The number of coaching cases and coaches has increased dramatically over the last several years. There are many reasons for this increase. When well done, coaching efforts can result in both improvement in the organization and in organizational outcomes as well as in individuals and groups.

Even the most highly qualified coaches and best of managers, however, can find themselves involved in situations that create either ethical dilemmas or legal challenges. Unless these situations are prepared for and addressed properly in advance, the effectiveness of the effort is likely to be compromised. This situation can also lead to decreased trust of both coaches and managers. At the worst, it can harm both the individual and the organization.

Managers and coaches alike should remember that, at a minimum, their efforts should result in no harm. Disciplined assessment processes and contracting procedures that take place prior to the beginning of coaching and that include all those involved in supporting the case (e.g., coach, coaching candidate, HR, manager) can help prevent or minimize potential negative outcomes.
In general, potential ethical and legal issues fall into four categories.

  1. Diagnostic: A frequent practice is to refer to coaching efforts as developmental even when their true focus is on addressing performance, lack-of-fit, or dyad, team and other types of organizational dynamics issues. As a result, important issues may be inappropriately presented or not identified for the coach and/or to the coachee. This practice can result from ignorance, from being naive or from a desire to present the coaching experience in the most positive light. Even when the individual is the most appropriate person to focus on, underlying clinical issues can render coaching an ineffective and inappropriate solution. Companies that effectively use coaching base their coaching program on disciplined assessments that take place prior to determining intervention objectives and steps. These assessments include a clear determination of the person, his or her readiness for change and openness to feedback, the context in which the person works, including the organizations readiness to support change, and the viability of objectives.
  2. Confidentiality: Trust is a critical component of successful coaching efforts. Coaches and organizations, alike, inappropriately often promise full confidentiality to their coaching candidates. Coaching in organizations is typically not bound by the same conditions of confidentiality that can be found in personal coaching (when the coaching is paid for by the individual) or in clinician-patient relationships (e.g., those that occur in clinical practice or EAP relationships with companies). As in therapeutic relationships, coaches need to report potential threats to individuals (self or other) or organizations. Coaches are, however, also agents of their hiring organizations. As such, they can be called to be witnesses if a lawsuit arises. Importantly, in cases that involve more than the individual, individual confidentiality needs can be overestimated so that all those involved in the coaching effort cannot benefit from the insight gained. Negotiated levels of confidentiality where parameters for handling of information by both coaches and participants are clearly spelled out and agreed to prior to coaching can help ensure trust and more effective outcomes.
  3. Dependency: The best coaching relationships occur when there is a spirit of trust and a certain level of dependency is created between the coachee and his or her coach. However, support needs as well as the desire to learn more about oneself can promote continuation of coaching efforts indefinitely by coaches. In addition, even well trained coaches are motivated to continue relationships beyond full usefulness. In general, the coaching relationship in organizations should not continue beyond achievement of specific objectives, unless other business objectives have been identified. As the professional, it is incumbent upon the coach to help create the environment to gradually ease the coachee into independence and help him or her develop alternatives for support other than the coach. Managers should query potential coaches about their approaches for handling stages of coaching efforts and their eventual termination.
  4. Boundary: In some ways, coaching inside organizations is often like working inside a highly complex and very large family. It can never be done in isolation of other people or the organization at large. Activities and changes that occur in any individual or group can quickly affect others. In addition, without a firm understanding and strong foundation in dealing with these dynamics, the coach unwittingly can become part of system he or she is trying to help, with potentially negative consequences. Companies that use coaches effectively engage in and agree upon parameters regarding areas of potential conflict of interest. These include (a) a clear definition of the primary client as well as the hierarchy of potential clients and stakeholders and the coaches role relative to them, (b) a clear definition of objectives, goals, and timetables, (c) boundaries for coaching multiple levels in the organization as individual coaching cases, especially when there are direct reporting relationships, (d) a clear distinction between coaching and therapy, (e) standards for handling of internal information both inside and outside the organization, and (f) policies and procedures for selling by coaches to other potential coaching candidates or managers inside the organization.

Source: Society for Industrial and Organization Psychology,