Ethical Leadership and Institutional Performance (Example 1: The Clan and Example 2: Organizational Performance)

 Leadership and sound judgment play a critical role in the development and performance of organizations and institutions. Every organization operates with defined goals and directives, often formalized in a mission statement. That mission should serve as the guiding framework for decision-making at every level. The quality of leadership—and its genuine commitment to that mission—has a direct impact on employee performance and organizational outcomes.

Joe recommends
a few good books
for those who want to 
develop leadership traits
and build strong organizations
 and institutions.

It is worth considering whether poor employee performance often reflects a lack of leadership commitment to the stated mission. This applies equally to private companies and public institutions, including those responsible for justice. Where there is a deep, shared commitment to core values, performance tends to be higher. Where that commitment is weak or inconsistent, performance usually suffers.

Consider two examples.

Example One:
An organization needs to compete in the global market but consistently misses its growth projections due to poor leadership and nepotism among elite circles. Favoritism and unethical behavior send mixed signals, leaving employees uncertain about expectations and priorities. In such an environment, it becomes difficult for individuals to act in ways that advance the organization’s mission. Establishing clear expectations, reinforcing ethical standards, and rewarding merit-based performance aligned with the mission would likely improve outcomes.

Example Two:
In a more serious philosophical thought experiment, good officials are forced to work alongside corrupt ones, creating a fragmented and dysfunctional environment. A change in leadership begins to shift attitudes, gradually restoring trust and improving performance for everyone. In this example, a “clan court” held biased views, arbitrarily dismissed human and civil rights, and engaged in backroom agreements that intentionally harmed victims, witnesses and whistleblowers while enriching in-group members. These implicit values shaped an environment in which corruption, bias, and extremism were normalized as long as the targets were dehumanized enough. They were unable to muster the moral conscious to correct wrongdoing.

Representing decorative values.
They sparkle in front of others
but just don't drop one because
they are made of glass.

This is why the phrase “walk the talk” matters. A mission statement must be more than lip service. While the relationship between leadership values and performance is not always immediately visible, it can be studied, measured, and understood. Unwritten norms often override written policies, and sustained leadership commitment is essential for long-term success. Without it, some individuals will inevitably come to believe they are above the mission and above ethical accountability (Some actually may be).

Such individuals will always exist, which is why leadership selection must prioritize ethical integrity and genuine commitment to the organization’s mission. Generally you also also need some levels of checks-and-balances. In both examples, improved performance followed changes in leadership and a realignment of processes around core values.

Mission statements should never be decorative. If they exist merely to look good, like ornaments on a tree, they fail their purpose. Organizations must either appoint leaders who are truly committed to those missions or revise the missions themselves if they no longer reflect meaningful or relevant goals.

The Paradox of Trust: How Leadership, Commitment, and Inertia Shape Sustainability Behavior in the Workplace

Feel free to discard or find your own examples.