Guest blog from Kai Peters, Chief Executive of Ashridge Business School in Hertfordshire, UK.
How ready are business leaders to lead in an ethical way?
Our research suggests there’s far to go before most will handle the challenge of creating an ethical environment. For example, there must be commonly held values right across the supply chain. This includes all stakeholders. It is difficult to create this, yet many leaders regard it as important.
At Ashridge we have conducted a number of studies among chief executives around the world. In our first survey, most of the 200 CEOs (76%) said it was important their company had the skills to lead in an ethical way, that is to create an ethical environment.
That is, the mind-sets and ability to lead in an ethical way. However, less than one in ten felt their company already had these skills.
Later we asked 800 CEOs what are the most desirable skills to lead in an ethical way. They said it was to role model how to behave; and to be able to educate stakeholders.
We also found companies need three broad clusters of skills. These were the ability to deal with context, complexity and connectedness.
Achieving them is far more difficult than naming them. So my new co-authored book Steward Leadership shows what creates and prevents authentic, ethical, leadership.
To lead in an ethical way–to create an ethical environment–leaders and managers must be authentic. Entire company authenticity depends on developing many individuals who embody a holistic, ethical perspective.
Steward leadership also puts the interests of community and society ahead of the individual’s. This is in stark contrast to Western economic thought which puts self-interest at its core.
We asked 210 MBA students to write about their experience of authenticity. From their life stories came the importance of self-knowledge and reflection. It seems when we think about it, we know what the right thing to do is.
Similarly, as their best ways of dealing with ethical situations they cited confidence, compassion, trust, openness and honesty
However, the main stumbling block to authentic behaviour lies in “conforming to the expectation of others”. Others include the pursuit of material wealth, fear, and the influence of organisations and of the workplace.
As individuals we seem to think the right thoughts. We usually want to make ethical decisions. But both the workplace and the social environment of the organisation can block authenticity.
So, what does all the research about ethics and authenticity mean at the corporate level? First, a sure way to fail at creating an ethical environment is to make sweeping statements about corporate level values, but without engaging with the leadership and staff.
Second, while many employees can mature and develop, others will always struggle with the more complex and sophisticated ethical and sustainability challenges.
Lastly, to lead in an ethical way is to promote continuous education, engagement and reflection with staff. Together with stakeholders and customers these determine whether there is a sustainable, authentic organisational leadership which can lead to an ethical environment.
Kai Peters is the Chief Executive of Ashridge Business School in Hertfordshire. He is co-author, together with Kurt April and Julia Kukard, of Steward Leadership: A Maturational Perspective published by the University of Cape Town Press (2013).