We believe ethical leadership should be at the heart of all organisations. When an organisation is created it should automatically commit to behaving ethically and this commitment should be embodied by the leaders of the organisation.
The way leaders behave and interact with colleagues has always been important but today the importance of the leader, their image and their behaviour is critical. This graph shows the increase in the importance of leadership on the reputation of an organisation.
As well as the rise in the importance of leadership, the expectations about what makes a good leader have also changed. Gone are the days when getting good financial results was the only determinant of success, individual and corporate. Today’s leaders need to focus on a wider range of issues.
“Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.”
Larry Fink, Chairman and CEO, Blackrock.
The Reptrak CEO survey examines the performance of CEO’s across four dimensions, Leadership, Influence, Management and Responsibility. The most important of these is Responsibility accounting for 31.2% of the weighting. The lesson is that being responsible and behaving ethically and caring are seen as important characteristics in a CEO.
Ethical leadership is the code of values and principles a person or a group of people actively portray. The individual’s sense of ethics will impact on how they conduct not only themselves but their business persona.
While an organisation can write a code of ethics and give it to its employees, customers, client’s and relevant stakeholders the written word only holds value if the actions of the people within the business support these intentions. An organisation will only be as ethical as the people that are running it. So how the company’s leaders act and behave will characterise the ethical nature of the business.
P.S I originally wrote this short article about ethical leadership in July 2017. At the time it was largely driven by my own views I have rewritten it after seeing the 2018 CEO Reptrak study. You can watch the full video here.
If this post was useful you may like to look at these:
- Building an Ethical Business 6 tips
- Values-Based Decision Making
- 9 Steps to Ethical Decision Making
- A Business Simulation Game