The Ethical Leader
In April, we published a highly successful article on The New and Emerging Post-Pandemic Leadership Model, which explored in brief the concept of ethical leadership as championed by Tracey Groves, CEO & Founder of Intelligent Ethics. In this article, we got Tracey to elaborate in more detail what ethical leadership entails and how businesses can benefit from implementing ethics into their leadership models.
Adam: Tracey, from your experience, what does it take to be an ethical leader? What are the differences between being a good leader and being an ethical leader?
Tracey: Experience tells us that, in a world of heightened uncertainty and unpredictability, leaders and managers who are seeking to be ethical should follow the social mores of honesty, trustworthiness and integrity. But is that enough and, if not, what else does it take to be an ethical leader?
Ethical or moral leadership can be defined as rooted in and guided by a moral framework and set of principles that inform how leaders approach everything they do: how they interact with others, how they make choices, how they manage and conduct themselves.
But you could argue that these characteristics described above are what constitutes good leadership, as opposed to ethical leadership. Admittedly, these attributes are not easy to deliver on a consistent basis, but nevertheless you could say that this is the standard of leadership that we have come to expect of leaders in our world today. Therefore, to be ethical leaders and not just good leaders, there is a growing view that leaders should also focus on creating the most value for society, confronting and overcoming the cognitive barriers that prevent them from being as ethical as they would like to be, such as motivated or wilful blindness. Leaders who care about the value they create can influence others throughout the organization by means of the norms, working conditions and decision-making environment that they create. Max Bazerman, author of Blind Spots: Why We Fail to Do What's Right and What to Do about It, describes the value created by ethical leadership as ‘maximizing aggregate well-being and minimizing aggregate pain, goals that are helped by pursuing efficiency in decision-making, reaching moral decisions without regard for self-interest, and avoiding tribal behaviour’.
In practice this means leaders must act as the role models of ethical value creation, for example by prioritizing the health and well-being of a wide range of stakeholders (e.g. employees, customers and suppliers); mitigating harm and unnecessary risk through good governance, effective consequence management and values-based decision-making; and embracing inclusion and diversity as critical business tools to unlock better performance. The ethical imperative is for leaders to no longer do the next things right – after all these are tasks that are easily transferred to machines – but rather to do the next right things.
Adam: We spoke last time about the importance of ethical leadership, why is it important and has the global pandemic catalysed its importance?
Tracey: The global pandemic has challenged leaders to go beyond what they should be doing to what they could be doing. The roles of corporate purpose, i.e., why we exist as an organisation, and what we prioritise, i.e., our values and desired behaviours, have never been so critical in helping leaders to navigate the uncertainty that the pandemic has created. Therefore, now more than ever, the ability to demonstrate ethical leadership through the building of moral muscle, inspiring and elevating others, activating a shared purpose to lead the way, and being passionate about hardwiring values into business operations, is so vital as a moral anchor.
In the early stages of the pandemic, in May 2020, the FT reported, ‘executives will be judged on whether they ‘do the right’ thing during pandemic’ and many instances have followed where this has been borne out. Examples include whether to pay back government funding earned through the furlough scheme once profitability has been restored earlier than anticipated, protecting, and safeguarding the health of employees in a workplace where high rates of coronavirus infection existed, or the use of inappropriate behaviour and/or language by leaders in front of others.
Leaders need to be able to find the right balance in difficult and changing circumstances. An ethical framework for making better choices and dealing with trade-offs is paramount for enabling better outcomes. Predictions and forecasts cannot give us comfort in an uncertain world; only our human capacity to apply our beliefs and values, and to integrate our whole ethical self through the decisions we make, can do so.
Adam: What can organisations and individuals do to overcome the gap between “saying” and “doing” the right thing?
Tracey: Where there is a disconnect between what we say and what we do as business leaders, there is fertile ground for fear, anxiety, and mistrust to breed. To be trusted, leaders need to be trustworthy, and this means doing what you say with honesty, competence and reliability. When we refer to the so-called ‘say-do’ gap, we are actually referring to an absence of integrity and where leadership tolerates poor conduct and behaviour that sets the norm. The standard of behaviour you walk by as a leader is the level of behaviour that you stand for. It takes literally just a second to shatter a sense of shared belief and the espoused values of the organisation through your complicitous action of ignoring a violation of values and behavioural standards, with the potential for significant unintended consequences.
This is not just about leaders making their own behaviour more ethical by closing the ‘say-do’ gap, for example, through increased accountability, holding themselves responsible for their actions and the impact of their decisions. Because they are responsible for the decisions of others as well as their own, leaders can dramatically multiply the amount of good they do by encouraging others to be better – the multiplier effect. The norms you set as a leader, the behaviours you tolerate, and the decision-making environment that you build, create more value by the action of others following your behaviour and your standards. Leaders often underestimate their power through the alignment of what they say, what they do and how they make others feel, stemming from a deep belief that we can all aspire to do the next right thing and for us all - the environment, wider stakeholders, and business – to be better off for it.
Who is not inspired by that as a leadership model to aim for?
If you would like further information on ethical leadership, or you would like the chance to ask a question directly to Tracey, please contact Adam Gates for details on how you can attend our upcoming webinar with Tracey.
 ‘The State of Moral Leadership’, LRN (2019), 3.
 Max H. Bazerman, ‘A New Model for Ethical Leadership: Create more value for society’, HBR (September-October, 2020).
 Bill Michael quits as chair of KPMG UK after telling staff to ‘stop moaning’, Financial Times, (February 2021) https://www.ft.com/content/4f569449-d113-48fe-b01a-9153f4c3d593. Accessed 09 July 2021.
 ‘Trust, Trustworthiness, Transparency’, The Future of the Corporation, A British Academy Briefing Note (January 2017) https://www.thebritishacademy.ac.uk/documents/2563/Future-of-the-corporation-Trust-trustworthiness-transparency.pdf. Accessed 09 July 2021.