Ethics
Ethics and Integrity are undoubtedly the foundations of great leadership. Over the years, the media has been littered with examples of leaders and individuals who put profit and self-interest ahead of what was right. There are far too many modern examples where leaders compromised their integrity and breached their ethical obligations.
Related to follower willingness or conviction is the concept that leadership has a moral or ethical component. Followers see the difference between striving for a goal that they believe to be ethically sound and one that is ethically or morally wrong. This distinction is made to differentiate between those leaders that are influential and visionary but morally or ethically corrupt and those that are equally influential and visionary but morally and ethically sound.
Leader Responsibilities
It is necessary for leaders to have more than just an academic appreciation of ethics. Leaders require an understanding of how ethics influence their decision-making and actions. Leaders have specific responsibilities that relate to the individuals and the teams they lead. There are three fundamental ethical responsibilities that leaders are required to discharge. These are:
- Serve as role models worthy of emulation.
- Promote ethical development for followers.
- Develop and sustain an ethical climate within the group that they lead.
Case Studies
Enron. One of the best-known examples of unethical behaviour is the 2001 Enron scandal where senior executives deceived clients and shareholders by hiding billions of dollars of losses and debt and coerced their auditors Arthur Andersen into ignoring and hiding the issues. Enron was ultimately caught and forced to file for bankruptcy and Arthur Andersen, then one of the largest and most respected auditing companies in the world, folded. Several Enron senior executives received jail sentences but despite Enron’s billions of dollars of assets, many investors’ pensions and livelihoods were lost by the actions of greedy, unethical, and morally bankrupt executives.
Wells Fargo. In 2016, Wells Fargo, one of the US’s largest and most trusted financial institutions was found to have created millions of fraudulent savings and checking accounts on behalf of their clients without their consent. Initially, senior leaders tried to distance themselves from any wrongdoing, blaming individual employees and managers; however, regulators found the fraud was due to senior leadership pressure to open as many accounts as possible and through cross-selling. The bank has been issued nearly $3Bn USD in fines and suffers ongoing reputational damage despite a pledge to reform its practices.
Despite most organisations and institutions now having strict policies on ethical behaviour and providing training at all levels, unethical behaviour continues to be an insidious problem that causes all manner of leadership challenges. But it’s not just commercial businesses that push the boundary to gain a competitive advantage. Ethical failures can occur in any organisation and at any level within the leadership and management ranks. In 2015, the then Chief of Army, LTGEN David Morrison AO, addressed the Australian Army to state his position on inclusion and his expectations of the officers and soldiers under his command. He did this because of allegations made against Officers and NCOs of misconduct and behaviour deemed inappropriate and demeaning to female ADF personnel.
“The standard you walk past is the standard you accept”
In making his stand, LTGEN Morrison may have himself crossed an ethical boundary through his treatment of some of the accused, effectively ruining their careers despite no charges being laid. It is important to apply ethics and integrity at all times and to all parties.
So how do leaders ensure they do not succumb to the allure of the quick win or belief that they can get away with unethical behaviour? What stops individuals from straying when no one is watching? Here are a few things you can do to stay the course set by your moral compass.
Know your values and live them
Nowadays, most organisations have a set of defined values. The unfortunate reality is that many organisations set these values as a means of marketing to their customers that their business is about more than just gross margins. There is little point to businesses setting corporate values if these values do not perfectly align with those of every individual member of the organisation. Besides, every client automatically expects every organisation to value honesty, integrity, trust, loyalty, and the array of other trendy values pinned to company websites everywhere. Values are nothing unless they are demonstrated through consistent behaviour. Leaders need to lead by example and exemplify the behaviour they expect of those they lead. There is real power in knowing this as you may attain compliance by mandating values but you will inspire behavioural change through inspiring junior staff to want to emulate their leaders.
Do what’s right, not what’s quick or easy
Time and cost pressure are powerful drivers and are significant influencers of behaviour. The need to be profitable and survive when times are tough will test even the most disciplined leader. This is when only the very best leaders know that crossing the ethics line is far worse than any short-term gain that may be realised by acting in an unethical manner. It is far better, to be honest, and deal with issues and problems at the time, rather than delaying them or acting inappropriately. Elron and Wells Fargo have shown the impact of crossing the line for short-term gain.
If it doesn’t feel right; do, or say something
Many times, in our lives we will encounter situations where our ethics, morals and integrity are challenged. This can be anything from schoolyard antics and trying to gain or retain your popularity amongst the “cool kids”, to peer pressure to shoplift or turn a blind eye to discrimination in the workplace. Speaking up and acting according to your values is hard and it gets harder the further you walk past the bad behaviour. There’s an old saying, “bad news doesn’t get better with age” and this is certainly true when it comes to needing to speak up. It is far easier to stop unethical behaviour at its early stages before it takes root. This is also the time when you are least implicated in the issue and therefore are less likely to suffer from being complicit. Often, the difficulty is noticing the subtle signs that something is not quite right. Hence, it’s crucial that you act as soon as you sense something seems off. At this early stage, be cautious not to be too accusatorial. A good technique is to ask lots of questions. Eventually, any corruption or unethical behaviour will surface, and you can then take action.
Choose good role models
Identifying three or four role models of unimpeachable ethics and striving to emulate their character and ethics is a great way to help keep you from straying due to pressure and local influences. Research them, think about them often, think about what they would do when faced with your challenge or ethical dilemma, and speak their names during conversations to reinforce them as important to you. Also, choose a couple of trusted mentors with who you can speak honestly and confidentially and use them as sounding boards when you have difficult circumstances to navigate or decisions to make. Generally, if you feel the need to discuss an issue with your mentors this should be a red flag that something is not ok, and your mentor should help confirm this and hopefully help you choose what to do.
Making ethical decisions
Facts and logic underpin all good decisions and decision-making processes, but it’s our moral compass and our values that guide and temper those decisions. Facts and logic alone only tell us what is; they don’t tell us what ought to be. If ethical decision making was as simple as understanding the facts and applying logic, all decisions would be black and white and solved by using the right mathematical equations. Many of the ethical dilemmas we face are multivariable problems that undermined our values, our cultural norms, and our religious beliefs and are often tainted by our biases and steered by our heuristics. There is no simple answer to the question of how to consistently make good ethical decisions. I believe all we can do is try our best to make them according to our values and, to quote Stephen Covey, “start with the end in mind”. Understand the outcome that must be achieved and anticipate any unintended consequences. It is often impossible to make a completely ethical decision, or at least from the perspective of some individuals or factions. In these cases, you should take a utilitarian approach.
Other approaches to ethical decision making include Kantian ethics, the Fairness or Justice approach, the Common-Good approach, and the Virtue or Aretaic approach.
Being of good moral character and always demonstrating good ethical behaviour and making ethical decisions are core to being a good leader. These traits will build internal and external trust and will be the pillars of your reputation. These things are precious and take much time to mature. Failing to act ethically and with integrity will destroy your reputation before your eyes and render you unable to lead; so, be warned, any momentary lapse of ethics could, and well ought to result in your downfall.
