Strengthening Integrity Leadership in Brazil’s Federal Public Administration

1. Integrity leadership as a driver of change in public entities

Abstract

This chapter reviews the relevance of integrity leadership in promoting organisational cultures of integrity, emphasising the dual role played by leaders as models and managers of integrity. Through their behaviour, leaders can become a driver of change for the behaviour of public servants in public entities.

1.1. A behavioural perspective on integrity leadership

Behaviours matter. Change requires that people start doing things differently. As such, policy makers need to understand better what drives our behaviour. The innovative potential of incorporating the human factor with its psychological, cognitive and social dimensions into integrity policies is widely acknowledged. Nonetheless, human behaviour is often still an underappreciated dimension in the formulation of integrity policies, which tend to focus on legal and institutional reforms. To bridge this gap, the OECD report on “Behavioural Insights for Public Integrity” links relevant insights from behavioural research to anti-corruption and integrity policy making (OECD, 2018[1]).

Three key messages emerge from these behavioural insights for public integrity:

• First, independent from the context, most people want to act with integrity. At the same time, they may engage in unethical practices while still managing to feel being an honest person (Cohn et al., 2019[2]; Fischbacher and Föllmi-Heusi, 2013[3]; Shalvi et al., 2011[4]). This has implications for law and policy making (Feldman, 2018[5]). Traditional anti-corruption measures focus almost exclusively on the corrupt individuals. By doing so, the costs of the anti-corruption measures on the non-corrupt have been largely neglected. Policymakers should focus more on supporting ethical decision-making by providing an enabling environment and trust (Lambsdorff, 2015[6]). As ethical choice is often unconscious, capacity-building and tools may not be enough to promote actual ethical decisions.

• Second, social norms matter in shaping our choices (Bicchieri, 2005[7]; Bicchieri, 2017[8]). People behave according to the beliefs and expectations of what is acceptable within their social context. Integrity reforms may fail if they do not consider existing social norms that may not be aligned with formal regulations and procedures. Again, instead of focusing on bad behaviours and thereby potentially reinforcing existing social norms, making visible good behaviour to promote cultures of integrity could be the key to success. At organisational levels, middle management leaders could play an important role in achieving this.

• Third, integrity policies, even when well-intentioned, may not always deliver the desired impact or may even backfire when people do not react as expected. In particular, when designing awareness raising campaigns policy makers need to consider how the messages conveyed may contribute to unintentionally normalising corruption in the target groups (Cheeseman and Peiffer, 2021[9]; Peiffer, 2018[10]; Corbacho et al., 2016[11]; Ajzenman, 2021[12]). Instead of making assumptions or desiring how people would or should behave, observing and understanding actual behaviour should be the starting point. Also, piloting before upscaling is key. The understanding of cognitive biases and heuristics has improved; they can be predicted and thus factored-in when designing policies.

Clearly, applying behavioural insights to integrity policies requires an in depth understanding of a given context in which people are taking decisions and acting. It takes the concept of “context matters” very serious. Therefore, the OECD has developed a methodology which provides guidance to policymakers on the steps to apply behavioural insights systematically and responsibly to understand why citizens behave as they do and pre-test which policy solutions are the most effective before implementing them on a large scale (OECD, 2019[13]).

This methodology, known as the BASIC methodology, consists in the following five steps:

1. Behaviour: Identify and better understand the behaviours that are driving the policy problem.

2. Analysis: Review the available evidence to understand which psychological and cognitive factors are causing the targeted behaviours (why people behave as they do?).

3. Strategy: Translate the analysis to behaviourally informed strategies that will effectively change the identified behaviour(s) at the root of the policy problem.

4. Intervention: Design and implement an intervention to test which strategy is the most effective to address the problem and reach the policy outcome.

5. Change: Look back at the exercise, think about the long-term implications of the intervention and decide whether to develop plans to scale-up into a fully policy intervention to sustain behaviour or bring the project to an end.

In Brazil, the OECD has been supporting the Office of the Comptroller General of the Union (Controladoria-Geral da União, CGU) in implementing a project aimed at strengthening the policies, methods and institutions to promote integrity in the federal executive branch of Brazil. This project has three components: i) a review of the integrity risk assessment methodology (OECD, 2022[14]); ii) an analysis of the Public Integrity System of the Federal Executive Branch (Sistema de Integridade Pública do Poder Executivo Federal, SIPEF) to strengthen the Integrity Management Units (Unidades de Gestão da Integridade, UGIs) (OECD, 2021[15]); and iii) the application of behavioural insights to selected public integrity policies. Additionally, within the framework of this project, the OECD supported the CGU in identifying and defining the key Values for the Federal Public Administration (Valores do Serviço Público Federal) by means of a participative process with key stakeholders including public officials, citizens and representatives of the private sector.

As part of the third component of this project, a focus group was carried out by the OECD with experts from the CGU aimed at identifying areas where applying behavioural insights could be explored further. Two areas were identified: integrity risk management and integrity leadership. As a result, some avenues for considering behavioural dimensions in integrity risk management were explored in a previous OECD report (OECD, 2022[14]). In turn, the current report focuses on identifying key aspects to impact on the behaviour of leaders within the federal public administration. It followed the idea of the BASIC methodology and, in addition to interviews and focus groups, implemented a survey of Brazilian senior civil servants (see ‎Annex A). The report provides concrete recommendations, informed and inspired by behavioural insights, on how Brazil could strengthen integrity leadership in its federal public administration.

1.2. Why integrity leadership matters

The tone at the top matters for integrity. First, leaders assign resources to integrity systems, designate them as organisational priorities, oversee their co-ordination and integrate them into the core of their organisational management. Second, from a behavioural perspective, leaders can provide a motivation for others in the integrity system to uphold those values (Mayer et al., 2009[16]; Hanse et al., 2013[17]). Indeed, a clear and repeated commitment to integrity by leadership emphasises common values and signals to all public officials that integrity is a crucial part of their professional identity (OECD, 2018[1]). The top does not only refer to the highest political and management levels. The relevance of middle and lower management cannot be downplayed, as their immediate impact on the behaviours of staff under their direct responsibility may arguably be even higher and more direct (OECD, 2020[18]; OECD, 2018[1]). For example, a study of local governments in the United Kingdom found evidence for the role played by leaders in promoting and reinforcing standards of conduct especially when they intervene informally to steer behaviour and resolve emerging problems rather than just relying on formal mechanisms (Downe, Cowell and Morgan, 2016[19]).

At the same time, research showed that ethical leaders should not be perceived by their employees as “moral judges” who are looking “down upon them” (Stouten et al., 2013[20]). The study carried out with samples from Belgium, the Netherlands and the US therefore suggests that ethical leaders should recognise employees’ values and approach them respectfully. More than just discussing expected behaviours of employees with them, leaders should also care about how employees feel about the application ethical standards in their daily work (Stouten et al., 2013[20]).

For this report, leaders are considered as “senior civil servants who occupy the highest-ranking positions of administrative bureaucracies and who lead public civil servants in the pursuit of governmental goals” (Gerson, 2020[21]). However, many of the findings and recommendations included in this report equally apply to line/middle managers. As mentioned, line/middle managers probably matter even more than those at the very top, because of their larger day-to-day proximity to most public servants, who tend to take values and moral signals from those they see around them rather than those at the very top who they rarely see.

Integrity leadership helps demonstrate a public sector’s commitment to public integrity. More specifically, integrity leadership refers to “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making” (Brown, Treviño and Harrison, 2005[22]). This means that to be an integrity leader, two interrelated aspects, termed as the “moral person” aspect and the “moral manager” aspect (Treviño, Hartman and Brown, 2000[23]), are required:

• The leader, as a high-level public official, needs to be perceived as a “moral person” who understands the values underpinning the public service and his/her particular organisation and uses them to make the right decisions, even when faced with an ethical dilemma. Senior civil servants are required to negotiate multiple and often competing values and conflicts between values – which are common and often unavoidable, e.g., between democracy and bureaucracy; efficiency and equality; consistency, change and innovation; accountability and risk taking (Gerson, 2020[21]). Leaders must understand these trade-offs and the implications of their decisions. In addition, research evidenced that prosocial behaviour is contagious (Chancellor et al., 2018[24]; Chancellor, Margolis and Lyubomirsky, 2018[25]): by being kind, leaders can promote prosocial behaviour such as kindness. In a nutshell, by changing and making visible their behaviours, leaders can help creating norms that others may follow (Acemoglu and Jackson, 2013[26]).

• Furthermore, the leader needs to be perceived as a “moral manager” who communicates openly about integrity and gives employees the tools and confidence to make ethical choices, encourages them to seek advice, to voice their opinions and makes them feel comfortable to freely discuss integrity concerns and to raise questions before they become damaging to the organisation and the work environment (Wu and Danqi, 2015[27]). Leaders can actively shape an environment of psychological safety within their teams (Newman, Donohue and Eva, 2017[28]; Edmondson, 1999[29]). In short, leaders can actively promote and reward appropriate behaviour and discipline bad conduct (Brown, Treviño and Harrison, 2005[22]).

Not only both roles are important, but there also needs to be consistency between them (OECD, 2009[30]). Particularly worrying is a situation where a manager pretends to be a “moral manager”, this is, a manager of integrity, but is not acting as a “moral person” or model of integrity. Such a hypocritical leader “talks the ethics talk” but does not “walk the ethics walk”; the words are not aligned with deeds and reflect a lack of behavioural integrity (Treviño, Hartman and Brown, 2000[23]; Simons, 2002[31]). If employees perceive discrepancies between rhetoric and behaviour, this may lead to cynicism and could even nurture the ability of employees to justify their own unethical practices (OECD, 2009[30]; OECD, 2018[1]; Tenbrunsel and Messick, 2004[32]).

“…ethical philosophies will have little impact on employees‟ ethical behaviour unless they are supported by managerial behaviours which are consistent with these philosophies” (Stead, Worrell and Stead, 2013[33]).

As such, through social learning, good leadership at all levels appears to be key in the establishment of an open culture of integrity inside organisations (OECD, 2018[1]; Bandura, 1977[34]). While integrity leadership is not a silver bullet (Wang et al., 2021[35]; Kalshoven, van Dijk and Boon, 2016[36]), leaders can be important vectors for organisational change by living and promoting institutional values and principles (Box ‎1.1).

Box ‎1.1. Applying Behavioural Insights to Organisations: Theoretical Foundations

Nudging supervisors or other powerful or influential people within an organisation can have a multiplying effect such that the behaviours exhibited and endorsed by influential individuals have a better chance of being adopted en masse, nudging a whole organisation in the process. Indeed, charismatic and transformational leaders are believed to possess qualities that inspire followers to behave in desired ways in service of a larger goal. Nudging such leaders can effect largescale behavioural change.

Of course, those in formal leadership roles toward the top of the organisational hierarchy are also in a good position to effect widespread behavioural change by altering organisational policies and procedures. Nudges that help high-level decision makers (leaders, boards, etc.) optimise organisational policy decisions in the face of their own biases and irrationalities can have an effect. Thus, helping decision makers see the connection between policies, procedures, and behaviour on the ground is another way to nudge whole organisations.

Source: (OECD, 2020[37]).

Measures supporting an open organisational culture operate on several dimensions, including awareness, engagement, credibility, empowerment and courage (Table ‎1.1). For instance, when looking at the effectiveness of reporting channels, prior to pondering whether to communicate an ethical concern, an employee must first be able to detect misconduct and violations of integrity standards (Berry, 2004[38]). However, being aware is not sufficient: When organisational values and norms conflict with those of the employee, their commitment and involvement to the organisation will likely suffer. In this sense, engaging public servants and deepening their commitment to organisational values and norms is needed to encourage them to speak up about violations and defending their organisation’s interests. This is supported when senior civil servants act as role models, ensuring that the organisation’s norms and values are credible and lived in the organisation. An open organisational culture requires empowerment and courage of employees to raise ideas or concerns while knowing they will not be punished for their courage and initiative.

Table ‎1.1. Dimensions of an open organisational culture

Dimension	Guiding questions
Awareness	What are the standards in this organisation? What is my role in upholding these standards?
Engagement	Do I believe in the values of this organisation? Are they congruent with my personal values and beliefs? How attached am I to the organisation? What am I willing to do on behalf of the organisation?
Credibility/Trust	If leaders do not follow or uphold standards, the standards must not be meaningful. If no one follows the rules, then why should I? If leaders do not behave consistently with what is stated formally, then how can they be trusted? If I cannot trust leadership, how can I believe in the integrity of this organisation?
Empowerment	Who will listen to me? Will anyone believe me? Can I make a difference? Will I even be heard?
Courage	What will happen if I go forward? Will anyone support me? What risks are involved? What can I afford to lose? Am I committing career suicide? Is it worth it? What if I am wrong?

Source: adapted from (Berry, 2004[38]).

These dimensions suggest that senior civil servants, leaders, have a key role in encouraging an open organisational culture. First, by setting the right example from the top, senior officials ensure the credibility of the organisations’ standards. Second, by communicating about values and standards and engaging employees in discussions on integrity norms, senior officials promote officials’ engagement to the values of the organisation. Third, by advising employees on integrity challenges and listening and acting upon employees’ suggestions and reports of misbehaviour without punishing them, senior officials promote officials’ empowerment and courage. Indeed, in organisations where dialogue and feedback are appreciated by management, employees are more willing and feel more comfortable to discuss and report suspected misconduct internally (Heard and Miller, 2006[39]). Research showed that by creating a psychologically safe environment within their team, integrity leaders can enhance employers’ voice behaviour (Walumbwa and Schaubroeck, 2009[40]) and internal whistleblowing (Liu, Liao and Wei, 2015[41]; Shaukat Malik and Kashif Nawaz, 2018[42]). Research also showed that a supporting and encouraging behaviour of leaders is strongly associated with the willingness of employees to blow the whistle (Bhal and Dadhich, 2011[43]).

In turn, research emphasises that there is also a “dark side of leadership” when leaders behave in ways that are destructive and counterproductive both for their employees and their organisation (Schyns and Schilling, 2013[44]; D’adda et al., 2017[45]). Leaders are human beings. They can be subject to biases that can lead them unconsciously to make decisions that are not ethical or that make them blind to unethical practices in their surroundings. For example, research shows that leaders and high-ranking individuals who identify strongly with their organisation can present a higher risk of letting integrity breaches go unchallenged. This happens because this strong identification conducts them to perceive as ethical their organisations’ practices, even when they are not (Kennedy and Anderson, 2017[46]). Also, leaders may overestimate their own ability to prevent an integrity breach or underestimate the likelihood of an integrity breach among their peers and employees. Managerial oversight is therefore insufficient as the only defence of integrity. It is thus important to remember there are always two faces of leadership, with some “leadership pathologies” that need to be understood and taken into account in trainings and organisational policies (Washbush and Clements, 1999[47]). In this sense, investing in integrity leadership needs to promote and empower good leaders, make them aware of potential consequences of their positions of power and biases, but also prevent or timely detect destructive leaders that could establish unethical practices as the norm to follow.

The OECD Recommendation on Public Integrity recognises the role leadership plays in building an open culture of integrity within public institutions (Box ‎1.2). Similarly, the OECD Recommendation on Public Service Leadership and Capability emphasises the relevance of a values-driven culture and leadership in the public sector and calls for defining the values of the public service, promoting values-based decision-making and building leadership capability in the public service (OECD, 2019[48]). More specifically, four main leaderships capabilities for a high performing civil service have been defined: (1) value-based leadership, (2) open inclusion, (3) organisational stewardship and (4) network collaboration (Gerson, 2020[21]). These aspects will be picked up in the following sections.

Box ‎1.2. Integrity Leadership in the OECD Recommendation on Public Integrity

The OECD Recommendation on Public Integrity calls on adherents to “invest in integrity leadership to demonstrate a public sector organisation’s commitment to integrity”.

This can be achieved in particular through:

• Including integrity leadership in the profile for managers at all levels of an organisation, as well as a requirement for selection, appointment or promotion to a management position, and assessing the performance of managers with respect to the public integrity system at all levels of the organisation.

• Supporting managers in their role as ethical leaders by establishing clear mandates, providing organisational support (such as internal control, human resources instruments and legal advice) and delivering periodic training and guidance to increase awareness of, and to develop skills concerning the exercise of appropriate judgement in matters where public integrity issues may be involved.

• Developing management frameworks that promote managerial responsibilities for identifying and mitigating public integrity risks.

Furthermore, the OECD Recommendation on Public Integrity encourages an open culture within the public sector “where ethical dilemmas, public integrity concerns, and errors can be discussed freely, and where appropriate, with employee representatives, and where leadership is responsive and committed to providing timely advice and resolving relevant issues”. As such, an open organisational culture requires leaders that are responsive and committed to providing timely advice and resolving relevant issues, and employees who are comfortable raising ethical concerns.

Source: (OECD, 2017[49]; OECD, 2020[18]).

The next chapter (Chapter 2) provides an overview of integrity leadership and open organisational cultures in the Brazilian federal administration, identifying challenges and opportunities for strengthening integrity leadership. This analysis leads to a set of recommendations to promote integrity leadership behaviour in Brazil, which are explained in detail in Chapter 3.