Nov 26, 2013 2 min read

Ethical leadership requires more than just ‘tone from the top’

When we talk about ethical leadership, there’s a tendency to think of this as the unique preserve of those in the ‘C suite’. And it’s certainly true that chief executives, chief financial officers and the like exert an enormous influence over their firm’s capacity to take ethics into account when making decisions. It is however also true that in many organisations, outwith of the occasional staff circular, the typical employee never sees or hears from their CEO or CFO. Such executives also spend far less time on average at their firm than the typical manager or employee.  So how can ethical leadership really start to make a lasting difference then?

A good starting point is to recognise that ethical leadership needs to be shown not just by top executives, but by managers and supervisors as well. Important as the ‘big decisions’ are, the many ‘little decisions’ (but still decisions nevertheless!) count too, especially as they are often a lot more visible and immediate to the many employees watching. Anyone with responsibility for others needs to know what ethical leadership looks like and how to apply it. To ‘tone from the top’ needs to be added ‘tone from the middle’.

So, how do you enable all those in a position of responsibility for others to factor ethics into the decisions they take? Training helps of course, but it’s not enough. The magic ingredients are something that those in the C suite are in a unique position to deliver.

Firstly, top executives have to shape their organisation’s working environment (think of policies, processes and culture) so as to make it as straightforward as possible for those managers and supervisors to take ethics into account. It’s a responsibility akin to designing, building and maintaining the ethical architecture of their firm. And secondly, top executives need to set a clear and strong example of how to put ethical decision making into practice, especially around those tough decisions that all those middle managers are watching. In essence, they must act as enablers and as role models.

There’s a habit amongst the chief executives of some business sectors (and I’d count insurance amongst them) to assume that their personal commitment to honesty and integrity will be enough to fulfil their role as the ethical architects of their firm, as the role models for others to follow. This is invariably over-optimistic and probably responsible for some of the problems associated with those ‘warning signs’ outlined in this earlier blog post. Ethical leadership relies on particular knowledge and skills, to turn that personal commitment to ‘doing the right thing’ into qualities and capabilities to build a lasting and substantive ethical legacy within a firm.

What knowledge and skills then? More on that in the next post.

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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