying acquired knowledge, they become consciously competent: they know they can do it with conscious effort and constant concentration. With the support of ethical leadership and a stimulating organizational culture, employees can eventually reach the stage of being unconsciously competent: they know they can do it without overthinking.

It is a mechanism not only to dictate “how employees should behave” and what is expected of them but also foster self-motivation to adhere to ethical values and compliance policies without relying solely on the code of ethics.

Takeaways

• The organization’s transformation begins with its people’s transformation.

• The greater our inner fears, the more susceptible we are to situational factors.

*Silvija Vig, PhD is a Compliance & Ethics Consultant at CODUPO Compliance in Zagreb, Croatia.

1 Ethics & Compliance Initiative, ECI’s Global Business Ethics Survey: The State of Ethics & Compliance in the Workplace: A Look at Global Trends, 2023,

2 EY, Global Integrity Report 2024,

3 Oxford University Press, Oxford Advanced Learner’s Dictionary (Oxford: Oxford University Press, n.d.), s.v. “integrity,” accessed February 2, 2024.

4 Richard Barrett, Evolutionary Coaching: A Values-Based Approach to Unleashing Human Potential (Lulu Publishing Services, 2014).

5 Jim Collins, Good to Great: Why Some Companies Make the Leap and Others Don’t, (New York: Harper Business, 2001).

6 Rutger Bregman, Humankind: A Hopeful History (New York: Little, Brown and Company, 2019).

7 Steve Priest, “ECI Blog: The Ethics & Compliance Initiative,” ECI (blog), accessed December 2, 2024,

8 Barrett, Evolutionary Coaching: A Values-Based Approach to Unleashing Human Potential.

9 Barrett, Evolutionary Coaching: A Values-Based Approach to Unleashing Human Potential.

10 John Whitmore, Coaching for Performance: The Principles and Practice of Coaching and Leadership. Fully Revised 25th Anniversary Edition, (London: Hachette UK, 2010).

11 Richard Barrett, The New Leadership Paradigm, (Lulu Publishing Services, 2011).

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