This year the Olympics are in Rio de Janeiro, Brazil and if you heard or read about the leadership of the country, you would know there are many scandals going on. This means the leadership of the country is less than stable. A recent article in the Globe by Mark Pastin who is the CEO of Council of Ethical Organizations gives lessons to staying ethical.

Mr. Pastin is a ethics consultant and offers 5 practical lessons from ethical leaders:

Say less, but say the truth  When the CEO speaks every work is measured by your employees, doubted by journalists, parsed by analysts, and weighted against laws and regulations by a hungry plaintiff’s bar. CEOs do not offer their opinion, for when they speak, they are speaking for the company. They have to limit what they say to what they know or think they know to be true.

Know the stakeholders While shareholders are important, companies have a wide range of relationships which they depend on. CEOs should try to balance them all so they align in support of the company.

Surround yourself with truth tellers This will one of the hardest tasks of the CEO, find direct reports or people in the organization who do not want the top job but will tell you the truth about what is happening in the company, even when it is uncomfortable to do so. Many of your direct reports will not tell you the complete truth, because if they did they would be out of the running for the promotion or bonus.

Learn for yourself   Nothing beats field trips to the offices where policies are put into place and what works and does not work from corporate.

Pass on some opportunities  In all companies, there will be opportunities that seemingly could make money, but are rejected because they are iffy situations. For example who gets the big bonus? money shouts volumes about what is said to be policy and what is reality.

Linking to dividend paying stocks, most large company executives are in bubble, think about tours of the President to offices or stores to see. What do they see? When a company goes off the rails, such as you see in Brazil, the good money will move to the sideline. If you see the company is not ethical (lawsuits result which means senior management is managing the lawsuits rather than new or existing business). There are many challenges for a company, it is easier to be on the ethical side and more long term rewarding if they are. How does your company respond to problems?

There are more questions than answers, till the next time – to raising questions.