Sandra Shullman, PhD, a consulting psychologist who specializes in leadership development, was excited when a potential client approached her with a lucrative engagement. A health care executive was eager for her to work with his team, but it soon became clear that the group was struggling, and the executive wanted access to Shullman’s confidential assessment data to help him decide who to keep on the team. “I explained that we could share summary information about the group, but not specific details or scores of individuals,” said Shullman, a partner at Executive Development Group’s Ohio office. “He was quite upset, and we had to walk away from the engagement.”
Moments like this can reveal a consulting psychologist’s level of commitment to ethical practices in a field that is largely unaddressed in APA’s Ethics Code. Much of the code speaks to situations in clinical psychology that involve individual or group therapy, but consulting psychologists are often working with multiple people simultaneously within an organization, company, or nonprofit, said Rodney Lowman, PhD, president of Lowman & Richardson/Consulting Psychologists, PC, in San Diego and a member of APA’s Ethics Code Task Force. The clients, for example, might simultaneously include a CEO receiving coaching, the executive team reporting to the CEO, and the board of directors that hired the psychologist. “We are working in a much more fluid environment that often involves multiple relationships, so there are significant ethical challenges,” said Lowman, who is also a professor emeritus at the California School of Professional Psychology at Alliant International University.
Although the ethical risks are numerous, experienced consulting psychologists agree that most pitfalls can be avoided by clarifying the goals of the job up front and how the goals will be accomplished. “If this is not clear, psychologists may unintentionally harm the reputation of an individual or an organization, which can have significant psychological, social, and financial implications,” said Shullman.
Ethical missteps can also compromise a psychologist’s credibility. “When you are delivering a service, your reputation and brand are paramount, especially in psychology because our work depends on building and maintaining trust with clients,” said Liz Sweigart, PhD, a consulting psychologist in Houston who experienced the consequences of broken trust early in her career. She was working at the Arthur Andersen accounting firm in 2001 when news broke that the company had been involved in the Enron scandal. “I saw how thousands of people who had no involvement in the breach were horribly impacted, and that set me on a path to help consultants identify and mitigate ethical risks,” she said.
Consent is critical
One vital strategy for maintaining trust in consulting relationships is taking time to understand the expectations of the different stakeholders, said Sweigart, who honed her expertise in risk mitigation while working in investment banking and as a partner at a global public accounting firm. By obtaining informed consent from the parties involved in an engagement, psychologists can protect themselves, the people they coach, and the hiring organization. This consent can detail the terms of confidentiality—such as who will be privy to data or other information from assessments, interviews, and coaching sessions—the scope of work, the timing, deliverables, and fees. Consultants can refer to the terms of the agreement when confronted with situations that raise ethical questions.
“What if I am working with an executive on issues related to developing the senior team, and during a coaching session he or she says, ‘This information is confidential, right?’” said Lowman. The executive proceeds to share plans to leave the company and asks for coaching to prepare for a job change. Clearly stated terms in an informed consent agreement will dictate whether this request is within the scope of the consultant’s job. Clients should also understand that confidentiality may not apply when psychologists hear about situations involving sexual, physical, child, or elder abuse, he said.
Explaining the terms of confidentiality may require extra time and caution in countries with different cultural norms, but patience during these negotiations can prevent misunderstandings and conflictual interactions once the job begins. Shullman has worked in countries where businesses and governments assume that they own information about people, and the notion of privacy is unwelcome. Employees may have different rights in these countries than in the United States. “We have to be respectful of cultural norms while also honoring the ethical boundaries of our work,” said Shullman. “Most of the time these conversations are very collaborative, but once in a while I encounter bad actors who are not interested in honoring confidentiality.” In those cases, she is prepared to decline the engagement.
Making judgment calls
While consent agreements can cover many eventualities, there are some situations in which industrial and organizational psychologists must rely on their own moral code to decide how to respond. Doug Riddle, PhD, president of APA’s Division 13 (Society of Consulting Psychology), was working with an organization when he learned that a senior leader was misusing corporate funds. The activity was self-serving but not illegal. “Some consultants would not say anything, but I felt I had a moral obligation to the organization,” said Riddle, who honed his expertise in consulting at the Center for Creative Leadership in San Diego. “I explained to leaders at the company that I could not give details, but I thought that their financial records would be worth investigating.”
Shullman voices concerns if she learns that she has been hired under false pretenses. Once, a large manufacturing company asked her to coach an executive who was struggling as a leader, but she discovered that the organization intended to fire the executive regardless of the outcome. “They had hired me to check a box so they could let him go without repercussions,” she said. She approached a company leader about her discovery, and she explained that this information changed the goals and conditions of the coaching. They were willing to modify the terms of the agreement and allowed her to use the coaching sessions to help the executive prepare to find a new job.
In other cases, ethical misgivings may lead psychologists to turn away new business because a company is involved in an industry that is legal yet controversial. “As a mother of young daughters, I would not feel comfortable consulting with a company that encourages youth smoking,” said Sweigart. “Consultants need to consider whether they want their brands associated with industries that are not always viewed favorably by society, such as cannabis, alcohol, or gambling,” among others.
Joanie Connell, PhD, president of Flexible Work Solutions in San Diego, frequently consults with technology companies, and her ethical alarm bells sounded when she began working with leaders at a startup that was developing algorithms for hiring tools. These artificial intelligence techniques often use candidate information in résumés, interview transcripts, or other electronic data to predict job performance, and she was concerned about privacy and fairness issues related to the tool. “As psychologists, are we complicit by not speaking up in these situations?” she said. Connell started asking general questions during coaching sessions to help the client understand the ethical risks, and she asked if they had considered hiring an industrial and organizational psychologist to test the validity of the tool.
Knowing the limits
Consultants should also be willing to examine the fairness of their own assessment tools. Randy White, PhD, a partner at Executive Development Group based in North Carolina, noticed that scores for certain aspects of emotional intelligence were consistently low for employees in some foreign countries. “The assessment data was at odds with the cultural norm, which valued being reserved and contained,” he said. He realized the instrument was not serving the client, so he stopped using it in that context.
Lowman also started to question the fairness of Western leadership coaching tools when he was working in developing countries. In assessing clients who were commuting several hours each day on multiple forms of transportation to get to and from work, the “Western expectations of work until you drop were not appropriate,” he said. “The value of family is very high in some of these countries, so I adapted my coaching tools to take this into account.”
Psychologists who are willing to question their assessments will not only protect the integrity of their businesses but also allow them to recognize when they may not be qualified to work with a client. If an organization is seeking leadership coaching for an executive or team dealing with substance use or equity, diversity, and inclusion issues, White refers them to colleagues who specialize in these areas. “If a leader is openly racist or involved in gender discrimination, then I explain that I have not been trained in those areas,” White said. “Good consulting psychologists are constantly up against their limits, and they need self-awareness of their capabilities.”
Careful collaboration
The risk of an ethical conundrum can also increase when consultants rely on a team of people—which could include a project manager or other consultants with specialized expertise—to tackle a job. Sweigart urges any lead psychologist to create an agreement describing each party’s role and responsibilities, how people will be paid, and how a dispute between team members will be resolved. These agreements can be as informal as an email or as formal as a contract drafted by an attorney. “You need this framework to address issues when things do not go as planned,” she said.
For Riddle, things did not go as planned when someone on his team included information on a report that allowed one of the employees who shared negative feedback about a leader to be identified. “I talked to all of the parties involved with the client and I took the heat for the mistake,” he said. Now he carefully trains each member of his team on how to report information and maintain ethical boundaries.
Payment considerations
Sweigart also encourages consulting psychologists to protect themselves from tax liability by learning the rules in the states where they are working. Regulations in each state dictate how many hours of work are allowed before consultants must pay income taxes. If a consultant will be required to pay income taxes in a nonresidence state, consider negotiating to reduce the amount of time on-site or structure the payment to compensate for the additional taxes, she said. Also, invest in professional liability insurance to cover the cost of potential litigation. In recent years, clients have started asking consulting psychologists to present proof of cybersecurity liability insurance because of the sensitive employee and company data they receive and store during an engagement.
To avoid conflicts of interest, Sweigart will not consult in organizations that employ anyone she knows personally or that are direct competitors of current or former clients. For the same reason, White never invests in client companies, and he will not accept equity as part of his payment.
Although it takes time to learn about the potential ethical pitfalls of consulting psychology and how to steer clear of them, Lowman has seen the consequences of poor risk management. He’s heard several stories over the years about executives who were terminated after receiving negative feedback during a coaching engagement. They sued both the company and the psychology consultants.
“In most cases, the plaintiffs did not prevail, but the time, trouble, and anxiety created by the situations were considerable,” Lowman said. “By addressing the what-ifs in advance, most of these difficult situations can be avoided.”
