What drives unethical behaviour in Board Members and Executives

on May 9, 2018

Sometimes I get puzzled when I see organisations spending a lot of money training Non- Executive Directors and Executives Directors specifically targeting to reduce unethical conduct. I guess the belief in those championing such training is that these senior executives are involved in unethical behaviour because they do not know what is right and wrong. Most of the corporate governance scandals you see every day are committed by people who are very educated and knowledgeable. While training will help with procedural issues it does not stop thieves in your Board from stealing. It is their nature. They will continue stealing despite all the money you are spending on training.

So where is the problem and how can it be addressed? The problem is in the personality of the individuals that are selected to lead organisations and Boards. If you get the wrong personality into your organisation do not expect them to change. Personality is a permanent disposition that is reflected in how the individual behaves across situations. Personality is an individual’s stable and consistent thoughts and behaviour across different situations (Walumbwa & Schaubroeck, 2009). Research has shown that “People with certain personality traits are more likely to behave ethically or unethically” (Greenbaum, Hill, Mawritz, & Quade, 2014). With the above finding above, let us look at the different personality types and how they relate to ethical behaviour.

Let us look at the big five personality traits and how they influence ethical behaviour. Conscientiousness is the first one; it is defined as “a broad dimension of personality that encompasses a person’s predisposition to control their behaviour in socially acceptable ways (Roberts, Jackson, Fayard, Edmonds, & Meints, 2009). It reflects how organised someone is. People that are high on conscientious are always reliable and get the job done according to agreed plans. The people low on conscientiousness are always late and rarely get things done according to agreed plans. According to research, people high on conscientiousness tend to be “self-disciplined, think before they act, are goal-directed and follow socially prescribed rules and norms” (Roberts et al, 2009). Bratton & Strittmatter (
2013) discovered that Conscientiousness correlates negatively with dishonesty and cheating. From the above research, you can already see how important this personality dimension is at any role within the organisation.

The second personality dimension is Agreeableness and it corresponds to how easy going an individual is. People high on agreeableness get along with everyone. Those low on agreeableness tend to argue a lot even for no apparent reason. In contrast, people low on agreeableness “show lack of concern for others, (are) tense, irritable, and rebellious, thus they tend to display unethical behaviour” (Walumbwa & Schaubroeck, 2009).

The third of the big five personality traits is Extroversion. This trait reflects in highly social people who are outgoing and very comfortable interacting with people – even strangers. Currently, there is no conclusive evidence linking extraversion to unethical behaviour.

The fourth personality trait is Openness to experience. People high on this trait are open-minded. They are likely to welcome new ideas and new ways of doing things. An individual low on this trait is adverse to new ideas and new ways of doing ways. They stick to the traditional ways of doing things: the ways familiar to themselves even if such ways are no longer adding value. So far no positive relationship has been found between openness to experience and unethical behaviour.

The fifth personality trait is called Neuroticism. This trait reflects how emotionally volatile someone is. Individuals who are highly neurotic are prone toward frequent changes in mood. They experience negative affect (bad feelings) most of the time. In the majority of the studies neuroticism has been found to be the significant predictor of unethical behaviour (e.g., Camps et al., 2016; Walumbwa & Schaubroeck, 2009). Individuals low on neuroticism “value morality, loyalty, and obedience to norms. They have a sense of direction and are altruistic and emphatic” (Karim et al., 2009). Such people are more rational in their actions and less likely to resort to unethical behaviour in pursuit of their goals.

Given the above the above findings, it is very clear that in order to deal with unethical behaviour in organisations the “powers that be” need to make sure that anyone joining their organisation in whatever capacity has the right personality in line with company values. It is a waste of money to try and train people who have defective personalities to behave well.

Since most companies ignore personality when hiring, they incur huge costs when such people behave unethically. Look around and you will notice that those who are unethical continue to do so regardless of the environment or organisation they work for.

Memory Nguwi. Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. He is the president of the Zimbabwe Psychology Association. He hosts a radio program HR Perspective every Thursday at 1900hrs on Capitalk 100.4FM. https://www.linkedin.com/in/memorynguwi/ Phone 481946-48/481950/2900276/2900966 or email: mnguwi@ipcconsultants.com or visit our website at www.ipcconsultants.com