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What makes for an Ethical Leader?

Leadership Styles and Ethical Behavior

Warren Bennis, who is widely regarded as a pioneer of the contemporary field of Leadership Studies, once said: “The most dangerous leadership myth is that leaders are born -- that there is a genetic factor to leadership. This myth asserts that people simply either have certain charismatic qualities or not. Bennis believed that was nonsense and that in fact, the opposite is true. Leaders are made rather than born.”

So what makes for a good leader? It starts with an ability to articulate a vision that others buy into. Then, a series of guiding principles should be developed that encourages people to take action consistent with that vision.

According to McKinsey & Company, over 90 percent of CEOs are already planning to increase investment in leadership development because they see it as the single most important human-capital issue their organizations face. McKinsey research has consistently shown that good leadership is a critical part of organizational health, which is an important driver of shareholder returns.

A big, unresolved issue is what sort of leadership behavior organizations should encourage. Is leadership so contextual that it defies standard definitions or development approaches? Should companies now concentrate their efforts on priorities such as role modeling, making decisions quickly, defining visions, and shaping leaders who are good at adapting? Should they stress the virtues of enthusiastic communication? In the absence of any academic or practitioner consensus on the answers, leadership-development programs address an extraordinary range of issues, which may help explain why only 43 percent of CEOs are confident that their training investments will bear fruit.

McKinsey’s research suggests that a small subset of leadership skills closely correlates with leadership success, particularly among front-line leaders. The company came up with a comprehensive list of 20 distinct leadership traits and surveyed 189,000 people in 81 diverse organizations around the world to assess how frequently certain kinds of leadership behavior are applied within their organizations. They divided the sample into organizations whose leadership performance was strong (the top quartile of leadership effectiveness as measured by McKinsey’s Organizational Health Index) and those that were weak (bottom quartile).

McKinsey found that leaders in organizations with high-quality leadership teams typically displayed 4 of the 20 possible types of behavior. Four kinds of behavior account for 89 percent of leadership effectiveness.

  • Solving problems effectively.

  • Operating with a strong results orientation.

  • Seeking different perspectives.

  • Supporting others

Underlying all leadership characteristics is the need for a strong sense of ethics – right and wrong – to help those in the organization that look for moral guidance when difficult issues arise or workplace conflicts occur.

Here are some tips for leaders to set the right “tone at the top” and foster ethical making ethical decisions in the workplace.

  1. Consider how your actions affect others. All decisions have stakeholder effects and ethical people consider how those parties will be affected if I they decide to do one thing or another.

  2. Do no harm. Your actions and decisions should never harm another party. One exception is whistle-blowing where the greater good may dictate that a decision-maker should report wrongdoing whenever the action of one party harms others (i.e., investors and creditors). A good example is fraudulent financial statements where, under certain circumstances, the accountant or auditor should blow the whistle on fraud by contacting the SEC.

  3. Make decisions that are universal. That is, ask yourself whether you would want others to resolve the conflict by taking the same action you are about to take for similar reasons in similar situations. If the answer is ‘yes,’ then your actions have universal appeal. Universality requires that your decisions respect the rights of others.

  4. Reflect before deciding. As a final step, think about how you would feel if your actions and decisions appear on the front pages of a newspaper. Would you be proud to defend them; explain them to loved ones; follow-up with ethical behavior in the workplace?

Virtue ethics is an excellent tool of ethical decision-making. In the real world no matter how “good” an individual wants to be, in the workplace competing forces come into play such as loyalty to one’s supervisor or the organization and doing the right thing. It takes a person of courage – integrity – to place the good of others (i.e., public interest) ahead of one’s own self-interest and that of one's employer. Virtue ethics recognizes that the person must be honest, trustworthy, fair-minded, act with compassion, act responsibility and accept the consequences of one’s actions.

Warren Bennis put it best years ago when he said: " Managers do things right. Leaders do the right thing."

Blog posted by Dr. Steven Mintz, aka Ethics Sage, on April 21, 2015. Professor Mintz is on the faculty of the Orfalea College of Business at Cal Poly San Luis Obispo. He also blogs at:

04/21/2015 in Accounting ethical standards, Business ethics, Ethical business practices, Workplace ethics | Permalink | Comments (0)

Tags: business ethics, ethical leadership, ethics sage, leadership development, leadership studies, leadership styles, McKinsey & Co, Steven Mintz, Warren Bennis, workplace ethics

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