+ Models ORGDYN-100753; No. of Pages 9 Please cite this article in press as: P. Hirsch, et al., Can a leader of moral character survive and do good in a corrupt organization?, Organ Dyn (2020), https://doi.org/10.1016/j.orgdyn.2020.100753 Can a leader of moral character survive and do good in a corrupt organization? Paul Hirsch, Stelios Zyglidopoulos, Panagiotis Alekos “ . . . a man who has fallen among wild beasts, unwilling to share their misdeeds and unable to hold out singly against the savagery of all, and that he would thus, before he could in any way benefit his friends or the state come to an untimely end without doing any good to himself or others — for all these reasons I say the philosopher remains quiet, minds his own affair, and, as it were, standing aside under shelter of a wall in a storm . . . ” (Republic 496d). According to Plato’s advice above, the only way an indi- vidual of good character can survive in a corrupt environ- ment with her character unscathed is to ‘run and hide.’ However, moral leaders are a scarce resource. Given the multiple corporate scandals that have taken place in the 21st century and before, we cannot afford to have them ‘run and hide’ in an effort to protect their character. Indeed, it is the moral leader’s strong character, drawing on habitual quali- ties of courage, integrity, justice and collaboration that will lead her to taking actions to bring about change for the better. The course of action for the moral leader of strong character facing corruption in her organization is to address it, even if she fails. To do so, our conclusion and advice will be to: Be extra clean; Be able to prove it; Get outside legal help; Identify your allies, opponents and enemies; Get support from the highest possible level of management; Build-up your communication and social skills; Be prepared to deal with a lot of stress; and Be prepared to exit. The impact leaders have on organizations can be illu- strated by comparing the well-known cases of Enron and Siemens. Simply put, Enron failed because through complex financial statements it pretended to be performing well, while in reality it had been hiding its losses for many years and became the largest bankruptcy in American history at that time. Its leaders not only led the company into bank- ruptcy through incompetence related to their main line of business, but also invented a complex system of financial reporting, using a number of off-balance-sheet special pur- pose entities to hide their losses in order to present a false impression of stellar performance. This misrepresentation of the real financial results made it impossible to save the company through a change of leaders, or any other changes after it became known. On the other hand, Siemens’ board members changed its leadership in time for it to recover. Starting in 2005, many prosecutors in Europe and the US investigated it for bribery violations. They found that paying bribes in order to secure contracts had been going on for some time in Siemens and indeed was considered a standard operating procedure. The company had been paying bribes to officials around the world for years and keeping separate books to hide this activity. The result of this scandal was that Siemens paid billions of dollars in fines, changed its top leadership, and invested heavily in an elaborate compliance system. As the scandal started to become public, Siemens fired its chairman and CEO and brought in a number of outsiders to help rebuild its reputation and compliance. From its pre-scandal team of about 30, Siemens eventually hired around 500 compliance professionals worldwide, and developed a comprehensive compliance system to prevent corruption from again becom- ing an issue in the corporation. Siemens was forced into changing its leadership but did so in time to save the corporation. Moral leaders, then, can make a difference, assuming of course that the organization became corrupt without their involvement. But they make a bigger difference when first faced with corruption, before it becomes a major scandal that puts the whole corporation in existential dan- ger. In short, the first time they come across a corrupt activity, they do not look the other way and pretend it is not happening. Neither can they fall victim to common rationalizations often used to make sense of corruption, Organizational Dynamics (2019) xxx, xxx—xxx Available online at www.sciencedirect.com ScienceDirect jo u rn al h om ep ag e: ww w.els evier.c o m/lo c ate/o rg d yn https://doi.org/10.1016/j.orgdyn.2020.100753 0090-2616/© 2020 Published by Elsevier Inc.