The Cost of Cutting Corners: Why Ethical Leadership in HR Matters More Than Ever

Every time I read another headline about fraud, corruption, or a leader caught in a scandal, my heart sinks. It’s not just disappointing, it’s infuriating and deeply sad. From small businesses to massive corporations, and yes, even public institutions, we’re seeing a disturbing pattern: ethics are being treated as optional, and shortcuts are being taken with no regard for the long-term damage. As HR professionals, we can’t ignore this. We must respond, and we must lead.

Recently, Kohl’s CEO Ashley Buchanan was terminated after an internal investigation revealed a serious conflict of interest. He allegedly directed the company to work with a vendor tied to someone he had a personal relationship with, without disclosing that relationship. The deal offered unusually favorable terms to that vendor. And while Buchanan is just one example, this situation mirrors what we’re seeing all across the country: leaders choosing personal gain over organizational integrity.

The truth is, this type of unethical behavior is not rare. It’s everywhere. Conflicts of interest, backdoor deals, fraudulent reporting, falsified DEI claims, misuse of funds, it’s happening in places many employees don’t even realize. And every time a company chooses to look the other way or downplay it, the message is clear: profits over principles. When that happens, trust dies, employees disengage, stakeholders lose confidence, and the public becomes cynical.

This is why HR matters now more than ever. We are not just policy managers, we are the ethical backbone of our organizations. We must take an active role in identifying red flags, challenging unethical leadership, and preventing conflicts of interest before they explode into reputational disasters. It starts with us. That means implementing and enforcing robust conflict-of-interest policies, holding leaders accountable, and insisting on transparency in every decision we touch.

But more than that, we must lead by example. Our actions set the tone, even when it’s uncomfortable. If we allow unethical behavior to slide for the sake of job security or fear of rocking the boat, we’re complicit. HR must be bold, courageous, and unwavering. We must say: “This is not acceptable here.” Even if we’re standing alone.

Because this isn’t just about individual CEOs getting caught, it’s about a much bigger crisis. The erosion of ethics in business affects our entire economy, our culture, and our people. If HR doesn’t step up to protect our workplace values, who will?

At the end of the day, success achieved without integrity isn’t success at all. It’s only a matter of time before it crumbles. And in a time when ethical leadership is in short supply, HR has a rare and powerful opportunity, to protect the people, the business, and the truth.

Together, we can all STOP corruption!

If you you want to attend a 2-Day Ethics Certificate Program, or you need your team to attend, check out our 2-Day Compliance and Business Ethics Certificate Program.

-Elga Lejarza, Founder & CEO of HRTrainingClasses.com