Charlotte Street Partners

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VIEW FROM THE STREET

Ethical leadership: still worth the effort

Written by Paul Gray, consulting partner
15 July 2020

What is ethical leadership? There is a wide range of definitions available but generally they include principles of respect, service, honesty, justice and fairness. Ethical leaders build communities and energise, develop and support others to give their best. They value and celebrate the successes of others and make space and time for colleagues to shine. Some may prefer to call it values based leadership – and indeed I would argue that leadership without values is leadership without value. One very simple definition is: ethical leaders do the right thing even when nobody will ever know.

There is a risk, though, that ethical leadership can be taken to mean things that it does not. It would be quite wrong to suggest that public service or voluntary work are somehow inherently ethical and private enterprise and profit making are not. The issue of ethics also comes into political discourse. It is easy to dismiss a political opponent or a political ideology as unethical, when in fact what I mean is that I do not agree with them or it.

That is not to say that all contexts and all ideologies are ethical. And anyone – regardless of context or ideology – who plays the game of comparing wrongdoing of one group with another in order to justify their own as lesser or in some way excusable, is not going to be very interested in ethical leadership.

Whether in business, politics, volunteering or public service, there are some red lines. There are things which society at large agrees are unacceptable; generally (but not always) it signals this by making them illegal. Discrimination, dishonesty, fraud, theft, genocide, cheating, hate crime, abuse: this is by no means an exhaustive list, but it gives a sense that some things cannot have any place in an ethical framework.

It is worth reflecting on the fact that the list is not constant. We need not look too far back in history to find a time when things that are now illegal were enshrined in statute, or endorsed by states and governments as legal. Rosa Parks spoke more powerfully on that subject than I ever could.

This raises an important balancing issue, namely that just because a legislature has a law in place, that does not mean in and of itself that it is ethical or just. Values do matter.

Ethical leadership is neither easy nor straightforward. It requires a clear set of values – and, crucially, a determination to adhere to them even when it might be difficult to do so – and a willingness to engage and to be challenged. It draws on a range of views, and respects perspectives and experiences. It accepts sacrifice in service of the common good. It shares power rather than hoards it. It recognises that more is achieved by collective endeavour than by individual effort alone.

But is it still worth the effort? There are examples throughout history – and plenty of current ones as well – of people and organisations and nations who succeeded by greater force, or by subterfuge, or by appropriating what belonged to others, or just by plain old-fashioned dishonesty and cheating.

It rather depends on your definition of success. If success is being first, being richest, being better, having more, whatever the cost to others, then ethical leadership will not be on your radar, except to the extent that it is annoying and might represent a hurdle to your objectives.

That said, there is nothing intrinsically wrong with being first, being rich, being better or having more. Competition can be healthy, and ambition and desire for improvement have their place.

The Beveridge Report of 1942 was the foundation of the welfare state, a profoundly ethical set of propositions developed during a time of war. It was ambitious, radical and far-sighted, and destined to change the fabric of society and the health of nations. But in order to be better and have more, those who could afford to also had to give more.

We should also look back on people and organisations who apparently succeeded at the time, but later events proved otherwise. For instance, individuals who won sporting medals as a result of drug enhanced performances have since been stripped of their awards.

The Sarbanes-Oxley Act of 2002 was enacted in the United States in response to a number of major accounting scandals, including Enron and WorldCom. It sets out responsibilities of a public corporation’s board of directors, adds criminal penalties for certain misconduct, and prohibits the wilful destruction of evidence to impede a federal investigation. Bernie Madoff was sentenced to 170 years in prison for operating the largest private Ponzi scheme in history. Nick Leeson, the rogue trader with Barings bank, was sentenced to six-and-a-half years in prison for his unauthorised financial transactions.

The wheels of justice may grind slowly, but grind they do.

So, if ethical leadership matters, how can you tell if it is being practised, as opposed to being discussed?  I find these questions helpful:

  • What are your core values?
  • How are they expressed?
  • How does your organisation and your board tell whether and how your values are being implemented?
  • What do you do if they are not?
  • Could your people describe what the values mean for them?
  • What decisions can you point to that speak to your values as an organisation?
  • What examples of ethical leadership do you celebrate?

Because surely we can do better than the argument that it is only wise to practise ethical leadership for fear of getting caught and being punished. The real benefit of ethical leadership is that it is most likely to produce sustainable outcomes, because it is designed to be of benefit to the greatest number of people. That in itself is a good definition of success.

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