Turmoil at the Top

Imagine you work for an organization and you notice numbers that are questionable. You want to report the issue to your superior however you have knowledge that people who have reported similar instances are no longer with the company.

Additionally, it is a known fact you DO NOT question the decisions and actions of your superior. What would you do?

As surreal as this situation may seem, this is the type of toxic culture that has occurred in well-known technological company Toshiba. Recently Toshiba CEO, Hisao Tanaka resigned in lieu of a major accounting scandal.

Toshiba has been overstating their profits by $1.2 billion over a period of seven years, which includes the terms of two additional CEOs. No one reported these issues due to the culture of not questioning the actions of their superiors.

As ethical leaders, it is important to set a proper tone at the top.

What if Tanaka had taken a stand for what was right and broken the chain of this scandal? How different would this scenario look?

They more than likely would have taken a hit due to the actions of past CEOs and toxic culture but imagine the statement it would have made not only about Toshiba’s new leadership, but to its stakeholders. This action would have demonstrated that he recognized their unethical past and wanted to make things right by being transparent. In that scenario, do you think his honesty and desire to change the unethical practices of the past would have made an impact on stakeholders?

Accountability is an important characteristic of an ethical leader and had Tanaka taken accountability for the actions of his predecessors instead of following the trend, I imagine he would not have resigned and their stocks prices wouldn’t be down 20% since April.

Now that the scandal is being unraveled, they want to right their wrongs. However, they no longer have the public’s trust and that will take time to restore.

The reality is you too could potentially be in a position such as Tanaka or the employee who is pressured not to question the actions of superiors.

My call to action for you, ETHICAL LEADER, is to look at the big picture of your situation, know what procedures and policies are in place both inside and outside of your company, and make the right decision. Your decisions ultimately impact you, your family, friends and organization.

As Always, Ethics First.

— Ronald Taylor
Student Programs and Development Specialist, NASBA Center for the Public Trust (CPT)