Restoring Integrity: How Leaders Can Turn Ethical Lapses Into Growth

We all make mistakes—leaders and team members alike. Sometimes, even with the best intentions, lapses in integrity happen. These moments don’t have to define us. In fact, they can serve as valuable opportunities to rebuild trust and foster growth. When leaders approach these situations with empathy, transparency, and a commitment to learning, integrity can not only be restored but also strengthened.

For many people, especially those who’ve worked in environments where mistakes were harshly punished, their first instinct might be to hide the error or bend the truth. This reaction often stems from fear, not a lack of ethics. As a leader, you have the chance to coach your team members back to a place of integrity by addressing these lapses with empathy, promoting open communication, and encouraging a mindset focused on growth.

Defining Integrity In Corporate Leadership

First, let’s all agree on what integrity involves. In the context of corporate leadership, integrity goes beyond just doing the right thing when someone’s watching. It's about consistency between words and actions, transparency in decision-making, and a commitment to ethical principles that foster trust. Leaders with integrity serve as role models, creating environments where honesty, accountability, and fairness thrive.

But without integrity, that translation falls apart. When leaders fail to uphold their ethical principles, even the most visionary goals can crumble. In fact, a study by EY’s Global Integrity Report found that 97% of employees believe integrity is critical in building trust within the organization. Yet, only 46% of employees feel that integrity is displayed consistently by their leadership.

Integrity in leadership is not just about avoiding wrongdoing but also about making hard decisions that align with the core values of the organization, even when it’s uncomfortable or inconvenient. It requires leaders to take ownership of their actions and model the standards they expect from their teams.

Forgivable Integrity Lapses (With A Warning)

Let’s clarify the difference between integrity lapses that, with coaching, can lead to growth and the kind of integrity lapses that require serious consequences. The following situations usually involve minor lapses that stem from misunderstandings, poor judgment, or a lack of awareness:

MISCOMMUNICATION OR OMISSION

• Forgetting to pass along non-critical information or deadlines.
• Unintentionally providing incomplete details during discussions.

POLICY MISSTEPS

• Overlooking non-essential or newly introduced policies.
• Using company resources for mild personal reasons, like occasionally printing personal documents.

UNINTENTIONAL ERROR WITH CORRECTABLE IMPACT

• Mistakes made while navigating a new role or process, such as missing a step in a report.
• Mishandling confidential information due to unclear guidelines on data protection.

CONFLICTS OF INTERESTS WITHOUT MALICIOUS INTENT

• Accepting small, well-meaning gifts without realizing they break company policy.

LAPSES IN JUDGEMENT UNDER PRESSURE

• Making a quick, poor decision under the pressure of tight deadlines, like promising something that can’t realistically be delivered.

While it's still important to address them, they’re more about growth opportunities than grounds for serious action. Below are the conditions for 'forgiveness':

1. The person acknowledges the mistake.
2. They show a willingness to make things right and learn from the experience.
3. There’s a clear commitment to avoid repeating the behavior.

Unforgivable Integrity Lapses (Leading To Serious Consequences)

The following actions involve intentional misconduct or behavior that seriously damages trust, the organization, or individuals:

Fraud or theft

• Deliberately falsifying financial records, time sheets, or expense reports.
• Stealing company property or intellectual assets.

DECEPTION OR MISREPRESENTATION

• Lying to supervisors, clients, or stakeholders about critical matters.
• Falsifying credentials or inflating job experience.

ABUSE OF POWER OR HARASSMENT

• Using one’s position to manipulate or exploit others.
• Engaging in or enabling harassment or discrimination in the workplace.

VIOLATIONS OF CONFIDENTIALITY

• Intentionally leaking proprietary or confidential information to unauthorized individuals.

REPEATED OR WILLFUL VIOLATIONS OF POLICIES

• Ignoring clear directives or safety protocols after repeated warnings.

CONFLICTS OF INTEREST WITH MALICIOUS INTENT

• Secretly doing business with competitors or accepting substantial kickbacks.

They are breaches of integrity that are hard to overlook and often lead to significant discipline or termination. Below are the conditions for 'unforgiveness':

1. There’s a clear intent to deceive, harm, or break trust.
2. The organization, clients, or team have suffered significant damage.
3. A pattern of behavior suggests a disregard for core values or previous warnings

Getting To The Heart Of Integrity Lapses

Integrity lapses don’t always happen out of bad intent. More often, they arise from insecurity, fear of judgment, or past experiences where mistakes were met with harsh consequences. In fact, according to Inc Magazine, 72% of employees admit to withholding information at work because they fear repercussions. This highlights how many integrity breaches are driven by self-preservation, not intentional wrongdoing.

Reflect: How do you currently handle integrity lapses in your team? Do you approach them with empathy, or do you default to judgment? How could you create a safer environment for open communication?

The Pressure To Avoid Failure

I once coached a manager whose direct report, R, fabricated a success story during a team meeting to cover up a mistake that could have been easily addressed had she been open about it. R’s department had missed a key deadline, and instead of explaining the delay, she claimed the project was complete and already delivered. The truth, of course, emerged later, and R was embarrassed and anxious about the consequences.

When we debriefed the situation, it became clear that R’s automatic response—fabricating a story—stemmed from an environment in her early career, where mistakes were harshly punished. This behavior wasn’t about lacking ethics; it was about self-preservation.

Understanding the root cause of integrity lapses allows leaders to respond with empathy rather than judgment. It opens the door to coaching and helps team members recognize that mistakes are part of growth and should be addressed openly rather than avoided.

Why Integrity Breaks Down

There are many reasons someone might act out of integrity, often rooted in personal, organizational, or situational factors. Understanding these can help leaders guide their teams with compassion and clarity. Let’s explore a few common reasons why integrity might be compromised:

Fear Of Consequences

Fear is one of the most common drivers of integrity lapses. When people worry that admitting a mistake will result in punishment—like losing their job or damaging their reputation—they may resort to covering it up. Leaders can ease this fear by promoting a culture where mistakes are viewed as learning opportunities, not reasons for harsh consequences.

Pressure To Meet Unrealistic Expectations

High-pressure environments can push employees to cut corners to meet deadlines or targets. Without proper support, they may feel they have no choice but to compromise their integrity. As leaders, setting achievable goals and offering the right resources helps alleviate this pressure.

Unclear Ethical Guidelines

When employees aren’t sure what’s expected of them, they may unintentionally act out of alignment with company values. Clear, consistent ethical guidelines and open conversations about company values help keep everyone on the same page.

Past Experiences With Punishment

Some individuals have experienced environments where even small mistakes led to severe consequences. This history can lead to a mindset of hiding errors. Leaders can counter this by fostering a culture of trust where accountability doesn’t mean punishment, but growth.

Desire For Personal Gain

While less common, some folks might act out of integrity in order to pursue personal benefits such as financial gain, promotions, or recognition. When this happens it’s like to be in an environment that is highly competitive where winning at any cost is encouraged. Leaders can promote a culture of collaboration by rewarding team efforts and encouraging a supportive work environment.

Organizational Culture That Tolerates Unethical Behavior

In some workplaces, cutting ethical corners has become normalized. Employees may feel pressured to follow suit or risk being seen as not "playing along." Leaders must actively promote integrity by aligning actions with values and celebrating ethical choices.

Conflict Of Values

Sometimes an individual’s personal values may conflict with the action they’re expected to take in their role. If they feel pressured to act in ways that go against their sense of right and wrong they might end up compromising their integrity in order to fit in or avoid backlash. On the other hand, some individuals may feel disconnected from the organization’s core values or not fully aligned with its mission. When people don’t feel invested in the company’s principles or don’t believe their actions have a broader impact they might act out of integrity. Leaders should make the company values clear, demonstrate those values by their actions, and draw connections between individual work and organizational goals.

Reflect: What organizational pressures or cultural factors might be contributing to integrity lapses in your team? How can you proactively address these factors to create a more supportive environment?

What To Do If You're Unsure About Your Integrity...

Pause And Reflect

Take a moment to reflect on your core values. Integrity involves being true to what you believe is right, so take the time to identify whether your decisions reflect those beliefs. 

Ask Yourself: Am I making this decision out of fear or pressure, or because it’s the right thing to do? Do I feel uneasy about this action? If so, why? Are these choices driven by the desire for quick results, pleasing others, or avoiding conflict?

Seek Feedback From Trusted Individuals

It’s often hard to see ourselves clearly in challenging situations. Reach out to colleagues, mentors, or friends that you trust for their perspective on your decisions and behaviors. Sometimes, an outside view can provide valuable clarity.

Conduct A Values Audit

Review key decisions you’ve made recently and assess whether they align with your core values. If you find areas where you fell short, acknowledge it and consider what you can do differently moving forward.

Ask Yourself: Did I act with transparency and honesty? Were my actions in the best interest of everyone involved, or was I prioritizing self-interest?

Consider The Impact Of Your Actions

Reflect on the effect your decisions have on others. Integrity is about more than intent—it’s about outcomes. If your actions created tension or distrust, it’s worth considering how to adjust moving forward.

Ask Yourself: Did anyone feel misled, undervalued, or hurt as a result of your action? Are your actions promoting trust, or are they creating tension within your team?

Course Correct With Accountability

If you realize you’ve compromised your integrity, don’t be afraid to correct course. Own your mistakes, apologize if necessary, and commit to making different choices in the future. Taking responsibility demonstrates integrity and strengthens trust within your team.

By approaching integrity lapses with empathy, clarity, and accountability, leaders can transform mistakes into opportunities for growth. Leadership isn’t about perfection—it’s about guiding ourselves and our teams toward consistent integrity, even when it’s hard.

Inquire Gently Into Motivation

When addressing a lapse in integrity, we recommend approaching the situation with curiosity and empathy. Rather than assigning blame, invite the individual to reflect on their actions. Asking open-ended questions creates a safe space for them to explain their decisions and reflect on their impact. For example, you might say, “I noticed this didn’t go as planned. Can you walk me through what motivated your approach?” This type of inquiry encourages self-reflection and builds trust. 

In R’s case, after asking these questions and listening to her perspective, her manager was able to guide her toward a more open dialogue about mistakes and deadlines. Over time, this process encouraged R to share challenges early rather than hiding them.

Reinforce That Failure Is Part Of Learning

Integrity lapses often stem from a fear of failure. It’s vital to normalize mistakes as part of the growth process. Leaders who encourage transparency and accountability while reassuring their teams that no one is expected to be perfect foster an environment where ethical behavior thrives. By reinforcing that failure is a stepping stone to success, you reduce the likelihood of integrity breaches.

Research by psychologist Carol Dweck on the growth mindset shows that individuals who view challenges as learning opportunities are more likely to exhibit resilience and transparency. Leaders who make it clear that honesty in addressing mistakes is valued above all else encourage their teams to own up to errors, ultimately strengthening the integrity of the entire group.

Back It Up With Your Behavior

Integrity-driven leadership requires that your words and actions align. Encouraging transparency but reacting punitively to mistakes will undermine efforts to build trust and integrity. Instead, demonstrate patience and a problem-solving mindset when addressing errors. When you make a mistake, own it openly, discuss it with your team, and explain how you’ll address it moving forward. According to a Harvard Business Review study, leaders who model transparency are four times more likely to foster trust within their teams. When your team witnesses you owning mistakes, they’re far more likely to follow suit.

Offer A "Get Out Of Jail Free Card"

Consider implementing a “get out of jail free card” system after noticing small lapses in transparency. 

Create A Culture Of Psychological Safety

A culture of psychological safety—where employees feel comfortable admitting mistakes—is key to fostering integrity. Harvard Business School research shows that teams with high levels of psychological safety are 12 times more likely to innovate and solve complex problems.

As a leader, model vulnerability by admitting your own mistakes and explaining how you’ve learned from them. Provide opportunities for feedback and encourage your team to voice concerns when something doesn’t align with the organization’s values. Focusing on learning and growth, rather than punishment, creates a safer environment for ethical behavior to flourish.

Foster Ongoing Learning About Ethics

One of the best ways to prevent integrity lapses is by making ethics a regular part of your leadership toolkit. Creating a space where ethical decision-making is openly discussed sets a clear standard: integrity is non-negotiable.

Consider hosting quarterly or biannual workshops focused on real-world ethical scenarios and conflict resolution. These sessions give teams the chance to practice navigating tough situations where their values may be tested. You can also bring up ethical topics in team meetings—normalizing these conversations shows that integrity is woven into the fabric of your organization. Ask your team how they’d approach specific ethical dilemmas, inviting them into the conversation as active participants.

Address Systemic Issues Behind Integrity Lapses

Not every integrity lapse is an isolated event. Often, it’s a sign of deeper, systemic challenges within the organization. High pressure, lack of clear guidance, and unrealistic expectations can push employees into making decisions they normally wouldn’t.

Start with an organizational audit, using anonymous surveys to pinpoint areas where systemic issues might be creating ethical challenges. Are your team members feeling overwhelmed? Is decision-making too opaque? If certain processes or expectations are making it difficult for employees to act with integrity, it’s time to rethink them. For instance, adjusting timelines, improving communication, or adding transparency to decision-making processes can make a big difference.

Repairing Integrity Lapses With Clients And Customers

Integrity issues don’t just happen internally—they can also affect your relationships with clients and customers. If your company falls short on a promise or misrepresents something, the key is to act quickly to repair the trust.

Own the mistake right away. Sincerely apologize and explain what went wrong. More importantly, offer a clear solution, whether that’s a refund, product replacement, or another form of compensation. If the lapse was due to a process issue, let your client know what changes are being made to prevent it from happening again. Being transparent and proactive goes a long way in rebuilding trust.

Track Integrity With Data And Metrics

You can’t manage what you don’t measure, and integrity is no exception. Using data to track ethical behavior, transparency, and accountability helps leaders stay on top of potential issues before they escalate.

Consider using anonymous surveys to gauge how your employees feel about the company’s commitment to integrity. Do they feel pressured to compromise their values? Do they believe leadership is setting the right example? You can also monitor the number of ethical concerns raised by employees or clients to track whether issues are increasing or decreasing over time.

Regular audits of internal transparency—looking at communication, decision-making, and adherence to ethical guidelines—can also provide valuable insights into where improvements can be made.

Reflect: How comfortable do your team members feel coming to you with their mistakes or concerns? How can you create more psychological safety to foster transparency and learning?

Make A Public Commitment To Integrity

Finally, making a public commitment to ethical leadership reinforces that integrity is a core value of your organization. Publish a clear code of ethics, ensure it’s visible to employees, clients, and stakeholders, and hold everyone, including leadership, accountable to these standards.

Leaders who regularly communicate their commitment to integrity—whether in company updates, newsletters, or meetings—help embed this value into the organizational culture. When employees see that integrity isn’t just something leaders talk about, but something they live by, it builds trust and fosters a more cohesive, values-driven workplace.

Reflect: Is integrity visibly prioritized within your organization? How can you ensure that your commitment to ethical leadership is clear to both internal teams and external stakeholders?

In fostering an environment where people feel safe to admit mistakes and make ethical decisions, leaders can help ensure that integrity remains a cornerstone of their team’s culture.  Understanding the root causes of integrity lapses is critical for leaders who want to foster a culture of integrity in their organizations. By identifying why individuals might act out of alignment with ethical standards, leaders can take proactive steps to address these issues through coaching, clear communication, and reinforcing a culture of accountability and transparency.

I often work with companies during critical transitions such as preparing for an investment by private equity (PE), integrating into a larger firm, or acquiring a smaller firm. In these scenarios, integrity becomes a vital part of the due diligence and relationship-building process. One key framework I use is the Five C Model by Dr. Mary Beth Page, which helps ensure alignment between companies in terms of culture, character, and communication.

Integrity in interactions during the pre-acquisition process—especially in ensuring a common code of conduct—is paramount. This includes transparency with employees, vendors, and partners, and sharing potential challenges openly. One of the most critical components of success is ensuring that both companies share similar values around integrity and transparency. By engaging like-minded CEOs and COOs in conversations around these values, companies can find a much better cultural fit, which leads to smoother integrations and long-term success.

This alignment isn’t just about financials or product fit—it’s about integrity in how business is conducted and how people are treated. When companies come together with a shared commitment to integrity, it significantly reduces the risks of cultural clashes and helps maintain trust throughout the transition process.

At the end of the day, integrity isn’t about never making mistakes, it’s about what we choose to do after them. As leaders, we set the tone. When we model honesty, own our missteps, and create space for others to do the same, integrity stops being an abstract value and becomes part of the daily fabric of the team. That’s where real trust is built, not in perfection, but in the willingness to face the hard moments with courage and compassion. If we can do that consistently, we won’t just repair integrity lapses, we’ll cultivate workplaces where integrity thrives, even when the pressure is high.