The case for ethical leadership

People interested in the subject have the similar concern what do we mean by ethics. The one I quite like best really which is ethics begins where the law ends. It’s very much an individual process of identifying values that the individual feels and take responsibility for. If you as an individual in a company, are concerned with ethics in some form or another then you will need some set of values that really matter to you. If you’re an executive in an organisation then you want to see that people do identify with core values that match the organisation’s core values and if they don’t match, what do you do about it?

and those are some of the issues that every industry has to address. In essence, ethics are ‘doing the right thing at the right time, in the right way’. One definition I quite like is ‘doing the right thing when nobody’s looking.’ Yeah Could you describe the culture of an ethical company?

Well we can talk about companies that have spent time with the issue of culture and ethics and there are lots of companies that have long realised that they have to influence the culture and influencing the culture in a particular way so that ethics matter and different industries, different companies, have different standards so it’s not possible to generalise and say well “that’s an ethical company but that’s not” but we know that some companies are unethical. But what does an ethical leader look like? What are their characteristics? Well we know that in order to be an ethical leader you have to talk about ethics.

I did a study of some Indian ethical leaders, Indian leaders, sorry of corporations and I asked some questions like, ‘Do you ever talk about ethics?’ and they all did. Most of the successful companies that have put ethics on the map have got a willingness to explore this question. It’s not that you’ve got to have a golden set of rules but it’s ‘are you willing to talk about it?’ So we often talk about ‘tone at the top’ Yeah. You know that ‘tone at the top’ is setting an ethical culture. We also talk about ‘tone in the middle’. Do middle-managers and supervisors and people like them, do they talk about these issues? Are they concerned?

And one of the biggest questions in all of this area is ‘Do people speak up?’ ‘Are employees willing to speak up?’ And unfortunately this is an area where the answer is often ‘no’. So how does the ethical leadership and being ethical, having good ethics how does that impact on the success of a company? Actually when you look at the data it pays to be ethical. In fact it doesn’t pay not to be ethical. What you’re looking for is, you know organisations that equate quality with ethics and not leave them apart Can you give me some examples of how companies have evolved so how have they evolved into being ethical companies?

Well a lot of it’s driven by top management wanting and seeing the benefits of being ethical some of it’s driven, as it is in the financial sector by regulation. And what processes and procedures should a good ethical company have in place? Most of the big construction companies have a code of practice. How far some of them turn that into reality Some organisations try to solve it through bureaucracy producing a set of guidelines everybody in the company had better read and it ends up as a booklet this big you know 120 different things you’re supposed to do and others just have a very simple one.

There’s a famous one in America that when you join, they give you the rules of the company and you open up the book and there’s nothing in it, except for one line which says, ‘Use your judgement’. It’s trusting people it’s saying, ‘we think that you’ll do the right thing for our company’. So in the construction industry we have a lot of micro-businesses there’s a very large percentage of ten people or less. So how would you, how would you encourage and inspire them to become an ethical organisation? Where should they start with all of this? You know, if it’s focussed on quality then it will be automatically wanting to look at things like, ‘Do our customers trust us?’

‘Is our process for charging transparent?’ ‘Can you believe what we tell you?’ Some basic stuff Good entrepreneurs, good businesspeople will be really concerned about that and will understand ‘they have to do that’ and they’re the ones that will probably survive in the next five or six years against the ones that won’t do that. If they think for example they can get away with practices because they’re small and their behaviour is not good and they don’t think they’ll be caught or it won’t catch up with them but the truth is, it does catch up with them. It catches up with everybody. It’s the sure way to fail in a company to lack integrity or to have an unethical approach.

OK And just one last point. All of the evidence that I’ve been able to accumulate is that ethical companies are more profitable than unethical companies So I mean it’s a ‘no brainer’ Yeah It makes sense on every level. Yeah