RAISING THE BAR ON ETHICAL LEADERSHIP

Bradwell Mhonderwa Business Ethics Centre

US Embassy FFT, 2 Sept 2014

“Show me an organization with integrity and I will show you unstoppable success” – Bill Gates

ETHICAL LEADERSHIP=INTEGRITY=SUCCESS

Ethical Leadership

Integrity

Success

DISCUSSION OBJECTIVES

• Define Ethical Leadership • Identify values that inform Ethical Leadership • Understand the role of leaders in shaping

employee behavior • Attributes of ethical leaders • Traits of unethical leaders • Processes for managing ethics in an

organization • Benefits of empowered ethics

DEFINITION

Ethical leadership is leadership that is involved in leading in a manner that respects the rights and dignity of others. Leaders who are ethical demonstrate a level of integrity that stimulates leader trustworthy which is important for followers to accept the vision of the leader. - Wikipedia

VALUES THAT INFORM ETHICAL LEADERSHIP

• Honesty-truthful, trustworthy, forthright • Fairness-decisions, personnel issues, stakeholder

interests • Citizenship- compliance with laws, industry rules

& regulations, company policies & procedures • Loyalty-avoid conflict of interest, insider trading,

divulging company secrets for personal gain • Humility- relationships, engaging, involving,

Responsibility- sound decision making, disclosure of material information/integrated reporting, CSR, ethics and governance issues/board composition/board training/leadership renewal.

Agenda Item : Directors Retirement Age discussion and decision...

ROLE OF LEADERS IN SHAPING EMPLOYEE BEHAVIOR

• Tone at the top sets the ethics agenda • NBES report of 2009, by Ethics Resource

Center in the US • Moral psychologists agree on

exemplifying behavior • Professor Linda Trevino’s social learning

and social exchange perspectives

ATTRIBUTES OF ETHICAL LEADERS

• Take ethics seriously and model ethical behavior

• people oriented: use their power to save stakeholder interests not personal interests

• inspirational in nature • Acknowledge/own up to mistakes, including

apologizing. Example: Marcus Agius, former Barclays Chairman

TRAITS OF UNETHICAL LEADERS

• Pride • Arrogance • Egoistic • Deceptive

Example: Bernie Ebbers and Ken Lay, former CEOs of WorldCom and Enron

LEVELS OF MISCONDUCT IN DIFFERENT ORGANIZATIONS

BUSINESS ETHICS EVOLUTION(GLOBAL TRENDS)

Unethical mode

1st generation

ethics

2nd generation

ethics

EXISTING BUSINESS ENVIRONMENT IN THE COUNTRY

• A high levels of unethical business practices • Predatory pricing of goods/services • Poor regulatory frameworks, • Focus on short-term gains at the expense of

long term growth, • High consumptive tendencies at the expense

of productivity, • Rent seeking and state capture • Manifest corporate greed.

CORPORATE GREED

ISAIAH 59:14-15

“So justice is driven back, and righteousness stands at a distance; truth has stumbled in the streets, honesty cannot enter. Truth is nowhere to be found, and whoever shuns evil becomes a prey”. Source: Revised International Version

ORGANIZATIONS NEED CHANGE

• It can no longer be business as usual • Need for empowered ethics • Going beyond the simplistic view/naïve belief • Ethics anchored on measured leadership

commitment • Ethics manned by Ethics Officers with

requisite training • Ethics revolution

MAHATMA GANDHI

“We must be the change we wish

to see in the world.”

MARTIN LUTHER KING (JNR)

“Our lives begin to end the day we

choose to be silent about things that

matter”.

COMMITTED LEADERSHIP

•Ethics agenda

EMBED EMPOWERED ETHICS IN BUSINESS PROCESSES

• Report, investigate, reward, punish

• Outcomes, processes, evaluation tools

• Implement ethics processes

• Examine level of ethics risk

DEFINE PREVENT

DETECT EVALUATE

HIGH PERFORMING ORGANIZATION

ETHICAL LEADERSHIP

• Sound strategies

• Robust systems

• Technical competence

• Empowered ethics

BENEFITS OF ETHICAL LEADERSHIP

• Competitive advantage • Increased productivity • Enhanced reputation • Community goodwill • Attract/retain competent staff • Access capital/cheap credit • International respect • Sustained long-term growth

CONCLUSION

Ethical leadership anchors business performance. Like salt in water, it infuses ethics in businesses and communities. Ethical leadership must inform the conduct of every leader in business and every other sector of the economy. If organizations want to have employees who practice ethical behavior, leaders must model ethical behavior and embed strong ethics in their operations.

THANK YOU.