US workplaces are becoming increasingly diverse, a result of both a younger and more racially diverse working class and successful diversity hiring efforts. In federal agencies alone, minority employees jumped from 28.4% of the workforce in 1994 to 36.7% in 2017.

And while that progress is commendable and needed, it can come with some new challenges: Data show that racially diverse workgroups also often experience higher rates of racial discrimination and conflict. However, new research from Inha University and Brigham Young University identifies a practical solution to this new challenge: the right leader.

According to a new study published in Journal of Public Administration Research and Theory, when a diverse organization has an ethical leader, the negative workplace dynamics that can surface are mitigated. Ethical leaders are those perceived to model integrity, honesty, trust, respect, and the ability to listen well.

“Ethical leaders make diverse workplaces better places to work in a number of ways,” said co-author Robert Christensen, BYU professor of public service and ethics. “What we haven’t fully realized up to this point is that ethical leaders actually lead in a way that reduces conflict, including discrimination claims. Ethical leaders introduce a buffering effect that can reduce relational tensions and intergroup prejudice, which a nonwhite employee might be disproportionately likely to experience.”

Lead author Kuk-Kyoung Moon and Christensen studied 65 U.S. federal agencies and their subagencies — including the FBI, FDA, VA, CDC and NASA– from 2010 to 2015, connecting these to data about complaints of discrimination and surveys about how employees perceive workplace conditions.

When leadership was not considered, the researchers found a positive connection between an organization’s racial diversity and race-based employment discrimination. The authors explain that this unsurprising finding stems from an “us vs. them” social categorization in organizations that are highly racially diverse. Such categorization often leads to intergroup bias, including in-group favoritism or prejudice. That bias ends up decreasing employees’ emotional attachment to the organization while also increasing occurrences of racial discrimination.

Encouragingly, when the authors considered leadership, they found that diverse organizations with ethical leaders did not experience these negative consequences. In fact, in agencies where ethical leadership was present racial diversity positively correlates with affective commitment climate and negatively correlates with race-based employment discrimination.

Moon and Christensen explain that “employees are likely to emulate the personal traits and behaviors of ethical leaders, extending fair and honest treatment to others in the same manner in which they receive it from ethical leaders.”

Ethical leaders also may counteract diversity-related conflict by effectively balancing employees’ need to feel that they belong with their need to feel that they make unique contributions. When leaders model ethical behavior in their interactions with employees, it incentivizes employees to do better work for the organization and reduce feelings of out-group conflict.

“Racial diversity brings myriad benefits, including representation, deliberration and innovation, but it’s not a simple fix for American workplaces,” Christensen said. “What we’ve learned is that ethical leadership facilitates ways to overcome some of the negative conflict that often surfaces in racially diverse workforces.”

Organizations should promote ethical leadership through hiring strategies focused on finding ethical leaders and through ethical training programs to better develop managers. Organizations should also signal, in the hiring process, that ethical behavior is highly valued across the organization.

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