“In a world of increasing compliance, the challenge isn’t just following the rules; it’s ensuring we remain human. Being legally correct but morally wrong is a trap too many organisations fall into. Principles, not just rules, must guide our decisions.” Piers Fallowfield-Cooper

What do a stylishly dressed prime minister, a shipyard in Brest, and The Boeing Company all have in common? The answer is they were all involved in actions that were technically legal but that most of us would call morally wrong.

Britain’s Prime Minister Sir Kier Starmer foolishly accepted free Taylor Swift tickets, a new wardrobe, and, most provocatively, costly glasses from wealthy donors. The Damen shipyard in Brest, France, is busy repairing the Russian Arctic LNG fleet, and The Boeing Company failed to inform buyers of its new 737 MAX aeroplane that, without additional pilot training, they could crash.

The response to all of these situations has been predictable: calls for increased regulation and control. But is it that simple? Maybe what is needed is a different way of thinking and operating altogether.

The Challenge: When Rules Are Not Enough
In industries such as finance and healthcare, strict regulations, including anti-money laundering (AML) and ‘know your customer’ (KYC) rules, are necessary safeguards but can stifle innovation and creativity.

Overreliance on compliance not only restricts entrepreneurship and creativity but can also become an enabler of a lack of basic competence, epitomized in the catchphrase “Computer says no.”

The Cost of Over-Reliance on Rules
Rigid compliance cultures, very typical in ‘command and control’ organizational structures, risk creating organizations that are ‘scared of their own shadow’. Boeing, for example, had lost their way; the corporate culture had shifted from ‘making great aeroplanes’ to prioritizing profits and shareholder value over safety and transparency. For example, safety concerns from internal whistleblowers were silenced. Boeing was therefore unable to act transparently after the first 737 MAX crash. This excessive control stifled creativity, leaving employees disengaged and opportunities to fix the problem missed. Reputation, too, is at stake. Starmer’s acceptance of lavish gifts may have followed the rules, but it undermined his promise to restore integrity to politics. This erosion of trust highlights why leaders must strive for more than mere compliance.

This is where the idea of an Ethical Barometer, with the image associated with traditional weather forecasting, becomes invaluable. Tapping the barometer was a standard practice to ensure an accurate meteorological reading; in this case, the ‘tapping’ encourages leaders to evaluate their decisions against principles of fairness, transparency, and alignment with core values. It helps bridge the gap between creativity and compliance, ensuring that innovation can flourish within an ethical framework.

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Published in Developing Leaders Quarterly