Leadership on ethics is one of the most important factors influencing the trust that clients have in a firm. And that trust will drive growth. Getting that leadership on ethics right requires a clear ethical vision. So how do insurance executives craft that ethical vision?
It’s important that leaders have a clear ethical vision, because there’s no point leading on ethics if you can’t direct people in the ethical direction you want them to take. An explanation of why you want them to take that direction always helps too.
And within a regulated sector like insurance, every senior executive is accountable for all those ethical things like fairness, honesty and integrity. This makes an ethical vision pretty much mandatory if you want to actively manage the trust people have in your firm, rather than just let it happen.
Building an Ethical Vision
Here are twelve steps to building a good ethical vision:
1) it has to look ahead, but not too far ahead. It’s a vision of what the firm needs to achieve on ethics over a two to three year horizon. Much more than that and there’s a risk of a loss of focus. Less than that and it’s hardly a vision. After three years, you can refresh and realign it to reflect what your firm has reached.
2) It should address the ethical challenges that your firm will be facing over that two to three year horizon. This means that it has to be both a vision that people can aspire to and something that’s in touch with reality. It uses the reality of what the firm is facing now to envision how things will look when those challenges have been addressed.
3) It should draw upon a diverse pool of opinion. The danger is that it draws upon what the firm’s leadership team would like for the firm, without connecting into a wider reality about the challenges the firm is facing. So creating a clear ethical vision is just as much about listening, as it is about finding the right set of clever words.
4) It should matter in some way to those in charge of a firm. Leadership on many things is influenced by our past experiences, and drawing on those past experiences can be powerful motivation. People recognise and respond to this type of commitment.
5) And people in a firm will respond even more to an ethical vision if it is capable of being converted into a response on a function by function basis. So an underwriter should be able to look at an ethical vision and see what she can do in support of it.
6) A clear ethical vision has to tread a fine line between starting life as the initiative of a particular chief executive, and quickly evolving into something adopted and owned by the wider firm. The two dangers are that it is so personal that it fails to resonate enough with people in the firm, or that it is so impersonal that senior people don’t feel motivated enough to give it continued support.
7) It should be relatively simple. Visions need to be clear, and complexity kills clarity. This could mean focusing on fewer things than a leader would like.
8) The ethical vision should also be something that a firm’s leadership should be comfortable talking about. Sustaining an ethical vision means talking about it on regular occasions, and if someone is struggling with the language of ethics, then that ethical vision will falter.
9) It should reflect the reality of where the firm currently stands, where it has to get to, and how urgently it needs to get there. Ethical visions need to have at least one foot on the ground, in touch with what the firm needs to achieve.
10) And ethical visions that are in some way engaging are going to be well received. It should be phrased so that people feel drawn into it, rather than feel like they’re having an admonishing finger waved at them.
11) Every firm should feel able and willing, if called upon, to share their ethical vision with a wider audience. That might not always be the public per se, but would certainly include key audiences like non-executive directors, leading investors, partners and suppliers, key clients and the regulator.
12) And finally, the ethical vision needs in some way to be measurable. This need not be numerically; a good qualitative yardstick can be just as effective. This is needed because in having a two to three year horizon, you need to be able to fashion a further ethical vision upon some estimation of how the previous one went. Equally, getting people to continue to engage with your ethical vision will be helped by being able to give them feedback on the progress it is making.
Some people may question whether ethical visions and their like just get in the way of doing business. The connection between an ethical vision and the trust people have in a firm is one way of responding. I often like to remind those questioning in this way that that most revered of economists, Adam Smith, just happened to be the Professor of Moral Philosophy at Glasgow University. Doing business and having a clear ethical vision for that business are mutually supportive.
So what ethical vision has been set for your firm, and what are you doing in support of it?