More Traits of Ethical Leaders

We have discussed two traits of ethical leaders – limiting what they say to what they can say truthfully and knowing the stakeholders. In this post, we discuss two more traits of ethical leaders.

Surround yourself with truth tellers.

Many CEOs express surprise at how little they can directly know about the organizations they lead. All CEOs are dependent on their direct reports and other managers to tell them how things are really going. Ethical CEOs are always looking for direct reports who tell them the truth even when it is very uncomfortable to do so. These CEOs know that they will only be able to learn the truth if they reward managers for candidly delivering bad news. Delivering bad news does not come naturally to highly competitive individuals seeking to advance their careers. It is only by making a conscious effort to reward individuals who deliver bad news that a CEO can gain a realistic idea of what is going on in the organization.

Learn for yourself.

No matter how much effort you put into rewarding candor on the part of those who report to you, there is often no substitute for looking at things for yourself. I remember talking to the CEO of a financial services company that had just barely survived a scandal. I suggested that he visit all of the company’s field locations to tell his team what he expected of them and also to listen to how they felt about what had happened. The CEO said, “You means you want me travel around the country and sit on red plastic chairs drinking coffee out of styrofoam cups?” Exactly what I meant. By doing this, he not only put the company back on track, but he also learned how it had gotten on the wrong track.

More on Ethical Leaders

In an earlier post, we noted that ethical leaders often say less but stick to the truth in what they do say. See above for more on that topic.

Another trait of ethical leaders is that they know the stakeholders in their business. While almost all CEOs pay lip service to the maxim that shareholder value is paramount, ethical leaders realize that a company is successful only if it gives priority to many stakeholders. Not only does a corporation depend on it employees and customers; it also depends on its suppliers, the media, regulators at multiple levels, environmental critics, the financial community, political allies and many other stakeholders. While some CEOs focus only on shareholder value, ethical leaders try to balance the interests of stakeholders so that they align in support of the corporation. Some call this social responsibility, but it is just common sense to ethical leaders.

Know Your Ethical Type

I think we all know that people look at things differently when it comes to ethics. But did you know that there are distinct ethical types? And do you know your own ethical type? Try the article at http://www.huffingtonpost.com/mark-pastin/whats-your-ethical-type_b_8962356.html to learn more about ethical types.

Traits of Ethical Leaders

In many years as an ethics consultant, I have seen my share of ethically challenged leaders in both business and government. Most do not sustain success, but some do. But I have also worked for highly ethical individuals who have risen to the top of their organizations. There is much to learn from those who match ethics and success. Here are some lessons based on observations of ethical business leaders.

Say less but say the truth.

When you are a CEO, every word you say is measured by your employees, doubted by journalists, parsed by analysts and weighed against laws and regulations by a hungry plaintiff’s bar. You are not entitled to many opinions as any expressed opinion will be mined for potential insight into what your company will do next. This is why CEOs are often quiet on issues of the day. When they speak, they are speaking for their companies and not themselves no matter how hard they try to separate the two. Ethical leaders avoid half-truths and lies by saying less. They limit what they say to what they know – or think they know – to be true.

Four additional lessons from ethical leaders will be shared in future posts.

The HR Puzzle

One challenge many ethics and compliance officers face is working with HR. The puzzle is that it is not always easy to get along with HR. In fact, in some organizations the HR function is derisively described as “Fortress HR.” I take a look at why this relationship is troubled from the perspective of HR in the most recent issue of Workforce magazine. You can read the article at http://www.workforce-digital.com/read-wf/december_2015?pg=44#pg44.