The role of senior leadership in ethical behavior of financial institutions: A case study

by Mugalu, Geoffrey K., Ph.D., CAPELLA UNIVERSITY, 2010, 251 pages; 3397358


Senior leaders play an important role in the ethical behavior of organizations in particular financial institutions. The objective of this qualitative interview-based study was to explore the role of senior leadership in the ethical behavior of financial institutions. Prior quantitative studies focused on the connection between business leadership and ethical behavior of institutions from a leader perspective. Yet the perspective of followers was not considered in understanding how senior leadership's role—from both senior leaders' and their followers' perspectives—influences the ethical path of their institutions. By incorporating the perspective of senior leaders' direct reports, this case study explored the lived experiences of 8 senior leaders and 15 senior leaders’ direct reports of a financial institution in the northeastern region of the United States to determine senior leaders' experiences and their direct reports' perception and beliefs concerning (a) formulating and communicating ethical guidelines and policies, (b) providing ethics training and education, (c) role modeling ethical behavior, and (d) holding people accountable for ethical behavior. A case study approach of the qualitative research method was adopted for this study. Through face-to-face interviews, the study identified the essential aspects of how senior leaders in a midsized financial institution in the northeast United States formulated and communicated ethical guidelines and policies within their institution, role modeled ethical behavior, provided ethics training and education to their terms, and how they held people accountable for ethical behavior. The findings of this study revealed (a) formulating and communicating ethical guidelines and policies starts from top to bottom of the institution, (b) periodical mandatory training being an effective method of providing ethics training and education, (c) exemplary leadership being an effective means of role modeling ethical behavior, and (d) termination sends a clear signal to both current and future ethics violators. The results of this study illustrate the leadership qualities and values senior leaders of particularly financial institutions need to lead for ethical behavior of their institutions, and how their followers’ perception is equally important in influencing ethical behavior in the institution.

AdviserMarc Muchnick
Source TypeDissertation
SubjectsEthics; Management
Publication Number3397358

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