“E” Ethics: The Underpinnings of Leadership

Every time I pick up the business page of a newspaper, I read about another corporate ethical situation, albeit carried over form the heydays of the late 1990s. The latest one is the additional indictment of other individuals associated with Enron. While moving through my alphabet of topics, I couldn’t leave “E” without addressing ethics.

We know the SEC just recently adopted final regulations to protect shareholders. Although it has not mandated a company-wide code of ethics, the various listing exchanges (NYSE and NASDAQ) have proposed such rules. It’s too bad that we have to resort to this extensive legislation in order to conduct our affairs in accordance with good business practices. Is it that difficult to differentiate right from wrong?

It must be or we wouldn’t have all these corporate fraud occurrences around us. If we look at these situations closely, we see that unethical actions happen because of pressure—either externally delivered or internally delivered upon us. External pressure may be from shareholders to whom we promised great results. Internal pressure can fester because we have something to prove to ourselves or to another individual.

But to be effective leaders we need a backbone that is immovable and uncompromised. Leadership is about trust and if we behave in an unethical way, there will be no trust between our followers and us.

“Ethics, too are nothing but reverence for life. This is what gives me the fundamental principle of morality, namely, that good consists in maintaining, promoting, and enhancing life, and that destroying, injuring, and limiting life are evil.”
— Albert Schweitzer

It is too bad that some are roped into compromising ethics at their place of employment. Is it greed that takes over, driving people to behave this way? As leaders of our organizations, we need to be modeling the way for our constituents—cutting corners or behaving in ways that dishonor our associates goes against all aspects of good leadership.

Ethics involve our decisions, actions, and inactions. We are part of the animal spectrum and animals regularly take what is not theirs. Humans, however, have the intelligence to make a positive decision not to steal. Yet, with intelligence comes the capability for deceit. Still, we cannot accept the latter as a practice. We need to live our lives by the golden rule of doing to others what you would want done to you—also known as the ethics of reciprocity.

“The truth of the matter is that you always know the right thing to do. The hard part is doing it.”
— General H. Norman Schwarzkopf

As you think about ethics within your own businesses, think of those conditions that breed excellence. 1) A strong code of ethics, well defined by the company and its senior leadership team. 2) Walking the talk at the top. A leadership team that believes the code and practices it daily. 3) Continuous reinforcement of ethical behavior by the leaders in the company. Actively practicing the code.

Let’s be reminded that…

“A little integrity is better than any career.”
— Ralph Waldo Emerson

Without ethics, there can be no lasting business leadership. All other leadership traits pale by comparison when measured against the benchmark of ethics. You can be charismatic, smart, powerful, a visionary, a team player, a strong communicator, and have all the other leadership attributes, but if you do not carry the bag of ethics, you will be missing the most important tool that exists.

Now ask yourself… “Am I a Leader?”