What is Cronyism? (Overview, Definition, and Examples)

Business ethics include the principles and values that guide ethical behavior in business, including how organizations and their members should conduct themselves. From a moral standpoint, cronyism is considered unethical as it involves using personal relationships and biases to gain privileges rather than evaluating individuals based on their worthiness. It can undermine the principles of fairness, meritocracy, and equal opportunity, which are fundamental ethical principles in most organizations.

An emergency board meeting may allow cronyism to flourish, as decisions need to be made quickly without proper oversight or scrutiny. Organizations should draft a board meeting agenda to establish clear protocols for emergency board meetings to avoid giving undue advantage to friends or family members.

Why is cronyism unethical?

Cronyism is unethical for several reasons, including;

• Lack of fairness, as it involves giving preferential treatment to individuals depending on relationships rather than evaluating them objectively based on their skills and value. 
• Breach of trust and confidence in the organization, as it creates a perception that decisions are made from intimate connections instead of objective criteria.
• Lack of transparency, as cronyism involves making decisions without proper transparency or accountability, creating an environment where unethical behavior can flourish. Preventing cronyism can be especially challenging in closed board meetings.
• Negative impact on performance as the chosen individuals are often less qualified. As a result, their performance may harm the organization and morale.

To prevent the possibility of cronyism and other forms of corruption, prepare for a board meeting in advance to ensure the meeting is conducted openly and transparently. Board members can enhance transparency by distributing the agenda before the meeting, along with relevant documents and information that board members need to make informed decisions.