Ethical Leadership: Staying Principled in Times of Crisis
It also feels like an ideology that’s found its moment. The global perma-crisis has begun to unravel the carefully constructed frameworks that have defined leadership roles and responsibilities for decades, in some cases exposing the fragility of systems and processes more concerned with maintaining the status quo than supporting the evolution necessary for companies to thrive in ambiguity.
But how do organisations pursue purpose and remain profitable? And, importantly, how can leaders stick to their ethical principles when circumstances – and business priorities – change?
Change for growth
Marius van Dijke is Professor of Behavioural Ethics at Rotterdam School of Management (RSM), Erasmus University. He believes that leaders will be forced to acknowledge and embrace new ways of working in order to address the urgent, existential challenges before us: climate change, social and geo-political disruption, and continued economic uncertainty.
‘Businesses need ethical leaders: leaders with a clear moral compass who can guide employees and organisations in line with that compass. Without this, it will be nearly impossible to decide how companies can make a real contribution to fighting the great challenges of our time.’
It’s a timely conversation. Shrinking public trust in the ability of prominent business leaders to navigate these issues (witness the embarrassing corporate missteps by global brands like BP, Volkswagen and Apple) has already conferred fresh legitimacy on a more collaborative leadership style – one that promotes trust, inclusion, innovation and creativity.
‘The impact of this crisis of trust on the property, energy, and financial markets has prompted valid questions relating to the ethics, integrity and morality of our leaders. Integrity, or ‘the ability to do the right thing even when no one is looking’ is a product of a leader’s intrinsic qualities. But how is ‘right’ defined? And what criteria is used to judge the actions that follow?’
We already know that traditional top-down leadership styles – those that score low on empathy, accountability, honesty, and reliability – can create toxic workplaces, accelerating staff attrition rates and muting performance. Conversely, when leaders prioritise ethical principles and act with integrity, they are more likely to create a culture of respect and fairness that inculcates loyalty and stimulates growth – qualities that are in high demand when times are tough.
Teresa Boughey is CEO of Jungle HR and a prominent DE&I specialist. Teresa’s view is that ethical leadership is always the right choice for businesses and their stakeholders, even – or perhaps, especially – when conditions are difficult.
‘Ethical leaders understand the importance of prioritising the creation of a culture that values and respects individuals for their unique difference and recognise how such diversity can unlock new sources of innovation and drive long-term success.
‘This in turn provides an organisation with a foundation upon which trust, respect and transparency is built. It directly benefits employees but it also improves relationships with all stakeholders – including customers, communities, and investors.’
This ground-up approach to corporate growth has many advantages – not least that it encourages the amplification of more diverse voices.
Teresa Boughey: ‘Ethical leaders recognise the importance of pausing and taking time to consider whose voice they are not hearing. They proactively seek perspectives and experiences from a wide range of individuals as they recognise that this diversity of thought leads to innovation as well as trust and loyalty.’
‘With Late Millennials and Gen Z demanding organisations create more diverse and inclusive workplaces, ethical leadership is increasingly becoming an urgent catalyst for change. This type of leadership can provide a template to support the myriad shifting norms within the workplace, fuelling advances in social responsibility, in legal and regulatory requirements, and in talent attraction and retention.’
It’s a view echoed by Lewis Maleh, a recruitment expert and the founder and CEO of executive search consultancy Bentley Lewis. Lewis sees ethical leadership as key to recruiting and retaining top talent – but only if it’s authentic.
‘In order to gain a competitive advantage, business leaders need to embody their ethical and socially responsible stance. This includes demonstrating a real commitment to sustainability and eco-initiatives, supporting local communities and earning employees’ trust.
‘Leaders who claim to be ethical, but whose actions do not back up their values will quickly be identified and held to account. This will ultimately have a negative impact on both talent acquisition and brand perception, resulting in a loss of trust and reputation.’
People and planet
That leaders will increasingly be expected to direct their energies into the wider world is a given. With mass collective action required to slow climate change and to preserve the world’s dwindling resources, businesses have an important role to play in safeguarding our planet for the future.
Solitaire Townsend is the author of The Solutionists – How Businesses Can Fix The Future and co-founder of Futerra, an award-winning sustainability agency.
‘We’re all being asked questions about the future of humanity that desperately need answering. But for too long, a ‘do less bad’ risk and responsibility approach to sustainability has gripped businesses response to the perma-crisis.’
Solitaire believes that we desperately need more ‘do more good’ business models and inspirational, ethical leaders whose fluid leadership style propels organisational change.
‘IKEA now buys back its used furniture for resale, Google has tweaked maps to offer ‘eco-routing’ saving carbon emissions equivalent to 100,000 cars, while entrepreneurs like Oatly, Tony Chocaloney and Who Gives A Crap are pioneering new business models.’
In an increasingly automated workplace, it’s likely that this new breed of leaders will also need to consider the ethical implications of technology and data use.
‘We are seeing significant demand by senior managers and executives in corporations, governments, agencies – any organisation processing data to get across what ethical leadership should mean in an increasing age of AI.
‘Regulations and best practices are emerging gradually – but are behind the pace of development when it comes to generative AI and large language models like ChatGPT.’
It will be important, therefore, for leaders and their businesses to monitor how tech – especially AI – might deploy systemic bias to further marginalise women, BIPOC and physically or neuro-diverse job applicants, for example.
Cerrone Lundy is Director at global business and brand transformation company Vivaldi Group. He thinks that businesses will need to be extra vigilant to ensure that outcomes don’t reflect bias and are aligned with their ethical stance.
‘Technology can sometimes become a crutch that affords people the luxury of saying ‘my facial recognition system does not recognise race’ so my organisation is acting ethically, my products don’t discriminate, and my outcomes are equitable – but those with a more nuanced understanding realise that a deeper more systemic bias may be at play.
‘The workforce of the future will realize that acting ethically isn’t a passive thing – it is an active choice.’
A holistic approach
It’s a choice that may mean prioritising long-term impact over short-term goals – something that’s easier said than done in a volatile economic environment. Ethical leaders must become activists, fostering the creation of a fair and inclusive culture in the workplace, while committing to a more responsible business model that will help build a more sustainable future.
‘Doing what is right by your people and the planet is a non-negotiable for organisations aiming to thrive in today’s business world and to be match fit for tomorrow. However, words alone cannot drive progress. To remain sustainable and profitable in the long-term requires leadership that thinks and feels beyond the bottom and top line.’