The idea that powerful individuals' private actions can have an effect on public life is known as "agency theory." Agency theory refers to how people with power and authority affect organizations through their choices and behaviors. Leaders' sexual infidelities may reflect their personal lives but also significantly impact institutions they lead and govern. Institutions are social constructions built upon principles and ideals, which must be maintained and protected for their existence. If leaders violate these norms, it undermines the organization's legitimacy and credibility. Institutional legitimacy is the acceptance of rules, procedures, and practices as necessary and appropriate for society. Legitimate institutions are valued and respected, while illegitimate ones face challenges and resistance. The consequences of institutional illegitimacy vary from increased scrutiny, skepticism, criticism, or rejection to loss of funding, support, memberships, votes, and public trust.
Leaders who engage in sexual misconduct risk losing public trust and legitimacy for themselves and their organizations. When leaders act irresponsibly, it raises doubts about their judgment and integrity. This erodes public confidence in their leadership abilities and casts doubt on the institution itself.
Bill Clinton's affair with Monica Lewinsky resulted in his impeachment proceedings and damaged Americans' faith in their government. Harvey Weinstein sexually assaulted dozens of women, triggering a MeToo movement against sexual harassment and assault. His company was disgraced and forced into bankruptcy.
When leaders cheat on their spouses, it creates distrust within the workplace. Employees feel betrayed by someone entrusted with power over them, leading to mistrust between colleagues and supervisors. It also negatively impacts morale, motivation, productivity, and retention, increasing turnover rates and decreasing job satisfaction. When workers no longer believe in an organization's values and mission, they may seek employment elsewhere.
Sexual indiscretions can jeopardize the institution's reputation beyond its leader's personal brand. Companies that hire known philanderers face legal liabilities, employee lawsuits, boycotts, bad press, and financial losses. They must explain how their policies address such behavior or risk being seen as permissive toward immoral conduct. Leaders who engage in extramarital affairs are viewed as hypocritical and unethical, undermining their credibility and diminishing respect for the institution. Institutional illegitimacy affects all employees' reputations, not just those involved directly. This leads to negative perceptions about the entire industry, which can be detrimental to businesses and individuals alike.
Some argue that sexual misconduct is only a private matter and should stay private. In theory, this could prevent public outcry from damaging institutions unnecessarily. Yet, secrets rarely remain secret forever, particularly in today's digital age of social media and instant news cycles. Moreover, leaders' personal lives influence decision-making and behavior, even if unrelated to work.
Donald Trump was accused of sexual assault and harassment but still elected president due to his popularity with voters. His actions threatened to tarnish America's image globally.
While leaders have a right to privacy, their actions impact others professionally and societally. Sexual infidelities can erode legitimacy for both themselves and their organizations, harming morale, productivity, reputation, and finances. Leaders must uphold high standards of ethics and integrity to maintain trust and confidence among stakeholders. When they fail, it threatens the very foundations of our society.
How do leaders' sexual indiscretions impact institutional legitimacy beyond personal reputation?
Leaders' sexual indiscretions can significantly impact their institutions' credibility beyond their reputations. When leaders engage in unethical behavior that is contrary to cultural norms or organizational values, it can erode trust between the leader and followers, causing them to question the leader's ability to lead effectively. This can lead to reduced productivity, morale, and loyalty among employees, resulting in higher turnover rates and decreased profitability.