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The Thing About Integrity

HBR’s editor, Amy Bernstein, with Adi Ignatius
L AT E LY, T H E N E WS has been filled with stories of embezzlement,
bribery, and other kinds of corporate corruption. In a 2018 survey,
PwC found that nearly half the 7,228 participating organizations had
experienced economic crimes or fraud in the previous year—up from
30% in 2009. So it’s no exaggeration to say that white-collar crime is a
growing problem. And it’s one that has considerable costs: It destroys
shareholder value, drains management resources, and tarnishes
brands, sometimes irredeemably.
The same PwC survey also found that more than half the white-
collar criminals were “internal actors”—a phenomenon that Paul
Healy and George Serafeim of Harvard Business School explore in
“How to Scandal-Proof Your Company” (page 42). They argue
that the cause isn’t weak regulations or compliance systems. At firms
hit by scandals, they say, “a culture of making the numbers at all costs
trumped any concerns about how the targets were being met.”
The root of all this is leadership: “Senior executives at most
companies that suffered highly publicized transgressions didn’t
see these incidents as their personal responsibility to address or as
evidence that something was fundamentally amiss in their organi-
zations,” say Serafeim and Healy. While these leaders accepted the
importance of compliance, they placed greater emphasis on beating
competitors and wowing investors—a message that can foster a
culture of wrongdoing.
It shouldn’t come as a surprise, then, that the opposite is also
true: The leaders who prioritize integrity themselves tend to run
organizations that discourage winning at any cost and, in the process,
cultivate higher employee engagement and more-profitable growth.

ADI IGNATIUS
Editor in chief
Andrew Nguyen

12 Harvard Business Review

July–August 2019
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