Ethical leadership is not enough

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Professor Deon Rossouw | CEO | The Ethics Institute | deon.rossouw@tei.org.zawww.tei.org.za |


The need for ethical leadership is much clearer and more urgent now than it has ever been since the dawn of the new South Africa.

Unfortunately, it took massive corruption to elevate the importance of ethical leadership in the public consciousness, and so the cost has been high to get us to this level of awareness. And yet, especially for those organisations that have been tainted by state capture, more than ethical leadership is needed to charter a new, positive direction.

Certainly, it is encouraging to see how the new leadership in the ANC under Cyril Ramaphosa is emphasising the need for ethical leadership and displaying a commitment to root out corruption.

These ethical aspirations have already resulted in important changes: persons such as Richard Mdluli and Anoj Singh have been removed from their positions, the Asset Forfeiture Unit of the NPA has begun seizing looted state assets, and both the board and management of the long-suffering Eskom have been replaced.

Meanwhile, in the private sector, organisations are paying attention to the need for a new level of social and ethical responsibility. The beleaguered KPMG has replaced the leaders under whose watch unethical practices occurred, and has appointed its first independent chairman, Wiseman Nkuhlu, to lead the restoration of its integrity (and, indeed, the reputation of the accounting profession itself).

Ethical leadership thus matters: it is critical in transforming organisations affected by scandal and corruption into functional and reputable entities. Yet, as essential as ethical leadership is, it is not enough on its own.

Clarity about standards

The intention of building an ethical organisation can only be turned into reality if there is clarity about the ethical standards that will guide it.

Much like the Constitution offers the ultimate benchmark for South Africans to refer to in matters of rights and conduct, an organisation needs to offer a similar reference point to guide the decisions and behaviour of its own people. It is essential that all members of the organisation be familiar with the ethical vision, values, and standards of the organisation, and this can only be achieved through ongoing communication of, and emphasis on, these standards. This applies to suppliers and business associates as well, otherwise they might undermine the organisation’s attempt to restore its integrity.

The right people

Ethical leaders should ensure that the wrong people get off the bus, and that the right people get on (or remain on) the bus.

Persons who were part of the previous shenanigans in the organisation should be brought to book, which might mean demotion or departure, depending on the seriousness of their involvement in wrong-doing. In a similar manner, those who resisted and fought against the previous wrong-doing should be recognized for their loyalty and commitment to the best interests of the organisation.

It is not only the ethical tone at the top that matters, but also the ethical mood in the middle, and the ethical groundswell on the ground. In fact, there are few things more precious to an organisation than those people throughout the levels who not only personify its stated ethical values, but who can also persuade others to do the same.

Consequence management

An organisation on the road of renewal must demonstrate that it is serious about its commitment by ensuring that there are consequences for both adherence and non-adherence to its ethical standards.

In most instances, organisations interpret consequence management in a retaliatory manner: for example, they show ‘zero tolerance’ to transgressions and transgressors. While it seems obvious that transgressions should be dealt with unambiguously to prevent reoccurrence, it is less obvious that such an approach can cultivate a culture of fear-based compliance, where the motivation to uphold standards is purely a desire not to be punished.

Such a culture is not conducive to the appropriation of the ethical values and standards that the organisation wishes to promote. Thus, it is important that the negative ‘stick’ part of ethics consequence management is complimented by the recognition of persons who exemplify the organisation’s ethical standards

It starts with leadership, certainly, but it is only through the continuous reinforcement of the right ethical values and behaviour that the organisation can – eventually – become a place where people do the right thing even when no one is watching.


 

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