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It’s time to practice ethical leadership
Linda Fisher Thornton (Chief Operating officer, Leading in Context) on why future Leaders need to understand and practice ethical leadership, which requires much more than following laws
Issue Date - 01/01/2013
Q. Please tell us about some leadership trends that were seen in 2012.
A. Many business leaders struggled with the discomfort that comes from realising that their businesses are not operating in a sustainable way – in a way that manages use of resources responsibly and benefits society.

The emerging business model is one that embraces several connected variables that are considered to be “new” by a large number of businesses. First is doing business sustainably without harming the environment. Second is providing clear benefits to local communities and to society. Third is providing the kind of working environment that is fun and engaging, and that respects human dignity and differences.

Q. What should be the prime areas of focus for leaders across the world in 2013? What challenges can they face?
A. In 2013, leaders will begin to accept that in a global economy, ethical leadership is a strategic advantage. It is more than just the morally right thing to do. It also brings economic advantages at a time when ethical consumerism is growing. Customers increasingly want to support ethical businesses, and employees want to work for them.

The challenges in 2013 may include tight profit margins, fierce global competition, and finding that “being good” in your industry is not enough to compete in a global marketplace where there are so many choices. Businesses will need to lead responsibly in ways that demonstrate that they are thinking beyond their own gain.

Q. Please elaborate on how business professionals can practice ethical leadership?
A. Leaders will need to act in ways that demonstrate that they realise laws are simply the minimum standards of behaviour, and that leading ethically requires much more. Focusing on the laws will keep us reactive and “behind the curve,” since laws change in response to society’s changing definition of the kinds of behaviour that are acceptable. Aiming higher keeps us “ahead of the curve” and in a proactive mode.

Q. How have leadership ethics evolved with time?
A. Our understanding of leadership ethics has changed a great deal in the last few years, based on a better understanding of how connected we are as a global society, the ways that social media is changing business, and a better understanding of the positive and negative impact of business leadership on employees, customers, societies and the environment.

Businesses that have stayed ethically aware and adapted accordingly to these changes realise that teaching employees to comply with given set of laws and regulations about how to treat and behave with people is quite detailed and cumbersome.

The real value comes in teaching them how to respect each other and honour important principles of responsible leadership and responsible business. For example, you can train people not to harass each other (focusing on a negative behaviour that you do not want) or you can train them to respect and honour each other (focusing on a positive behaviour that you do want), which makes it completely obvious that harassment is not essentially a responsible behaviour.

Q. What are the two things that ethical leaders must avoid?
A. Refusing to avoid as the world changes and thinking what worked in the past will always work in the future should be avoided by leaders. It is also important to avoid making every decision based on profits alone and thinking it is responsible leadership.

Q. How will the future traits of ethical leadership be different from the current ones?
A. The future of ethical leadership involves a high degree of ethical awareness and ethical competence that is intentionally managed by business leaders. It involves considering a broader definition of ‘stakeholders’, a desire to give back and contribute to the greater good, and a lower tolerance for harm to people and the planet. Future ethical leaders accept full responsibility for what it means to be leading humans in a global society.

Q. Tell us what steps can leaders across sectors take to help their businesses soar high in 2013?
A. First, leaders across sectors can set the tone for an ethical culture at the highest levels of leadership. Research is showing that companies with strong and responsible leadership at the top are better protected from the risk of unethical behaviour throughout the organisation.

Second, leaders can create a high-trust culture, where every employee can thrive and do great work. In environments with high trust, there is also measurably better financial performance. It takes a high-trust organisation to bring out the best in people, and that helps business leaders compete in today’s global marketplace.

Third, leaders can reduce stress throughout the organisation. Chronic stress damages the area of the brain associated with learning and memory. High stress environments harm people and “shut down” employee potential. Removing sources of high stress (which may include bad leadership) helps employees and businesses perform in a better way.

These three steps (setting the tone at the top, building a high-trust culture and reducing stress) are all connected in important ways. Sincerely improving the organisation in these three areas will help bring out a business’ potential for greatness.
Shishir Parasher           

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