Building a Pipeline of Ethical Leaders

Katherine noticed it during a team meeting when the quarterly numbers came up short. While others pointed fingers or stayed silent, one of her mid-level managers, Marcus, spoke up. “I approved those expense reports without double-checking. That’s on me.” It was a small moment, but Katherine, the division VP, had been watching Marcus for months: how he gave credit to team members for successful projects, how he stayed late to fix his own mistakes rather than delegating them to junior staff, how he treated company policies as principles rather than suggestions.

Organizational leaders, like Katherine in this scenario, spend a lot of time and company resources trying to get other employees to act just like Marcus. Typically, that involves constraining potential corner-cutters and rule-benders with codes of conduct, compliance training and HR jujitsu that root out “bad apples.” 

But if they truly want to foster workplace integrity, they may be getting it all wrong. Addison Maerz would argue that efforts should be directed instead at the Marcuses of the world, the moral exemplars who, with the right development and support, could become ethical leaders who shape an entire organizational culture.

It may be a paradoxical perspective, but Maerz, an assistant professor at California Polytechnic State University, has the evidence to back it up. His research shows that developing a cadre of ethical employees is less a matter of deterring misconduct and more about amplifying the moral reasoning of employees who are already inclined toward integrity.

The honesty-humility dimension

Maerz, who completed his MSc and PhD at Smith School of Business, worked with Madelynn Stackhouse of the University of North Carolina at Greensboro to examine how personality traits interact with leadership to shape negative workplace behaviours. Their work focused on a dimension of personality known as honesty-humility, which reflects the tendency to act with sincerity and fairness even when a situation can be exploited for personal benefit. This personality dimension has been shown to be a strong predictor of workplace integrity.

Across two studies involving over 1,000 employees and supervisors, Maerz and Stackhouse found that ethical leadership plays a key role in helping employees translate their moral worldview into workplace behaviour. As Maerz explains it, employees who score high in honesty-humility carry around internal frameworks for understanding ethical situations, but these frameworks remain latent. The frameworks need a spark from contextual cues to be activated — cues that come from ethical leaders who articulate clear organizational standards, model appropriate behaviour and hash out thorny issues with employees. Employees predisposed to honesty respond to these cues, developing a sharper sense of right and wrong when workplace challenges inevitably arise.

These findings suggest that if organizational leaders want to stamp out bad behaviour, they shouldn’t focus on harvesting the bad apples in their ranks. “A more powerful route involves helping people connect their values and work decisions to real ethical consequences,” Maerz says. “When employees feel part of a system that genuinely values fairness and moral reasoning, they tend to self-regulate more effectively than when they’re simply afraid of punishment.”

The role of enforcement 

If ethical leadership primarily benefits people who are already ethical, what does that mean for employees who are not predisposed to moral behaviour?

Maerz and Stackhouse tested this question, examining whether ethical leaders could deter misconduct among less scrupulous employees by shaping employees’ perceptions that misconduct will be detected and punished. The theory seemed sound: Even if someone lacks internal moral constraints, clear consequences should discourage bad behaviour. 

The results were mixed at best. While strong ethical leadership did create perceptions that misconduct would be caught and punished, the deterrence mechanism did not reliably translate into fewer instances of misbehaviour among low-integrity employees in the way researchers expected. For these employees, following ethical leaders mostly becomes a cost-benefit calculation — “Can I get away with this?” — rather than genuine change of heart.

This does not mean organizations should give up on such employees. Consistent enforcement, robust ethics programs and transparent reporting channels still matter, says Maerz. But his research suggests these approaches prevent major infractions more than they cultivate genuine ethical growth.

The key is understanding their role. “Keep deterrence measures as the backstop,” says Maerz, “but direct leadership energy toward modelling values and making ethical expectations visible in daily routines.”

The first step, he says, is training leaders to create the conditions where ethical development happens naturally. This means moving beyond generic ethics training to developing leaders who can: 

Articulate ethical standards with specificity, not platitudes. Ethical leaders embed standards into daily routines, policies and performance evaluations, providing the contextual cues necessary to continually refine employees’ moral knowledge. What does integrity look like for the sales team when facing a difficult quarter? How should your engineers handle pressure to cut corners on testing?

Model decision-making processes, especially in grey areas. Ethical leaders explicitly discuss the moral dimensions in strategic decisions, not just commercial or operational factors. When leaders visibly wrestle with ethical trade-offs, they signal that moral reasoning is central to how the organization operates.

Create space for conversations on ethical dilemmas without seeming preachy. Ethical leaders foster an environment where people can raise ethical concerns, discuss difficult trade-offs and learn from mistakes without career-ending consequences. Ethical expertise develops through reflection and feedback over time, not one-off training, says Maerz. 

Helping high-integrity workers to shine

The second step is for organizational leaders to identify high-integrity employees and position them strategically. While there are validated personality assessment tools that can identify people who are high in honesty-humility, Maerz cautions against using such assessments as universal hiring filters (though they may be useful for executive positions where modelling ethical conduct is central to the job).

A better approach is for managers to observe the small, consistent ways employees handle fairness and responsibility, Maerz says. Employees who would score relatively low in honesty-humility are more likely to rationalize self-serving behaviour or treat ethical rules as flexible guidelines. Employees who would score high have much different thinking processes.

Look for employees who:

• acknowledge their errors openly rather than deflecting blame;
• share credit for team successes rather than claiming individual glory;
• maintain ethical standards even when unsupervised or when shortcuts would be easier; and
• treat ethical rules as genuine principles rather than flexible guidelines. 

Once employees with strong ethical inclinations are identified, the strategic imperative becomes clear: invest in their development and influence. That means offering stretch assignments, mentorship opportunities and positions in advice networks. Making these employees central to how decisions get made scales up their influence.

Perhaps the most compelling aspect of this research is its long-term implications. As Maerz notes, one crucial unanswered question is whether ethical leadership leaves a lasting imprint on how people think about moral issues even after that leader is gone. By identifying and supporting employees most receptive to ethical behaviour throughout the ranks, organizations need not depend on any single individual. They create a culture in which ethical reasoning is woven into how people think about problems, make decisions and mentor others.

It is a reminder that in ethics as in so much of business, the highest returns often come from investing in your strengths, not just managing your weaknesses.