Instilling ethical leadership in your organization? Warren Buffet advises



How do you make sure that the management beginning from one level below you is making decisions that would parallel your own?

This is one question that gives entrepreneurs sleepless nights – with good reason. A stupid decision made by an employee reflects directly on you and the credibility of your business. So how do you ensure that every one of your employees is accurately/properly representing you through their behavior?

Warren Buffet says:

“We can afford to lose money, but we afford can’t to lose even a shred of reputation. I ask the managers to judge every action they take not just by legal standards, although that’s obviously the first test, but also by what I call the “Newspaper Test”. How would they feel about any given action if they knew it was to be written up the next day in their local paper to be read by their family, friends, neighbours. It would be written by a smart but not-so-friendly reporter. If it passes that test, it’s okay. If anything crosses that line, it’s not. If you have to ask if something crosses that line, chances are it does.

The lessons?

– Money isn’t all that matters. Reputation counts for a hell of a lot more, so make your employees understand that the end does not in any way justify the means.

– The Newspaper Test. This isn’t just good practice for business, but a way of life that applies to every situation we find ourselves in. If every sneaky/bordeline grey area decision we made was written up for the world to see, would we still do it? Probably not. Also, if you have to ask if it’s okay – if you sit there trying to justify it in your head – then it probably isn’t the kind of thing you want tied to your reputation.


It’s important to not only know these things, but to teach them to everyone who represents you, regardless of the capacity in which they do it. From your lawyer to the secretary answering your phone, you must make sure that the customer/client experience does not vary too much in order to build credibility and a name in whatever space you’re trying to establish yourself in.



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