A CEO urges employees to buy stock in the company and then sells his/her personal stock because of a coming change that will likely decrease the stock prices. The actions of the CEO showed

• A. Unethical behavior
• B. Compliance violation
• C. Transparency breach
• D. Reputation Risk

Answer: (A)

Ethical behavior in leadership is being tested. Asking employees to buy stock based on a suggestion from the CEO, while secretly selling your own shares because you know a change will likely push prices down, shows using your position for personal gain at others’ expense. That kind of action breaches trust, exploits privileged information, and puts personal interests ahead of shareholders and the company. It demonstrates a lack of integrity and fairness in how the CEO conducts themselves, which is the core issue here. While it could also raise legal or compliance concerns and certainly could harm the company’s reputation, the fundamental problem illustrated is unethical conduct.