If you’ve ever been in a managerial role, you’ve probably faced a moment that made you pause and think, “Is this the right call?” That gut-check moment is a hallmark of ethical decision-making — and it’s also one of the hardest parts of being a manager.

Between tight deadlines, team dynamics, and business pressures, managers are often in the hot seat when it comes to ethics. And while most don’t set out to make ethically gray decisions, real-world scenarios can get complicated fast.

At Ethena, we believe that ethics shouldn’t be an afterthought or a box to check. That’s why we teamed up with Ethisphere — an organization known for setting the gold standard in ethical business practices — to create our Ethical Management training course. But before we get to that, let’s dig into some of the most common ethical challenges managers face and how to handle them like a pro.


Sample Ethena's Ethical Management training

1. The pressure to perform vs. doing what's right

Let’s start with a classic dilemma: performance pressure. A sales manager is behind on quarterly goals. A product lead is rushing a feature out the door. A supervisor is asked to "fudge the numbers" to make a budget work.

It’s easy for managers to feel caught between business goals and personal value, especially when leadership is pushing hard for results.

How to handle it:

  • Lead with transparency. When ethical concerns arise, bring them up early. Raising a red flag doesn’t make you difficult — it makes you responsible.
  • Set realistic expectations. If your goals are unachievable without cutting corners, speak up. Ethical management starts with honest goal setting.
  • Model behavior from the top. If you show that ethics take priority over numbers, your team will follow your lead.

💡 Ethena tip: Know your company’s escalation channels and use them. Sometimes, the most ethical thing you can do is simply ask the right question to the right person.

2. Favoritism and fairness in team management

Whether it’s giving plum assignments to the same employee or overlooking poor behavior from a top performer, favoritism can quickly erode trust. Even unintentional unintentional bias can lead to ethical pitfalls. And once your team senses unfairness, it’s hard to rebuild that credibility.

How to handle it:

  • Make decisions based on documented criteria. When assigning work, promotions, or rewards, be clear about why.
  • Diversify input. If you’re unsure whether you’re being fair, loop in another manager or HR to gut-check your decisions.
  • Solicit anonymous feedback. It’s one of the best ways to learn how your team actually feels.

💡 Ethena tip: Affinity bias — the tendency to favor people who remind us of ourselves. It’s subtle, but powerful.

3. Handling conflicts of interest

What happens when a manager’s personal interests bump up against their professional responsibilities? Maybe they’re hiring for a role and a close friend applies. Or maybe they’re in charge of vendor selection and a family member owns one of the businesses.

Even if intentions are good, perceived conflicts of interest can create serious ethical headaches.

How to handle it:

  • Disclose, disclose, disclose. The earlier you disclose a potential conflict, the easier it is to create a plan that maintains objectivity.
  • Recuse yourself when needed. If there’s even a hint of bias, step aside and let someone else make the call.
  • Refer to your company’s code of conduct. If you’re not sure what counts as a conflict, your code of ethics likely has clear examples.

💡 Ethena tip: Ethical managers don’t just avoid conflicts of interest — they proactively guard against the appearance of one.

4. Responding to employee misconduct

No one likes having hard conversations. But when someone on your team crosses an ethical line — like harassment, discrimination, or dishonesty — it’s your job to act.

This is where many managers freeze up. What if the person denies it? What if they’re a high performer? What if the situation feels “gray”?

How to handle it:

  • Don’t delay. The longer you wait, the more you risk normalizing bad behavior or exposing your company to legal risk.
  • Follow your reporting procedures. Loop in HR or legal as soon as something serious arises.
  • Document everything. Even if the issue turns out to be a misunderstanding, having a record of what was said and done protects everyone involved.

💡 Ethena tip: A psychologically safe team isn’t one without conflict — it’s one where employees trust that misconduct will be addressed fairly.

5. Whistleblower retaliation (no matter how subtle)

Let’s say someone on your team reports unethical behavior to HR or through your ethics hotline. Now you’re in a tricky spot. Even if you’re not upset with the employee, any perceived change in how you treat them can look like retaliation.

And retaliation doesn’t have to be dramatic, either. It can look like removing someone from a project, giving colder feedback, or even social exclusion.

How to handle it:

  • Be aware of your behavior. Small changes can feel big to someone in a vulnerable position.
  • Overcommunicate. Let your employee know you’re glad they spoke up — and that your focus is on supporting them.
  • Don’t go it alone. Ask HR or legal for support in managing the team post-report.

💡 Ethena tip: Retaliation claims are one of the most common compliance issues employers face — and one of the most preventable.

6. Navigating gray areas (when the "right" answer isn't obvious)

Some ethical situations don’t involve clear rule-breaking, but still leave you uneasy. Maybe you’re being pressured to take a “creative” interpretation of a policy. Maybe a vendor gave your team expensive gifts. Or maybe you're facing a values clash within your team that’s affecting morale.

These gray areas are where ethical management matters most.

How to handle it:

  • Use an ethical decision-making framework. Ask: Is it legal? Is it aligned with our values? Would I be comfortable if this were made public?
  • Consult trusted advisors. Two heads are better than one, especially when objectivity is a challenge.
  • Lean on your training. The more you’ve practiced thinking through ethical scenarios, the easier it is to act with confidence.

💡 Ethena tip: Managers don’t need all the answers; they just need a clear process for finding them.

7. Company culture that sends mixed signals

Sometimes, the problem isn’t a single decision — it’s the environment managers are operating in. If a company talks about integrity but rewards questionable behavior, managers will struggle to act ethically without support.

Culture clashes can make ethical management feel lonely, but you’re not alone.

How to handle it:

  • Be the culture you want to see. Your actions send a louder message than any policy ever could.
  • Use your influence. Managers are the single most influential factor in shaping team culture.
  • Advocate upward. If leadership needs to hear what’s happening on the ground, be the one to speak up — or find allies who will.

💡 Ethena tip: Values that look good on paper but aren’t reflected in how decisions are made.

The bottom line

At the end of the day, ethics isn’t a checkbox. It’s how we build trust, credibility, and strong teams. When managers lead with integrity, employees are more engaged, innovation flourishes, and companies perform better.

But ethical leadership isn’t something we’re born knowing how to do. It’s a skill — and like any skill, it can be learned and strengthened over time.