Last week, I was invited to speak on a panel at Sullivan & Cromwell LLP’s event in New York City titled “The Psychology of Culture: Why Good People do Bad Things and the Role of Corporate Culture” which was jointly offered with RANE (Risk Assistance Network + Exchange) and sponsored by Dow Jones. During my presentation as well as others throughout the day, there were many inquiries as to how does a corporation begin evolving a corporate culture from the top-down. In other words, what is Ethical Leadership?
“Ethical leadership is knowing your core values and having the courage to live them in all parts of your life in service of the common good.” The Importance of Ethical Leadership, http://www.theworkplacecoach.com March 6, 2013. In terms of leading an organization, ethical leadership would require an executive to lead in a way that might contradict the traditional philosophy of profit-making productivity. Rather, this C-Suite member would naturally respect and consider the dignity of others. It has become increasingly more and more apparent and understood that a corporation must engage a leader that will insist on an ethical transformation focused on core values, collaboration, and transparency.
Recent headlines of scandals, indictments, and crises make it all too clear that a corporation’s culture necessarily must encourage ethical vigilance in every moment. Without a commitment to integrating ethics and values into a corporate culture, the long-term sustainability of the organization is at risk. Regardless of the U.S. Federal Sentencing Guidelines’ expectations for “organizational cultures that encourage ethical conduct and compliance with the law,” Nicole Sandford, Regulatory and Operational Risk Market leader for Deloitte Risk and Financial Advisory states “[m]any regulators now realize that without a culture of integrity, organizations are likely to view their ethics and compliance programs as a set of check-the-box activities or—even worse—as a roadblock to achieving their business objectives.” Corporate Culture: The Center of Strong Ethics and Compliance.” Risk & Compliance Journal. The Wall Street Journal, November 9, 2017.
Dr. Bill Grace and the Center for Ethical Leadership (with a final addition by The Workplace Coach) devised a Model of Ethical Leadership as a “framework that aligns leaders’ internal beliefs and values with his or her external behaviors and actions for the purpose of advancing the common good.” Those that benefit include employees, leaders, organizations, and the larger local and global community. The Importance of Ethical Leadership. http://www.theworkplacecoach.com
5 Components that Advance Ethical Leadership in an Organization:
- Values – Ethical leadership begins with an understanding of and commitment to a leader’s core values. By discovering the values that make up the core of our identities and motivators, we begin the process of integrating our unique values with our choices in our personal, professional, and civic lives.
- Vision – Ethical leadership requires the ability to frame our actions within a picture of “what ought to be” – particularly in the area of service to others.
- Voice – Ethical leaders must be able to articulate their vision to others in an authentic way that enlivens them into action.
- Virtue – Ethical leaders strive to do what is right and good. They practice virtuous behavior by asking “How are my values, vision and voice in alignment with and supporting the common good?”
- Validate – increase the ethical know-how of everyone in the organization by hiring for ethics and values as well as capabilities, including ethical behavior in appraisals and firing people who fall short of ethical standards. www.ethicalleadership.org
I first met Dr. Bill Grace in 2004 when he presented to the Miami Fellows Initiative (graciously supported by The Miami Foundation), within which I was honored to have been chosen to be a member of Class III. I remember Dr. Grace discussing “safe spaces.” I had just launched my own law firm and was an entrepreneur facing the common challenges that young, ambitious professionals confront when going out on their own. I worried about how I was going to find appropriate team members, space, equipment and furniture, funding, marketing, and most of all, clients to generate revenue. The concept of corporate culture and the teachings of ethical leadership were foreign then. I failed to recognize the opportunity that was put in my lap with Dr. Grace. Had I just heeded his call….listened and applied the ethical leadership principles…perhaps my life would have taken a very different path achieving far opposite results.
But, it is not too late for all of you. Pay attention. We live in a mysterious world demanding that we all take long and good hard look at ourselves, our organizations, our families, our communities, our schools, and more. Ethical Leadership will play a monumental role as move forward.
Rashmi Airan‘s mission is to share the need for ethical vigilance and to inspire you to make good ethical choices in all areas of your life. Rashmi is an ethics speaker and consultant fighting to create a culture of conversation and bring ethical issues in business to light, to promote integrity, to enhance commitment to fiduciary duty, to build ethical leadership, and to shift the paradigm of ethics standards through ethics training.
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