Leadership Matters
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By Sarah B. Hood

Can altruism coexist with capitalism? A growing body of thought holds that organizations with a strong ethical mandate are not just a nice idea; they tend to be more productive, better at attracting and retaining desirable employees and ultimately more profitable than those without.

Nonetheless, the value of ethical leadership can be a hard sell to senior executives negotiating a tough economy. And even when they do buy in, who defines the ethical code, especially when values clash? 

Environment, human rights, loyalty, inclusivity – all are admirable values, but may not always align.

Is it permissible to test medical treatments on animals in order to reduce human suffering more quickly? What if a decision to source supplies more sustainably threatens to end a relationship with a long-established supplier? How can you accommodate an employee’s right to observe non-statutory religious holidays in a way that’s fair to other workers?

The short answer, says author and consultant Linda Fisher Thornton, is that it’s complicated; workplace ethics can’t be governed by a single rulebook. Fisher Thornton is the CEO of Leading in Context, a leadership development firm based in Richmond, Virginia. In her recently published book, 7 Lenses: Learning the principles and practices of ethical leadership, she analyses a practical approach for organizational leaders who wish – in the words of her own mission – to “unleash the positive powers of ethical leadership.”

Thornton Fisher believes that it is necessary to consider decision-making from the point of view of different sets of criteria. She orders these “lenses” along an arc that flows more or less from shortest-term to longest-term thinking, and from most practical to most aspirational.

• Profit (“Make money”): This lens focuses on traditional corporate values of financial loss or gain.
• Law (“Comply”): Guides organizational activities according to the minimum standards required by law.
• Character (“Be moral”): Centres on developing leaders’ personal moral integrity.
• People (“Care”): Includes respect for the needs and rights of employees.
• Communities (“Serve”): Widens the focus to include the broader community.
• Planet (“Sustain”): Places a high value on environmental conservation and sustainability.
• Greater good (“Do good”): This lens takes the biggest picture into consideration and looks ahead to the needs of future generations.

The ethical expectations of the contemporary world are changing, which can have dramatic implications for leaders. Organizations must better define an ethical system appropriate to their own particular activities and personality, and be constant throughout that entire system.

“Companies that consistently strive to do business ethically tend to outperform their counterparts who don’t, and they outperform in lots of different ways,” said Fisher Thornton. “When you lead with ethics, you build trust, and that’s when you transform the metrics. So traditionally, people have thought of ethics as a burden, but it’s moved to focusing on their potential and the opportunity that proactive ethics brings out in the organization.”

Managing people is an important component of ethical leadership, though not the only one.

“There is no one dimension of ethical leadership,” she said. “We are understanding that people are whole beings; people have many different aspects of their lives, and we can’t ask them to turn that off when they come into the workplace.” When a leader demonstrates that employees are valued for who they are as people, she says, they feel safe and they can do their best work.

Corporate leaders actually have an ethical obligation to keep abreast of the latest developments in their fields since, for example, it would be impossible to source ingredients, materials and supplies ethically without being aware of the health or environmental concerns that may have arisen about a given product in the supply chain.

“Our ethics as leaders are defined by every piece of what our organization does, and that includes our subcontractors and suppliers. If we have really good values in our own workplace, but we’re subcontracting to another country, we need to go over there and check,” said Fisher Thornton.

“We are our supply chain, and businesses are being held accountable for the whole chain by consumers. They’re saying no, you can’t have this squeaky-clean image and then use sweat shop labour. People are voting with their purchases. The proactive companies are making the changes now, before the laws require it, and they are being rewarded by the consumers who want to support values-based organizations,” she said.

“Ethical competence is always going to be a moving target,” said Fisher Thornton. “[I want] to help people build ethical competence, because it doesn’t just happen. Companies that are doing that are getting a lot of media attention. They’re attracting consumers who are attracted by the care they’re taking. Companies who are taking these steps are finding that it moves their metrics forward in wonderful ways.”

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