It’s easy to point to a character flaw when an employee bribes a government official in a foreign country, fudges the numbers in the company financials or demonstrates a lack of ethics in the workplace. After all, bad people do bad things. But taking such a simple view of employee misconduct and corruption diminishes a company’s responsibility for the conduct of its employees. And the law certainly doesn’t diminish that responsibility, slapping organizations and their leaders with huge fines for breaches committed by their employees.

What the law recognizes, and many organizations don’t, is that corruption comes from the top. “If you don’t have ethical leadership, an ethical tone at the top, a company’s going to be corrupt,” says Rick Crosser Professor and Chair, Department of Accounting at Metropolitan State College of Denver. The key to ethical behavior in an organization is in the leadership, he says. Leaders must create a team culture that puts ethics above profit.

Ethical Leaders and Values-Based Goals

So choosing top level executives who have strong ethical values should be the highest priority for every Board of Directors. When assessing candidates for a leadership role, ethics is a tough attribute to pinpoint, but Crosser emphasizes that it’s an attribute that needs to already be in place. “I don’t think it’s something you can change at that point,” he says.

But how does a Board of Directors measure the ethical character of a leader? Crosser points to the work done by Ethisphere as an example of how such traits can be assessed. Through its annual list of the World’s Most Ethical Companies, Ethisphere is creating a mechanism for measurement, he says. Boards can look to other ethical companies to find examples of leaders who promote ethics in the workplace.

Ethical leaders set goals that are in line with the company’s ethical values. Misguided goals, such as an unwavering focus on the bottom line, can lead to unethical behavior throughout an organization.

An Ethics Story on Everest

Crosser uses the story of mountaineer Dan Mazur’s 2006 rescue of Lincoln Hall from Mount Everest as a classic example of how ethical leadership creates a team with a focus on the right goals. Mazur was leading a group to the summit of Everest when they encountered Lincoln Hall, an Australian climber who had been abandoned by another expedition team the previous day after collapsing and failing to respond to treatment on the descent from the summit. Mazur’s team abandoned their attempt on the summit, despite perfect conditions for an ascent, to save Hall's life. “They had already created their team culture,” says Crosser. “They knew where their values were. For them life’s value was the number one value, not reaching the summit.”

When an ethical tone is set from the top, it affects an entire team, no matter the characteristics of individuals in the team. “It’s proven we can teach people to be ethical,” says Crosser. “In a corporate sense, that’s the training and the constant behavior. Everybody is a role model to everyone else. If you have an outlier, outliers are taken care of one way or another,” he says.

With ethical leadership and constant training and reinforcement, a company’s values become ingrained in the culture, leading employees to behave ethically and influence one another to do the same.