Case 14: The Waiter Rule: What Makes for a Good CEO?
1. Is character an essential ingredient in ethical leadership? Is it especially important in
managers? In leadership, especially among CEOs, is character important? Why?
Obviously, character is an essential ingredient in ethical leadership. Without character,
managers, including CEOs, lack the moral compass necessary to make ethical decisions in tough
situations. As we saw in the early part of the millennium, absence of character led to immoral
decisions by top management at Enron, WorldCom, Tyco, Adelphia, and HealthSouth. As the
2. Do you agree with the Waiter Rule? Does it provide useful insights into who might be an
ethical or unethical leader? Should corporate boards consider character when hiring someone
for the top position?
I personally agree with the Waiter Rule. As noted in question 1 above, ethical leadership is based
on two pillars: the manager as a moral person and as a moral manager. In addition to other
factors, the Waiter Rule focuses on certain behaviors in order to determine whether an individual
is a moral person. Specifically, the actions of an individual are more important than what they
say. To the extent that an individual says he or she has character but mistreats those in
subordinate roles that could be an indication that the individual may not be a moral person.
3. Is using the Waiter Rule too simplistic a guideline for hiring people in important positions
such as CEO?Is it too simplistic a guideline for judging one’s ethics?
As the case notes, the Waiter Rule “reveals insights into the executive’s character that should be
taken into consideration in hiring decisions.” Thus, the Waiter Rule is one guideline that should
be taken into consideration. In fact, while the Waiter Rule may lead the board to conclusions as
4. Do you have a “Waiter Rule” story or experience to tell?
A friend of mine was in the process of interviewing for applicants for a role in his company.
When the applicant arrived for the job interview, he told my friend, the hiring manager, how