Leadership ethics: Providing certainty in an uncertain world

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Written by Amrit Sandhar on 9 September 2020 in Opinion
Opinion

As remote working distances the individual from organisational ethics Amrit Sandhar urges leaders to model the organisations’ values and culture.

No organisation would ever think of throwing out their organisational values, but maybe this should be a consideration when we examine the role they often play in creating ethical cultures.

Values are clearly there to ensure everyone working for the organisation has a clear understanding of how things get done, what the organisation stands for, and an indication of the culture for anyone new, looking to join.

But herein lies the issue: we’ve all worked for organisations, where we’ve witnessed many examples of behaviours, often from leaders, which are far from being aligned to the organisation’s values, and often contrary to them.

Why then do organisations keep insisting on company values?

As recently as 2019, the Business Roundtable group made up of over 200 organisations, from AMEX, Amazon and Apple, to Deloitte, PepsiCo and Walmart, issued a statement committing to investing in employees, dealing fairly and ethically with suppliers, respecting communities and protecting the environment – corporations coming together to state their shared values.

Research suggests that even well-meaning and well-informed people are more ethically malleable than one might guess

Organisational values play a critical role in the creation of ethical cultures, and that’s important. Rather than doing away with company values, we need to understand why employees at all levels can fail to adhere to them, resulting in people left bemused as to their value.

According to Epley and Kumar in their 2019 HBR article, “Unethical behaviour takes a significant toll on organizations by damaging reputations, harming employee morale, and increasing regulatory costs – not to mention the wider damage to society’s overall trust in business”.

There are two ideologies of ethical leadership: relativism and idealism (or universalists). Within relativism, the extent to which an individual would demonstrate their moral principles and behaviours is driven from the situation.

This means some principles may be sacrificed for others that are deemed more important for a given situation, leading to a perception of leaders as behaving inconsistently. While universalists believe the application of consistent ethical rules should be absolute, irrespective of the situation.

When we observe leaders, we might see an inconsistent approach to ethics which may leave people questioning a leader’s moral compass. But the very essence of ethical leadership relies on personal judgement to a given situation.

While many situations might cause ethical dilemmas, what can support leaders in making an informed decision? This is the critical role of values. By having explicit values, this can reduce the risk of people being malleable or making decisions that cross ethical lines.

Epley and Kumar explain in their HBR article how “a large body of behavioural science research suggests that even well-meaning and well-informed people are more ethically malleable than one might guess”. This again supports the argument for having clear values and supporting policies.

 

However, having clear values alone, is not enough. Merete Wedell-Wedellsborg in her 2019 HBR article shares three psychological dynamics that lead to crossing of ethical lines: leaders feeling ‘omnipotent’ – all powerful where the rules of acceptable behaviour don’t apply to them, an organisation experiencing ‘cultural numbness’ – where there is a general acceptance of deviant norms, and ‘justified neglect’ – making conscious decisions not to speak up for personal security or gain.

It’s important that organisations create an open culture where people feel comfortable to tell leaders the truth, to call out what they see, and to challenge without fear of reprisals. This creates the checks and balances needed to ensure leaders do not wield absolute power.

Have regular checks across the organisation of whether employees would chase a reward or do the right thing. Encourage leaders to reflect on past decisions, to question whether they made the right ethical decisions and what they could have done differently. Surveying suppliers on the behaviours they are subjected to, can also identify issues with a lack of ethical alignment.

How do leaders influence an organisational culture with growing numbers of remote workers? An ethical culture guides what one would do when no one is watching – now no one can watch.  The reputations of organisations are in the hands of people working remotely, who are less likely to be challenged on how they behave.

The most anyone might see is the behaviour on a video call, conference call or email. It might be easy to dismiss people being rude via email, or demonstrating behaviours on video calls, that would have been unacceptable in a work setting, as working from home can provide a layer of detachment from these instances.

Now, more than ever, leaders need to demonstrate the values of an organisation, lead by example, and encourage the challenging of behaviours at every level, where these behaviours are not aligned to the organisation’s values.

Ethics is focused on dealing with moral duty and obligation and incorporates honesty, fairness, equality, dignity, diversity, and individual rights. Leadership is being in a position or office and having the capacity to lead.

Therefore, when we look at leadership ethics, we’re examining how leaders can lead from a standing of moral duty, upholding universal values, but more importantly, the values specific to an organisation. Being a leader is a responsible position and it’s important that organisations make leaders aware of their ethical and moral obligations both at the start of their leadership journey and throughout.

Leaders in the finance sector have been reminded of their ethical and legal responsibilities through SMCR regulations, setting standards in personal conduct. Ethics should be seen as important as legal considerations, aspects of the business that cannot be open to question or abuse.

Only then, can we create cultures where everyone is clear about the standards of behaviour, the way things get done, and the positive impact the organisation will play in the engagement, growth and development of employees, the fair and ethical ways it deals with suppliers and partners, and the positive impact on the communities they are based in.

 

About the author

Amrit Sandhar is founder of The Engagement Coach

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