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January 22, 2015 By Richard Bowen

Ethical Leadership- Culture is the Culprit!

Ethical Leadership- Culture is the Culprit!

People act in their own best interests; not necessarily because they believe they are doing the right thing or because they may be punished or rewarded for doing so. And if a company wants to promote and assure ethical standards are followed then transparency, trust and developing an ethical culture based on guiding principles is critical. My client, Penn Mutual, is a shining example of what to do right.

We can talk ethics all day long but, if leadership does not follow the stated company principles, trust does not exist.

[tweetthis twitter_handles=”@RichardMBowen”]If leadership does not follow the stated company principles, trust does not exist.[/tweetthis]

So it is no surprise that four years after receiving more bailout money than any of the other too-big-to-fail banks Citigroup admitted to breaking FHA rules, certifying thousands of unqualified mortgages for FHA insurance and continuing to take risks with taxpayer money,  as told in the Kellogg School of Management’s white paper. Some of this story is chronicled in my earlier post.

And my experience at Citigroup has put me on a quest to discover what ethical leadership is and is not.

Adam Waytz, an Assistant professor of Management and Organizations at the Kellogg School, the author of a recent award winning business case on Sherry Hunt’s (and my) whistleblowing story has also investigated some of the tough questions about ethical leadership. He asks how could Citi have prevented this chain of events from happening? One red flag goes up for me immediately, when Sherry Hunt and I were yelling loud and clear, no one listened.  No-one cared to. Yet the CitiMortgage CEO claims not knowing?! He said, “Did you ask her (in reference to FHA investigation) if she (Sherry) spoke to me?”

Are there steps that can be taken to assure fraud is a moot point? Can whistleblowing be stopped before it is needed? Yes, if an organization truly believes values matter, then transparency is key.  Ethical leadership is assuring open discussion, no grey areas, no hiding behind numbers and making sales at all costs. Leadership must be clear in communicating with employees at all levels, especially at the C- level, that THIS is how we operate- honestly, transparently, not just rules and regulations but a full blown adherence to corporate social responsibility. Not just a written code on a shelf, but one that is followed, talked about, expected and rewarded. A respect for human dignity, human rights, sustainability and justice.

[tweetthis twitter_handles=”@RichardMBowen”]Can whistleblowing be stopped before it is needed?[/tweetthis]

Creating a culture that works welcomes open honest dissent, and discussion. Employees who see wrongdoing are not put in a corner and all their responsibilities and direct reports taken away as happened with both Sherry and me — but listened to and the problem explored. Everyone is engaged in ethical issues. Each employee knows they are accountable for fulfilling the Mission and following the guiding principles.

Interesting the companies who follow guiding principles and welcome open discussion, show open, honest corporate responsibility are also those who get and keep the best employees and, surprise, make a profit.  If Citigroup had promoted a commitment to ethical leadership, well that’s another story isn’t it?

As Whole Foods says, “Values Matter”.

Whistleblowing for Dummies
Is Citi the next AIG… ?

Tagged With: ethical leadership, Ethics, Leadership, Richard Bowen

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Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.

Related Posts

  • Department of Justice – Encouraging Whistle Blowing or Blowing Smoke?Department of Justice – Encouraging Whistle Blowing or Blowing Smoke?
  • Penn Mutual’s Guiding Principles: a First Step Toward  Fraud PreventionPenn Mutual’s Guiding Principles: a First Step Toward Fraud Prevention
  • How to Stamp Out Fraud!How to Stamp Out Fraud!
  • On my honor… the Compliance or Ethics DebateOn my honor… the Compliance or Ethics Debate

What People Are Saying About Richard M. Bowen

William D. Cohan"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst."

~ William D. Cohan, NY Times Best Selling Author
2017-06-30T10:08:59+00:00
"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst." ~ William D. Cohan, NY Times Best Selling Author
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Eileen McDonnell"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger."

~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
2015-02-13T19:51:19+00:00
"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger." ~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
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"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership." ~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
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Dennis McCuistion"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years."

~ Dennis McCuistion, Host of the McCuistion TV program
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"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years." ~ Dennis McCuistion, Host of the McCuistion TV program
https://www.richardmbowen.com/testimonials/533/

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~ Betty Garrett, Garrett Speakers International
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"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!" ~ Betty Garrett, Garrett Speakers International
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fred-timmons"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences."

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2014-12-28T19:47:22+00:00
"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences." ~ Fred Timmons, Chairman of The Texas Society of CPA's
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Presentation Topics

Playing for High Stakes: The Principles and Practice of Ethical Leadership

Dark Citi: The Story of a Whistleblower

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Now an ethical leadership speaker, Richard Bowen was Citigroup's Business Chief Underwriter during the housing bubble.

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