Common Mistakes in Decision-Making and Leadership
So you think you’re ethical? Most of us think we do a pretty good job of doing the ‘right’ thing at work. But we can get caught out, especially if we do not have an ethical decision-making process in place.
ANNOUNCEMENT
Ethical leadership, and being able to stand by your decisions through an ethical framework, is a looming important trend to address.
It's one of the trends we will dive into more deeply at the Leadership Conclave coming up in Canberra, Nov 8th. Experience the joy of strategic gathering and build the strategic capability of your team. Get on the front foot for 2025, now, before the silly season takes hold.
When it comes to making ethical choices as a leader, here are some common traps you need to be mindful of:
Trap 1. “I know my values. I know what’s right.”
That’s all well and good until your values come into conflict with each other. We all value freedom. And security. How about Employee Surveillance vs. Privacy Rights? You need to make sure company data is secure, and employees need to feel like they aren’t in some Big Brother horror show.
Trap 2. “We need results—now.”
Chasing short-term wins can blind you to long-term consequences. Sure, cutting corners might boost profits this quarter, but at what cost? Sacrificing ethics today for quick gains can erode trust, damage your reputation, and leave your company vulnerable down the road. It's tempting to focus on immediate results, but sustainable success comes from balancing the short term with the long game—without compromising your values.
Trap 3. “As long as it’s legal, we’re in the clear.”
Just because something is legal doesn’t mean it’s ethical. The law sets the minimum standard, but ethics demand more. Cutting close to the legal line might keep you out of court, but it can still damage your reputation, alienate customers, and erode trust. Ethical leaders ask, “What’s right?”—not just, “Is this legal?” Aim higher than the bare minimum.
Trap 4. “I know what’s best for the company, I don’t need input.”
No one has a monopoly on perspective. Acting alone, without listening to your team or considering other viewpoints, can lead to blind spots. Maybe you’re missing a key stakeholder’s concern or overlooking the ethical implications. Leaders who seek diverse perspectives are better equipped to navigate ethical dilemmas and avoid making decisions that come back to bite them. Perspective is power!
Example: AMP and the Royal Commission
During the Australian Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry, AMP was found to have misled the Australian Securities and Investments Commission (ASIC) and charged customers fees for services that were never provided. Senior leadership at AMP, one of Australia’s largest financial services companies, appeared to act without input or consideration from key stakeholders such as customers and regulators.
The failure to listen to external feedback and internal warnings contributed to a massive reputational hit. AMP lost the trust of its customers and shareholders, with senior executives forced to step down, and the company had to implement substantial changes in governance and culture.
Trap 5. “I treat every situation differently.”
Being flexible is one thing, but inconsistency in applying ethical standards is another. Have you got different rules for your favourite suppliers? Maybe they don’t need to provide a written quote. Or show receipts. Just send an invoice…
Flexing process can catch us out when others ask for transparency and find consistency missing.
Trap 6. “The team doesn’t need to know all the details.”
Keeping your decision-making process a secret can backfire. Even if you’re acting ethically, a lack of transparency breeds suspicion and doubt. Your team needs to understand the ‘why’ behind your choices, especially when they’re tough. Communicating openly about the reasoning behind decisions strengthens trust and ensures everyone is on the same ethical page.
Trap 7. “The numbers speak for themselves.”
Focusing solely on the results, without considering how those results were achieved, is a slippery slope. Maybe you hit your targets—but at what ethical cost? Pressuring your team for results without guiding them on how to achieve them can encourage cutting corners or unethical shortcuts. Ethical leadership means ensuring the path to success is just as principled as the destination.
Example: Commonwealth Bank and Money Laundering Scandal
In 2017, the Commonwealth Bank of Australia (CBA) was accused of breaching anti-money laundering and counter-terrorism financing laws. The bank’s automated systems failed to report over 53,000 suspicious transactions through its “Intelligent Deposit Machines.”
CBA's leadership was focused on growing its business and rolling out innovative technology to increase customer convenience, but the bank neglected to ensure these systems were adequately monitored for compliance with legal and ethical standards. The pressure to meet business targets and enhance profits overshadowed proper regulatory oversight, leading to hefty fines and damage to its reputation.
Where might your numbers be leading the decision-making process?
Trap 8. “They’re a top performer—I can overlook it this time.”
Classic. We don’t want to rock the super star’s boat for fear of losing their contribution. Failing to hold them accountable for unethical behaviour sends a clear message to the rest of the organisation: the rules don’t apply equally. This can create a toxic culture where bad behaviour is rewarded. Ethics must be enforced consistently, no matter how valuable someone seems to the business.
Trap 9. “It’s just a small decision; it doesn’t need much thought.”
Ethical dilemmas are rarely black-and-white, and even small decisions can have big ripple effects. Rushing through without considering all sides or taking the time to weigh the consequences can lead to unintended harm. Ethical leadership means being mindful, even in the grey areas, and taking the time to think through the impacts of every decision.
Trap 10. “I’ve got this under control; I don’t need to involve anyone else.”
Conflicts of interest and personal biases can creep into decisions, even when you have the best intentions. Relying solely on your judgment can lead to unintentional ethical missteps. Seek advice from trusted colleagues, build a system of checks and balances, and remain open to questioning your own motives. It’s not about control—it’s about integrity.
Live with grace, lead in service.
Zoë
P.S. Want more insights on the Future of Leadership?
Zoë Routh is a leadership futurist, podcaster, and multiple award-winning author. She works with leaders and teams to explore what's coming and what it means for leadership of the future.
Zoë is an outdoor adventurist and enjoys telemark skiing, has run 6 marathons, is a one-time belly-dancer, has survived cancer, and loves hiking in the high country. She is married to a gorgeous Aussie and is a self-confessed dark chocolate addict.