Moral equilibrium is an interesting concept. The idea is that people tend to keep a running scoreboard in their heads that compares their image of themselves—usually as “good folks”—with their actions. If people do something that doesn’t live up to their normal moral standards, their mental scoreboard goes into deficit and they may actually look for good things to do (e.g., make a donation or volunteer to help a charity) to put their scoreboard back in balance. This is called moral compensation.

On the other hand, if they do something that they feel pretty good about, such as doing a stranger a big favor, their scoreboard now sports a surplus, and they may give themselves permission to (just this once) not live up to their normal ethical standards. This is called moral licensing, and it may help explain why family values politicians and mega-church ministers from time-to-time get caught with prostitutes and the like.

Related to moral licensing is the notion of moral credentialing. In one interesting study, psychologists gave some subjects the opportunity to publicly disagree with a sexist statement. Other subjects did not have that chance. Then both groups of subjects were given the opportunity to make a hiring choice and it turned out that those who had been given the opportunity to object to the sexist statement (and thereby establish their credentials as unbiased, were more likely to hire a man for a stereotypically male job than were those who had not been given the opportunity to object. They had at least in their own minds established their lack of bias, so they gave themselves leeway to be biased in the hiring decision. Another iteration of the study involving racial rather than gender discrimination produced similar results.

In another experiment, subjects who established their credentials (at least in their own minds) as good people by buying “green” products rather than regular products, later gave themselves permission to cheat in an experiment more than subjects who had not so established their mental moral credentials.

All this comes to mind because of the recent publication of a paper entitled “Do the Socially Responsible Walk the Talk?,” by professors at the Columbia Business School and the London School of Economics (Raigopal & Raghunanandan). They found that the companies that signed the August 2019 Business Roundtable (BRT) declaration that a corporation’s purpose is not just to make money for shareholders but is, instead, to create value for all stakeholders (including customers, employees, suppliers, and communities), did not “walk the talk.” As compared to within-industry peers, the signatories of the BRT declaration committed more environmental-related and labor-related rule violations and spent more on lobbying policymakers.

Now, this is just one as-yet-unpublished study, and the authors were not studying moral credentialing. So, don’t read too much into these results. On the other hand, multiple studies show that in their own personal and business lives, individuals are subject to the impact of the moral credentialing bias. And since individuals make the decisions for the artificial business entities they manage, it stands to reason that moral credentialing could impact corporate actions as well. Please keep an eye on your employer (and yourself) to ensure that your firm does not fall victim to the potential negative moral impact of moral credentialing.


We recommend that you view our Ethics Unwrapped videos on moral equilibrium: and




Jill Bradley-Geist et al., Moral Credentialing by Association: The Importance of Choice and Relationship Closeness, Personality and Social Psychology Bulletin, 36(11): 1564-1575 (2010).

Ryan P. Brown, et al., Moral Credentialing and the Rationalization of Misconduct, Ethics Behavior 21(1): 1-12 (2011).

Business Roundtable, Statement on the Purpose of a Corporation (August 2010),

Daylian Cain et al., The Dirt on Coming Clean: Perverse Effects of Disclosing Conflicts of Interest, The Journal of Legal Studies 34(1): 1-25 (2005).

Uzma Khan & Ravi Dhar, Licensing Effect in Consumer Choice, Journal of Marketing Research, 43(2): 259-266 (2006).

Maryam Kouchaki, Vicarious Moral Licensing: The Influence of Others’ Past Moral Actions on Moral Behavior, Journal of Personal Social Psychology 101(4): 702-715 (2011).

Fanny Lalot & Juan Falomir-Pichastor, Moral Credentials, Intergroup Attitudes, and Regulatory Focus Interactively Affect Support for Affirmative Action, Spanish Journal of Psychology Vol. 22 (2019).

Nina Mazar & Chen-Bo Zhong, Do Green Products Make Us Better People? Psychological Science, 21(4): 494-498 (2010).

Benoit Monin & David Miller, Moral Credentials and the Expression of Prejudice, Journal of Personality and Social Psychology, 81(1): 33-43 (2001).

Robert Prentice, Moral Equilibrium: Stock Brokers and the Limits of Disclosure, Wisconsin Law Review 2011(6): 1059-1107 (2011).

Aneesh Raghunandan & Shivaram Rajgopal, Do the Socially Responsible Walk the Talk? (2020),

Sonya Sachdeva et al., Sinning Saints and Saintly Sinners: The Paradox of Moral Self-Regulation, Psychological Science, 20(4): 523-528 (2009).