Mar 5, 2014 3 min read

Wanted: a renewal of ethical leadership from the UK insurance sector

I believe one of the biggest challenges facing the UK insurance sector lies in the amount of ethical leadership that is being delivered. And it is a challenge that has to be faced because of the amount of change happening in the sector: change driven by the regulator, and change driven by new ways of working. Both will result in new ways of engaging with consumers. And it’s when you build new ways of engaging with consumers that ethical leadership can have the most impact.

This is not asking for UK insurance firms to be lead by a bunch of angels. A sector revitalised with ethical leadership will be just as fiercely competitive as now and just as determined to outshine peers on service and products. What a renewal of ethical leadership will bring about is a closer alignment between what we think of this sector with what the public thinks of it.

So what can those in charge of insurance in the UK do differently to deliver greater ethical leadership?  Here are five suggestions:

Number 1. You need to understand the language of ethics  because you can’t lead on ethics unless you can speak that language. Understanding the language of ethics means not just learning the language, but practicing it as well. There’s no point learning about, say, privacy and consent and then leaving the first time you talk about them in any depth to an interview with a reporter looking for a story.

Number 2.  You need to craft a clear ethical vision for your firm because you can’t lead on ethics unless you know where you’re going. And in shaping that clear ethical vision, you need to acknowledge the ethical risks that your business faces. This could be one of the most challenging steps towards ethical leadership, for you can only grasp the true scope and depth of those ethical risks by reflecting hard on how your firm goes about its work.

Number 3.   You need to be good at shaping the way in which your people make decisions because your ethical vision will be dead in the water unless you’re able to influence the ethical culture within your firm. Your ethical vision and the firm’s ethical culture need to be in sync. If they’re not, then your ethical vision will always play second fiddle. Remember that culture beats strategy, every time.

Number 4.   You need to remove the ethical hurdles that get in the way of your people making the right decisions because your people will need help from time to time taking some tough decisions in line with your ethical vision. You need to be there for people when those tough decisions come up, for ethical leadership is much more than a set of performance numbers. It’s a real ‘hearts and minds’ issue that will have your name on the tin.

Number 5.   You need to set an example  because if you don’t, people will take the cue and not bother either. Of course, there’s no point setting an example unless you’re going to let people know about it. You need to spread the message; tell them the good news and acknowledge the bad news. Being seen as open and honest about difficult issues is one reason why leaders attract followers.

So what do these five points add up to?

You can look around your firm today and know that you’re all good people, and that’s great, but it’s not enough. Remember that most misconduct in corporate settings is not done by bad people doing bad things, but by good people making bad choices, usually when working under pressure or when allowed to get away with excuses.

Ethical leadership tackles those causes of misconduct head on. It sets the ethical vision and builds the means by which to achieve it. And it’s that vision and the willingness to roll up one’s sleeves and deliver it that distinguishes a true leader from someone who is just good at managing things.

So I repeat my earlier call: there needs to a renewal of ethical leadership from the UK insurance sector.

Duncan Minty
Duncan Minty
Duncan has been researching and writing about ethics in insurance for over 20 years. As a Chartered Insurance Practitioner, he combines market knowledge with a strong and independent radar on ethics.
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