How Does a Leader Find the Courage to Step Through Fear and Confusion to Act Ethically Despite the Risks Involved?
Ethical behavior extends beyond the technically correct and is mainly characterized by its moral uprightness. Being ethical is about going beyond what is right and incorporating what is just as well. Liu (2015) calls for leaders to accept that their roles go beyond just steering organizations towards target achievement. She emphasizes on their responsibility as role models who set precedence for their colleagues. In addition to the precise definition of roles, leaders should be held to and consequently graded by a higher standard than their employees. Leaders should create benchmark levels of ethic and compliance, which they can use to examine not only their capabilities but also their peers. In other words, they should use a peer accountability system.
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Leaders should also create an open line of communication with their subordinates. Allowing workers reasonable access to their leaders gives them the courage to point out unethical behaviors relative to a very segregated chain of command. According to Brown and Mitchell (2010), leaders sometimes disassociate themselves from their employees, consequently rationalizing unethical behavior. The inaccessibility of leaders can sometimes intimidate their workers into remaining silent, even in instances of unethical behavior. A leader can, therefore, draw strength from their employees, encouraging regular open dialogue and criticism. Leaders must remain more diligent than ever to stay upright not only for themselves but also for those whom they lead.
Business Situation where a Leader was Unethical.
Perhaps the most shameless display of gross disregard to ethics was the behavior of some professionals during the 2007 housing crisis. One example would be the presidents of several large investment banks. When questioned in subsequent proceedings, the presidents acknowledged that they were betting against their investors. They authorized the production and sale of financial products that were riskier than they communicated to their clients while simultaneously betting against them. When questioned on the legal practicalities of their actions, they claimed that while they behaved unethically, they had not broken any laws. The leaders in this scenario were well aware that they were being unethical but proceeded with their various courses of actions.
In addition to this, I was especially perplexed by the unethical behavior of the rating agencies before the housing crisis. These institutions were tasked with providing an assessment on whether the investment products were fit for sale, and proceeded to rate them highly. Their duty to behave ethically came in reporting these products at their true worth. Instead, the companies acted unethically by skewering their opinions to favor the following companies rather than give an honest valuation of the products. These businesses claimed to be within the confines of the law, offering that their being unethical was not illegal. However, these terms are more entwined than it appears, and the disregard of ethics had real legal repercussions for a significant number of people.
Knowing what you know now, how would you have Counseled the Leader?
A key element of being a good leader is knowing the difference between what is just and what is right while knowing what to apply in what circumstance. I would urge the leaders to examine their code of ethics, both personal and professional. It is often the case that most professional codes of ethics place the well-being of the clients first. Therefore, I would advise them to gauge their actions against their respective codes and deter from any activities that would compromise their morality. This would employ a great deal of moral reasoning in addition to other motivating factors. Brown and Mitchell (2010) point out that in the decision-making framework, applying a reasonable degree of moral reasoning is vital in establishing a reliable solution that abided to both legal and ethical expectations.
At times, a complete disruption of the system is necessary for the preservation of one’s moral dignity; therefore, I would advise the leaders to consider extreme action. Where possible, I would counsel the leaders to suggest a different approach in their business strategies. I would urge them to be more transparent with their clients, communicating the complete nature of the investments to the clients and educate them on what undertaking one would mean in both a positive and negative return. By taking either of these actions, these leaders would fulfill their ethical responsibilities to their clients.
How Will You Prepare Yourself to Lead Ethically?
Unethical actions may not hold legal implications for a business. However, the long term effects would be profoundly detrimental. Therefore, as a potential leader, I strive to create an environment where ethics are ingrained into the fabric of the business. I intend to prepare by establishing a detailed personal code of ethics; I believe that the first step in the right direction leads me towards an honest internal analysis of my moral guidance system. Kuligowski (2019) asserts that it is necessary to examine your values and how they align in the quest to becoming an ethical leader more so in this period when the line between good and bad is so often redrawn.
Given that our thoughts are a collection of the environments and experiences that we are exposed to, I also intend to unlearn my biases systematically. According to Kuligowski (2019), we all adopt individual preferences and refusal to acknowledge their roles in informing decisions can be detrimental, especially for a leader. Therefore, my success as a leader would partly depend on my willingness to form new perceptions and recognizing when my preferences are impairing my ability to make the right decisions. The consequences of unethical leadership have in the past triggered the demise of industry titans; it would, therefore, benefit all relevant parties to incorporate strong ethical practices into the vision of their organizations.
References
Brown, E. M., Mitchell, M. S. (2010). Ethical and Unethical Leadership: Exploring New
Avenues for Future Research. Business Ethics Quarterly (20), 583-616 doi: 10.5840/beq201020439
Kuligowski, K. (2019). How to Be an Ethical Leader: 4 Tips for Success. Business News Daily
Retrieved from https://www.businessnewsdaily.com/5537-how-to-be-ethical-leader.html
Liu, H. (2015). Reimagining Ethical Leadership as a Relational, Contextual and Political Practice
Leadership (13, 3) 343-367 doi: 10.1177/1742715015593414
