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Why Rationalizing Short-Term Decisions Undermines Trust, Governance, and Long-Term Value
New Jersey, US, 12th January 2026, ZEX PR WIRE, In a new leadership commentary, executive strategist Frank Okunak is challenging a widely accepted but rarely discussed practice inside many organizations: the use of plausible deniability to rationalize decisions that leaders know are ethically questionable, financially misleading, or strategically shortsighted.
According to Okunak, plausible deniability often emerges not through overt misconduct, but through quiet justification. “It shows up when executives tell themselves, ‘We’ll fix it next quarter,’ or ‘This lifts the bonus plan now and we’ll true it up later,’” he explains. “The problem is that intent matters just as much as mechanics.”
Drawing on decades of experience across finance, operations, and corporate governance, Okunak describes a pattern in which leaders knowingly take actions that distort performance in the short term while relying on future adjustments to offset the impact. Common examples include manipulating accruals to meet quarterly targets, signing representation letters while aware of aggressive accounting treatments, or parking intercompany balances on the balance sheet until results improve.
“These decisions are often technically defensible in isolation,” Okunak notes. “But when taken together, they represent a breakdown in accountability. Leaders may not say the words out loud, but they understand exactly what they are doing.”
Okunak also points to extraordinary events such as the COVID-19 pandemic as moments when plausible deniability becomes especially tempting. “Crisis creates cover,” he says. “It allows organizations to bundle legitimate write-offs with unrelated management mistakes, inefficiencies, or bad decisions, all under the umbrella of an external event. Over time, that erodes transparency and trust.”
At the center of Okunak’s critique is the gap between formal compliance and ethical responsibility. He argues that many executives hide behind process, delegation, or technical standards to avoid confronting the intent behind their decisions. “Signing a representation letter while knowing the numbers were engineered to hit a target is not a process failure,” he says. “It’s a leadership failure.”
Okunak emphasizes that plausible deniability is dangerous precisely because it feels reasonable at the moment. Bonuses, incentive plans, market expectations, and investor pressure all contribute to a culture where short-term outcomes are rewarded and long-term consequences are deferred.
“Organizations don’t lose credibility overnight,” Okunak explains. “They lose it one rationalized decision at a time.”
The commentary calls for a renewed focus on moral clarity in executive decision-making particularly in finance, accounting, and performance management. Okunak urges boards, audit committees, and senior leaders to look beyond technical compliance and ask harder questions about intent, timing, and transparency.
“Good governance isn’t just about whether something can be justified,” he says. “It’s about whether it should be done at all.”
Okunak believes that addressing plausible deniability head-on is essential for restoring trust in corporate leadership. Organizations that fail to confront these gray zones, he warns, risk not only reputational damage but long-term strategic fragility.
“Leadership is tested not when the numbers are easy,” Okunak concludes, “but when pressure tempts you to explain away what you already know is wrong.” I have made mistakes and bad decisions along the way but I find it funny or let’s just say hypocritical that so many Executives point fingers and call out others when three fingers are pointing back at them.
About Frank Okunak
Frank Okunak is an executive strategist with decades of experience in finance, operations, and organizational leadership. He advises companies and senior leaders on governance, accountability, and long-term value creation, with a focus on aligning strategy, ethics, and performance.
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Endowment Lock journalist was involved in the writing and production of this article.