Ethical Leadership in times of crisis

The world is in crisis, business has come to a standstill and people are confined to their homes. The earth is reeling from the unprecedented abuse it has endured over the past decades. In such challenging times, it is more important than ever critically to review and reassess established leadership paradigms. The crisis is such that companies and governments will have little choice but to radically overhaul their ways of doing business and managing people. Ethical leaders must emerge to lead us into a better future.

What is an ethical leader?

Few if any corporate or government leaders would aspire to be labelled unethical.

Ethical leadership is essentially characterised by respect for values, for the rights of others and for our environment. It reflects trust, honesty, consideration, charisma and fairness. These qualities are manifested by ethical leaders both within and beyond their companies and communities.

Back to Basics

Sound ethical leadership calls for a return to the basics – to what some people may term ‘old-fashioned’ principles. The unprecedented economic and social disruption precipitated by the current crisis demands a fundamental review of our societal aspirations and expectations.

Shouldn’t transparency, sustainability and respect for human rights now be expected of all businesses? I firmly suggest they should, alongside the host of other social and environmental factors that must form a vital and integral part of the leadership mandate going forward.

The minimum standard is gradually being raised to a higher level as we better understand the far-reaching and often unforeseen consequences our choices can have on other individuals, communities and the environment. As the crisis underscores ever more starkly the full extent and far-reaching implications of our global interdependence, the decisive leadership required to respond to the new challenges of our times requires a radical paradigm shift – towards a higher, more visionary plane of management, one which encompasses and embraces the highest principles of ethical leadership. A new breed of responsible global citizens.

It is not simply a matter of responsibility, however. It is also in the leaders’ own best interests – a mutual ‘win win’ situation - as ethical considerations increasingly influence the behaviour and choices of consumers and other stakeholders. It follows that setting a dynamic example in this respect represents a mark of diligent and visionary management towards not only clients but also shareholders. Indeed, today’s managers are well advised to demonstrate commitment that transcends mere compliance with the prevailing laws and regulations but which actively associates the company or brand with the highest principles, human rights, social justice and sustainability.

What then are the keys to becoming an ethical leader? Basically, they involve living up to the 4V’s of Ethical Leadership:

1. Values

Unless you have rigorously defined what your own personal core values and moral standards are, it is difficult to live up to them and, even less, transmit them to others. This is an obvious but critical point as, too often, managers and other people in responsibility seem to shy away from questioning their policies and practices in the light of changing circumstances. This can only be achieved through a process of critical self-analysis and constructive re-appraisal. The first step, therefore, is to establish your own personal benchmarks.

2. Vision

Have you reflected on your vision and goals as a leader? Are these reflected in your objectives and, if so, what strategies can be initiated to ensure that your policies and activities result in their achievement? Are you seeking profit above all and at any cost? Or do you want to develop the company on more solid and sustainable foundations - future proofing it so that it is better equipped to rise above the escalating challenges posed by a perilously uncertain climate, both in the economic and literal senses.

3. Voice

Is your vision communicated in a clear, transparent, honest and trustful way? Are your behaviour, words and values in sync? In short, are you walking the talk?

4. Virtue

Ethical leaders are role models by virtue of the daily examples they set. Do you live up to the values you set for others? Do you practice what you preach on such issues as corruption, harassment and mobbing?

Why it is important?

To establish a sound and credible ethical culture throughout a company takes time. It does not happen overnight. Employees tend to emulate the behaviour of their leaders so, besides managing by example, CEO’s must demonstrate they truly ‘mean ethical business’ by implementing a rigorous and impartial policy of no tolerance for misconduct. As we emerge from the current crisis, hopefully strengthened by its lessons, we should seize the opportunity (not to say necessity) offered to disseminate new standards of ethical and business excellence. In a typical company, this will involve first addressing the following:

• Employee relations - how the company hierarchy communicates and interacts with its employees in order to set and maintain a viable ethical framework.

• Investor relations - the relationship a company has with those who support it financially, as well as the screening and choice of such investors.

• Customer relations - how a company takes care of, relates to and communicates with its customers. Can consumers have confidence in the ethical vision and practice of the company?

• Supplier relations - the relationship a company has with those who supply the products and services it needs. Does the company ethically source such products and services to the greatest extent possible?

Similar considerations naturally apply to the governmental sector. If our elected leaders do not live up to the standards that behove the trust placed in them, how can they expect our business leaders to do so, let alone the public at large!

Why ethical leaders are key in times of crisis

Putting the human being at the heart of business or government, restoring respect for the environment and emphasising sustainability over short-term profit are all factors that assume particular importance in times of crisis.

They are the key to inspiring committed employees, of the kind who can be trusted to give their best even when obliged to work from home or under other difficult circumstances - employees who are willing to make sacrifices in order to ensure the survival of the company and help re-build it.

Similarly, due diligence in the management of supply chains and finances stimulates customer loyalty and investor confidence, both vital commodities when it comes to surviving and transcending times of crisis.

As the world changes, so should our expectations of what constitutes a good leader. As Einstein is purported to have observed, “the world will not evolve past its current state of crisis by using the same thinking that created the situation.” Gone are the days when the return of good financial results was the sole determinant of success. Today’s leaders need to focus on a much wider and more holistic range of issues to ensure corporate survival in times of uncertainty.

Now, more than ever, as we experience global lockdowns, and the accompanying market meltdown, the public are looking to their elected representatives and corporate leaders for guidance and reassurance.

Companies with a strong culture of ethical leadership are likely to be those best equipped to survive and rebuild dynamically. They will be at the vanguard of a brighter, more sustainable future driven by a new generation of ethical leaders.

Learn more about how to become an ethical leader: www.areteacademy.ch

The Arete Academy is committed to ethical and socially responsible leadership, respectful communication and peaceful conflict resolution. Through our programmes and courses offering customised, needs-based, soft-skills training, we listen to you, we understand your challenges and help you find appropriate solutions.