Ethical Blindness in the C-Suite: A Multilevel Theoretical Model of Ethical Fading and Organizational Complicity

Abstract: Why do organizational executives overlook the moral consequences of their decisions, despite often being viewed as ethical role models? This paper examines ethical blindness in the C-suite, a phenomenon in which senior organizational leaders unintentionally distort or overlook ethical considerations due to systemic, psychological, and cultural biases. Drawing on peer-reviewed journal articles published from 2013 to 2025, this integrative literature review synthesizes insights from behavioral ethics, organizational leadership, and moral psychology. The analysis reveals how power dynamics, strategic silence, cognitive biases, and flawed reward structures collectively erode ethical judgment, enabling executives to rationalize misconduct while preserving a positive moral self-image. The paper proposes a theoretical model to distinguish between ethical blindness and intentional wrongdoing, accounting for mechanisms such as ethical fading, bounded ethicality, and systemic ethical failures at the infrastructural level. The findings challenge traditional approaches to ethics training, underscoring the need for governance reforms that focus on transparency, accountability, and moral reflexivity within executive leadership. This redirects attention from individual failings to the systemic conditions that perpetuate ethical blindness at the highest organizational levels. Keywords: Ethical Fading, Corporate Executives, Business Ethics, Organizational Leadership