Principle-centered leadership gains followers - We're losing many...

CORPORATE ETHICS –  www.ccsu.edu.forum

Professor Sven Ljungholm, Corporate Ethics

Finnair Regional Manager , NY USA

Published in 2006 - Systematic Reflections on the Scholarship of Teaching   Central Connecticut State University   * indicates that the segment was not a part of the original paper)

There are approximately 15,000 publicly held companies in the United States, and honest, dedicated people, who consistently strive to make good decisions on behalf of their shareholders, employees, and other stakeholders, run the vast majority of them (Donaldson, 2004). Not all in senior management, however, deserve such praise.

Several senior executives from Enron, Global Crossing, WorldCom, Arthur Andersen, Tyco, to name a few, have exchanged, or will soon exchange, their pinstripes for prison stripes. The boardroom and company limo will be exchanged for a seat on the Department of Corrections bus and a cramped cell. Confinement will provide ample time for reading, reflection, and remorse. Will more than one former CEO, in his or her solitude, ask if the prison library carries Managing for Results? No doubt this was assigned reading while they were earning their MBAs. If so, Peter Drucker’s words will remind them that as corporate leaders “They should (also) spend more time and thoughts on a great number of things, their social and community responsibilities for instance.” (1964, p. 3)

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The management guru, Peter Drucker is quoted saying that the SA is the best-run company in America. And in so doing Drucker considered “integrity” to be the “touchstone”—the very essence—of management.

Another guru, and who also is a regular at the B school (Harvard Business School) is another distinguished business guru, Warren Buffett. He had just delivered a thought provoking, often irreverent, speech to the newest generation of MBAs. When he opened the floor to questions, the erudite class was not the least bit intimidated, and a dozen raised arms immediately greeted Buffett.

He pointed to a student near the front. "Mr. Buffett," she asked, "How do you make hiring decisions?" A snicker ran through the audience. "Buffett didn't pause; he had been asked that question many times. He lowered his wrinkled brow and smiled. "I look for three things," he said. "The first is personal integrity, the second is intelligence, and the third is a high energy level." He paused and ran his fingers through one bushy eyebrow. "But," he said, drawing closer to the microphone and his attentive audience, "If you don't have the first, the second two don't matter."

With the recent scandals at some corporate behemoths, corporate ethics and personal integrity were media headlines, the topic around lunch room tables, in boardrooms, and the water cooler. In their frenzy for cash, power, and lavish excess, executives discarded every fundamental set of moral principles and ethical dictates ever learned.

True, those lessons may not have forecast the Enronian temptations executives would face in the 1990s, but unchanging, a priori principles were at the heart of those teachings. At the root of those lessons is duty. If one accepts that there are moral duties (ought), knowledge of these duties must be accepted as being a priori. “The a priori or pure part of ethics is concerned with the formulation and justification of moral principles - with such terms as ‘ought’, ‘duty’, ‘good’ and ‘evil’, ‘right’ and ‘wrong’” (John Stott, 1984, p. 14).

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These are simple ethical principles that some of us believe were tossed to the side when those in power in the Salvation Army colluded against a talented surgeon committed to a lifetime of serving Christ in an African bush hospital.

ENRON CORPORATION

A great deal has been written about the pragmatic culture of arrogance and greed….  It was an era of scandals committed by a particularly greedy gang intoxicated with an egotistical virus that brought them to a crazed binge of excess…. There are more than 50 pejorative words to label each member of the “summer of scandals” team: self-indulgence, self-interest, self-satisfaction, self-importance, self-righteous, self-rationalization, self-delusion, self-serving, and more. Positive words lacking in their makeup include self-control, self-discipline, and self-correcting.

Before the general public’s outrage had time to wane, President George W. Bush, in a Wall Street speech on July 9, 2002, said: “Everyone in a company should live up to high standards, but the burden of leadership rightly belongs to the chief executive officer. CEOs set the ethical direction for their companies…. A key characteristic in the burden and challenge of leadership finds its genesis in morality and morality in a corporation sets an ethical example that filters from the top down. “There must be complete commitment from the CEO and senior executives. The CEO sets the tone and direction of the company’s reputation, and must drive corporate ethics through continuous communication with stakeholders and employees” (Coates, 2000, p. 26). “They must redefine corporate governance with practices that go beyond mere adherence to new rules and demonstrate ethics, integrity, honesty, and transparency” (Donaldson, 2005, para. 14).

Integrity Is Waning

Of concern beyond the corporate scandals, however, are the troubling results shared in a recent survey highlighting the propensity of the average American to break from accepted codes of behavior….Patterson and Kim estimate that 91% of us regularly embroider the truth. “We lie and don't even think about it,” Patterson and Kim write (in Colson, 2002, p. 112).

…. Even though values (ethics) are to a degree culturally developed, endorsed, and sustained, they are fundamentally grounded in an a priori moral foundation that is unchanging, inflexible, and self sufficient, not relying on any other science. Morality is based on fundamental truths, a moral code, a framework of ethical reference, framed and grounded in philosophy (values-beliefs)….Thomas Lickona defined it as, “Character is knowing the good, loving the good and doing the good” (in Josephson, 2002a, introduction).

By definition integrity means wholeness, adherence to a code, and honesty. Integrity is necessarily built on ethical practices of managers, ethical systems that support the work of employees and managers, and ethical relationships. ….It is time to refocus on integrity – on what really matters to successful organizations and societies ( the SA)– and away from the narrow conceptualization of maximizing wealth. (p. 25)

Ethics is at the very root of business leadership. Ethics is a culture, a lifestyle, not simply a code of conduct. It is the very heart of personal character; knowing what you are expected to do in all matters pertaining to business. It is the foundation on which corporate duty is built. If we agree that corporate ethics is grounded in management’s morality we, as teachers of future corporate leadership, are obligated to include ethics as a course of study. In an era where corporate leadership is recruited internationally, it is more relevant than ever that business schools, domestic and foreign, come together in support of a core course in ethics recognizing our responsibilities to society in an ever-shrinking global village.

Ethics is good for business (Coates, 2000)…. Ethical firms develop trusting relationships with their clients and establish stable and profitable relationships. Ethical firms minimize the catastrophic risk of scandals or disasters that destroy companies and careers.” (Coates, p. 26)

….  Principle-centered leadership is marked by noble characteristics; honor, commitment to do the right thing, truth, and fairness. Those values will always find willing followers, those eager to contribute to what they perceive as worthy goals, grounded in unchanging ideals.

*Ethics

All Salvationist ethics rely on Jesus for their authority. Their essence is captured in phrases like 'following Jesus' and 'the imitation of Christ'.

Promises

I will uphold Christian integrity in every area of my life, allowing nothing in thought, word or deed that is unworthy, unclean, untrue, profane, dishonest or immoral.

I will maintain Christian ideals in all my relationships with others; my officer colleagues and fellow Salvationists, those to whom and for whom I am responsible, and the wider community.

_______________________References

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