AirAsia debacle: Code of ethics for CEOs

On joining an organisation, employees are typically required to adhere to a set of ethical guidelines. The question is whether these same ethical standards should be applied to the CEO and senior-level executives.



‘What was he thinking?’ That’s exactly how most people reacted to a recent post from a senior executive of a known brand. Can the social-media posts of a CEO cause harm to his company’s brand image? It definitely can and if the post is accompanied by a picture of the CEO getting a massage while attending an online meeting, it can indeed ruin the image altogether. This is exactly what is happening with AirAsia. Understandable too, what with Tony Fernandes, CEO, AirAsia’s bare torso being viewed by thousands on LinkedIn. Fernandes’ expression of love for his company’s culture as it allows him to enjoy a massage and be part of a management meeting at the same time has only added fuel to the spreading criticism.

While the image created quite the stir, sending social media into a frenzy, it also gave rise to discussions on how important it is for senior leaders to conduct themselves appropriately in public.

In the corporate world, ethical conduct is a fundamental principle that guides an organisation’s culture and influences its relationships with employees, customers, shareholders and the broader community. Chief executive officers (CEOs) and top executives must set the ethical standard within the organisation, just like other employees.

Coming from the top executive of an airline, Fernandes’ post has naturally raised concerns about professionalism and appropriateness.

Ramesh Shankar S, chief joy officer,, shares that such posts send the wrong message and set a questionable example. “As a CEO or senior leader, one is expected to lead by example, and such behaviour is seen as unprofessional. Moreover, it may not sit well with clients, customers, or employees, as it gives an unfavourable impression of the company and its leadership.”

Little wonder then that the positive sentiment surrounding AirAsia has dropped while negative sentiment has surged, according to media intelligence firm, CARMA Asia. To be precise, positive sentiment dropped from from 33.4 per cent to 14.8 per cent. Negative sentiment, on the other hand, surged from 13.9 per cent to 33.2, all thanks to Fernandes’ post!

CEOs, as the highest-ranking individuals within a company, bear the profound responsibility of steering the organisation in the right direction. Their decisions and actions have far-reaching consequences that can affect employees, stakeholders and the society at large. Ethical leadership, in this context, involves more than just adhering to laws and regulations; it entails a commitment to guiding the company in a morally upright manner.

“As one climbs the corporate ladder, one is expected to be more careful and mindful of one’s actions because one represents the entire company”

Chandrasekhar Mukherjee, CHRO, Bhilosa Industries

This incident raises a fundamental question. Does the same code of ethics and conduct that applies to regular employees extend to CEOs and other top executives as well? The argument here is that ethics should be uniform across all levels of an organisation. It can’t differentiate between what a new hire, middle manager, or CEO can or cannot do.

Chandrasekhar Mukherjee, CHRO, Bhilosa Industries, emphasises, “As one climbs the corporate ladder, one is expected to be more careful and mindful of one’s actions because one represents the entire company. It’s akin to how parents tell their children that they represent the family, and therefore, in school or wherever they go, they should behave appropriately.”

He strongly believes that in a corporate setting, behaving improperly, such as getting a massage in a board meeting, is not acceptable. “In fact, it could even be seen as harassment, especially if it makes someone uncomfortable. It’s just not professional. Would we allow a junior employee, a security guard, or anyone else to do such a thing in a meeting? The answer is a resounding no.”

Consequences of unethical leadership

When CEOs fail to uphold ethical standards, their actions send shockwaves throughout the organisation and the business landscape. One of the most immediate and tangible consequences is the damage to the company’s reputation. A tarnished image, often accompanied by negative media coverage, can result in a loss of trust from customers, investors and the public. It’s not just the CEO’s personal reputation at stake but the brand and image of the entire organisation.

Moreover, unethical CEO behaviour frequently leads to legal and regulatory issues. Violations of laws and regulations can expose the company to fines, lawsuits and regulatory sanctions.

Employees who witness or experience the unethical behaviour of their CEO may become demoralised and disengaged. When ethical standards are not upheld at the highest levels, it sends a signal that such behaviour is acceptable, and this can lead to reduced productivity, increased turnover and a negative work environment.

Members of the leadership group may feel disillusioned, less inclined to collaborate, and hesitant to support such a CEO’s initiatives. This disruption at the highest levels of an organisation can have a ripple effect, impacting decision-making processes and the ability to effectively steer the company.

A CEO’s unethical behaviour can set a dangerous precedent within the organisation, encouraging similar behaviour among employees. This can lead to a toxic corporate culture where unethical actions become normalised. Over time, this culture can damage the organisation’s reputation and undermine its ethical foundations.

In this case, the airline has reportedly even claimed that the women in the management team — who were attending the meeting— were asked if they’d be comfortable if their CEO went ahead with a much-needed / much-deserved massage after long hours of work. AirAisa may defend the act as much as it wants, but far from showcasing it as a fun and open place to work, it projects a ‘too casual for his own good’ image of its CEO, who does not seem to value the serious and very responsible position of authority he holds.

“As a CEO or senior leader, one is expected to lead by example, and such behaviour is seen as unprofessional. Moreover, it may not sit well with clients, customers, or employees, as it gives an unfavourable impression of the company and its leadership”

Ramesh Shankar S, chief joy officer,

Shareholders are another group deeply affected by unethical CEO behaviour. They may express their discontent by voting against CEO compensation packages, launching shareholder activism campaigns, or even attempting to remove the CEO from their position. Such actions can destabilise the organisation, impact its stock value and lead to a lack of investor confidence.

The consequences of unethical CEO behaviour can extend beyond the individual organisation to the entire industry. Scandals and unethical behaviour in one company can cast a shadow over the entire sector, leading to increased regulation and scrutiny by government authorities. This can result in greater oversight and compliance costs for all industry players.

In the most extreme cases, unethical actions by a CEO can result in criminal charges, imprisonment and personal liability for financial damages. The legal and personal repercussions can be devastating not only for the CEO but also for the organisation they once led.

Mukherjee further adds, “If we think about it, it’s highly unlikely that the same individual would allow someone else to behave similarly during a meeting. The question to ask is, ‘Would he permit others to enjoy a massage during a meeting?’ Probably not.”

“It’s vital to treat these situations seriously and with consistency, regardless of one’s position in the company. Ethical standards should be upheld uniformly, no matter where one is in the corporate hierarchy,” says Mukherjee.

Shankar explains, “The same code of ethics should indeed be applicable to everyone within the organisation, regardless of their position. It’s a matter of consistency and fairness. In most multinational companies, employees at all levels are expected to sign and adhere to the same code of ethics.”


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