“Integrity is the virtue that turns
a manager into a leader.”
Why is it important for tax administrations managers to be trained in integrity?
Integrity is considered the primary feature for effective leadership. In any organization’s ethical management must be focused on integrity and rely on managers acting with integrity in order to build trust, loyalty and credibility among their subordinates.
When we refer to managers levels, integrity involves three key elements: trust, the credibility and exemplarity. The manager who acts with integrity builds trust and credibility-not forgetting that both trust and credibility are difficult to obtain but very easy to lose-. On the other hand, the manager must be aware that their behavior conveys an example to the members of their organization. As Professor Warren Bennis says, “Nothing destroys the trust of subordinates as much as the perception that people occupying the highest managerial levels are suffering from lack of integrity “
It is important to remember that managerial levels, by the nature of their duties and responsibilities, face a number of ethical risks for exercising an ethical leadership, among others:
- • Abusing power or exercising a coercive leadership,
- • Misusing their privileged access to information,
- • Arbitrary or unfair behavior,
- • Lack of loyalty in decision-making,
- • Poor management of conflicts of interest,
- • Irresponsibility, by not assuming the consequences of the employees’ actions.
On the other hand, and also be-cause of the nature of their roles and responsibilities, the managers have to face a number of ethical dilemmas understood as that situation where two values conflict, and regardless of the final decision, this will always cause some damage.
The risks, and how dilemmas are resolved, will be directly related to the weaknesses or strengths in ethics and integrity of the managers. CIAT, in its effort and commitment to “promoting ethics as an intrinsic part of all the policies of tax administration” has always been very aware of the exemplary role of senior managers. That is why, in 2005 was approved in Buenos Aires the “Declaration on the Promotion of Ethics in Tax Administrations” which establishes as one of the key factors for integrity programs:
“Leadership and Commitment: The primary responsibility in safeguarding and promoting integrity in the tax administration rests with the maximum authority of the tax administration and the senior management. They should adopt a strong leadership role by demonstrating an unequivocal and clear position regarding the integrity and recognize that they must keep maintaining over time the fight against corruption. ”
As pointed out by the Self-evaluation Guide for Tax Administrations, a document and a practical tool designed by CIAT, according to its subtitle, “Convert declarations into actions” the ethical leadership:
- • Is effective through clearly defined supervisory and decision-making structures. The commitment to integrity must spread throughout the organization and cadres should be an example of integrity so their exemplary conduct is vital.
- • It is visible through a system that ensures communication, information and knowledge. Communication provides cohesion and transmission of values and good practices, from an ethical viewpoint, so we should understand it as a two-ways dialogue: from the general direction and executive managers towards other employees and vice-versa. That is why an open and free dialogue without recriminations must involve the senior management and all the organization’s personnel help resolving ethical dilemmas.
- • The effectiveness of initiatives promoting integrity must be object of periodic evaluation. The results will be an essential feedback to management and help ensure that the directorial levels maintain their credibility.
In conclusion, if there is widespread consensus that the tax administration should:
- • Appoint irreproachable and unobjectionable personnel,
- • ensure the highest levels of integrity, exemplarity and probity for all its agents,
- • provide all employees with a clear framework of approved and disapproved behaviours.
- • establish training programs for all employees in both operational and strategic matters.
This is especially relevant in the case of executive and managerial levels.
 Bennis, W., Managing people is like training cats. On Leadership, Editorial Research Center Ramón Areces, Madrid, 2000.