The key operating question of moral management is

Moral Person and Moral Manager: How EXECUTIVES DEVELOP A REPUTATION FOR ETHICAL LEADERSHIP Linda Klebe Trevino Laura Pincus Hartman Michael Brown P lato asked, which extreme would you rather be: "an unethical person with a good reputation or an ethical person with a reputation for injustice?" Plato might have added, "or would you rather be perceived as ethically neutral—someone who has no ethical reputation at all?" Plato knew that reputation was important. We now understand that reputation and others' perceptions of you are key to executive ethical leadership. Those others include employees at all levels as well as key external stakeholders. A reputation for ethical leadership rests upon two essential pillars: perceptions of you as both a moral person and a moral manager. The executive as a moral person is characterized in terms of individual traits such as honesty and integrity. As moral manager, the CEO is thought of as the Chief Ethics Officer of the organization, creating a strong ethics message that gets employees' attention and influences their thoughts and behaviors. Both are necessary. To be perceived as an ethical leader, it is not enough to just be an ethical person. An executive ethical leader must also find ways to focus the organization's attention on ethics and values and to infuse the organization with principles that will guide the actions of all employees. An executive's reputation for ethical leadership may be more important now than ever in this new organizational era where more employees are working independently, off site, and without direct supervision. In these organizations, values are the glue that can hold things together, and values must be conveyed from the top of the organization. Also, a single employee who operates outside of the organizational value system can cost This article is based upon the findings of a study initiated by and supported by the Ethics Resource Center Fellows Program. 128 CAUFORNIA MANAGEMENT REVIEW VOL 42, NO. 4 SUMMER 2000 Moral Person and Moral Manager: H o w Executives Develop a Reputation for Ethical Leadership the organization dearly in legal fees and can have a tremendous, sometimes irreversible impact on the organization's image and culture. Moral Person + Moral Manager = A Reputation for Ethical Leadership These ideas about a dual pillar approach to ethical leadership are not brand new. As the opening quotation suggests, the emphasis on reputation goes back to Plato. Chester Barnard addressed the ethical dimension of executive leadership sixty years ago. Barnard spoke about executive responsibility in terms of conforming to a "complex code of morals"' (moral person) as well as creating moral codes for others (moral manager). If Plato and Barnard had this right, why bother revisiting the subject of ethical leadership now? We revisit the subject because, in our 40 structured interviews (20 with senior executives and 20 with corporate ethics officers), we found that many senior executives failed to recognize the importance of others' perceptions and of developing a reputation for ethical leadership. To them, being an ethical person and making good ethical decisions was enough. They spoke proudly about having principles, following the golden rule, taking into account the needs of society, and being fair and caring in their decisions. They assumed that if they were solid ethical beings, followers would automatically know that. They rejected the idea that successful ethical executives are often perceived as ethically neutral. Furthermore, they assumed that good leaders are by definition ethical leaders. One senior executive noted, "I don't think you can distinguish between ethical leadership and leadership. It's just a facet of leadership. The great leaders are ethical, and the lousy ones are not." However, a reputation for ethical leadership can not be taken for granted because most employees in large organizations do not interact with senior executives. They know them only from a distance. Any information they receive about executives gets filtered through multiple layers in the organization, with employees learning only about bare-bones decisions and outcomes, not the personal characteristics of the people behind them. In today's highly competitive' business environment, messages about how financial goals are achieved frequently get lost in the intense focus on the bottom line.