When making decisions, transparency and potential consequences are powerful influencers. For directors and CEOs — as well as for their personal brands — this is a key question: What will decision makers in their organization do in critical situations when no one is watching? Protiviti’s Jim DeLoach shares advice on how company leaders can instill and reinforce ethical practices.
When the subject of ethical and responsible business behavior arises, Warren Buffett advises that managers evaluate every action they take — not just by legal standards but also by what he calls the “newspaper test.” When they have any doubt about whether a particular decision or action is right or wrong, they should imagine how they would feel if it were reported the following day in their newspaper, with the assumption that the write-up is authored by a smart but unfriendly reporter and is read by their family, friends and neighbors.
Buffett’s bottom line: If your decision or action passes this test, it’s OK; if it doesn’t, it’s not. This test isn’t just about transparency. It’s also about consequences, as illustrated by another well-known Buffett quote:
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
The test itself…
