We are living in an era of great distrust and even despair. Only 18% of the public trusts big business, which is second from the bottom of Gallup’s “Confidence in Institutions” survey in June, 2016. Only Congress has a worse rating at 6%. The military has the highest rating at 73%. What will it take to restore a high level of trust in business? In 2 words: Ethical Leadership. This does not mean just that individual leaders are ethical, but that ethical leaders create cultures that are ethical—where ethical conduct is at the core of behavior of every individual in the business.
An Ethical Leadership Culture
An “ethical leadership culture” is a work environment that is governed by principle, rather than power, politics or personalities. It means that:
- There is an articulated set of principles that are understood and owned by everyone in the organization
- The behavior of leadership is consistent with those principles; that they model the way for the rest of the organization
- Ethical, principle-based behavior is expected of everyone in the workforce—not just when it is convenient, but more importantly when the going gets difficult
- Compensation, feedback, performance reviews, mentoring, and coaching all reflect this set of principles, and that there are consequences for those who do not adhere
It is not enough to just have an ethical code that is posted on the wall. It has to live in the conduct of everyone in the organization daily.
7 Principles of an Ethical Leadership Culture
Principles withstand the test of time. The following 7 Principles have been developed over the last forty years, and have been tested and embraced in a wide range of businesses on five continents—they represent the best of many cultures:
- Ownership: People take care of what they own; there is a commitment to others owning the direction of the organization, its work practices, and their jobs
- Alignment: Everyone is headed in the same direction; leadership inspires others, takes a strategic perspective, and engages everyone on the organization’s vision, mission, and strategy
- Full Responsibility: People are fully responsible for the success of organization and each other
- Self-Accountability: Rather than “asking for forgiveness”, people are self-accountable for, and own up to, their behavior as well as business results
- Mutual Respect: Everyone’s self-esteem matters, regardless of who they are; there is respect for diversity, and a focus on respectful behavior that builds high self-esteem in everyone, at every level of the organization
- Integrity: Leadership walks the talk and ensures that everyone else does
- Trust: There is a focus on being trust-worthy; fear is rejected as a way to motivate; there is transparency in business practices
An ethical leadership culture not only ensures there will be a high level of trust across the board, but it creates an environment that is fit for the human spirit, where people can be their best selves.
*Dr. Marshall is an Adjunct Professor of Management at the Fuqua School of Business, Duke University; he is an award-winning consultant and author, and Managing Partner of The Marshall Group, LLC. You can contact him at: firstname.lastname@example.org or 919.265.961