by Andrew Leigh, Featured Contributor
Leaders sometimes speak up. Ethical business leaders most definitely speak up, though not enough do.
A sure way to fail as a leader in today’s demanding corporate environment is to keep quiet when you should be doing the opposite.
Speak up about what though? How far should progressive business leaders go in sharing wide-ranging ethical concerns—that is, ones extending beyond their immediate sphere of influence within their company?
Most business leaders probably feel reasonably confident speaking about their own company. This is not necessarily true when it comes to wide-ranging society concerns. These might include: sustainability; slavery, poverty, inequality, a healthy life style, or even broader ones, such as the fate of our entire planet—now hurtling in slow motion towards mass extinctions and possible termination of the human race.
Climate change is a useful touchstone for what it means to be an ethical business leader—that is, someone who speaks up about doing what’s right, taking a longer term view, and driven by core values.
Relatively few business leaders regard talking publicly about climate change as their remit, and then matching their organisational actions to their words. An exception in 2014 was when seven big US food companies combined to warn shareholders about the threat of climate change to their investment prospects.
Most recently, to the delight of those who care about the fate of the earth, and rather belatedly in the view of some, in May 2015 Bank of America one the world’s largest financial institutions, accepted it has a
Shortly afterwards the bank indicated it would no longer fund the coal industry’s destructive environmental practices.
In contrast, Shell’s CEO has spoken publicly about his acceptance of independent studies showing dangerous levels of global warming will occur unless CO2 is buried or reserves are kept in the ground.
Yet simultaneously, this same CEO is steering his company’s relentless search for yet more oil in places where damage to the environment is a serious prospect.
It is also extraordinarily myopic and the opposite of what ethical leadership is about—doing what’s right for the long term.
No wonder this particular CEO has publicly confessed the decision about drilling in the Alaskan Arctic took him on a “personal journey”.
Pity this journey ended at the wrong destination. Shell’s ethically challenged CEO is hardly alone though in trying to ride two horses at once, each pulling in different directions.
For example, take the senior leadership of Barclays, the world’s biggest financier of mountain top removal (MTR)—cheaper than mining for coal. Until recently, the bank enthusiastically loaned half a billion dollars to companies indulging in this deplorable practice.
In the US, an amazing 500 mountaintops have already been destroyed in this way. More than one million acres of forest have been clear-cut. Over a thousand miles of valley streams have been buried under tons of rubble, polluting drinking water and threatening the health and safety of all who make their home in the region.
But in March this year the bank’s leadership finally reversed its position and actually spoke up. Later, so did the leadership of the Bank of America.
While still too few business leaders willingly speak out about climate change, plenty seem willing to sign up to the UN List of Caring for Climate Signatories.
Likewise, relatively few business leaders appear ready to speak up about other major national and global ethical issues that go beyond their immediate commercial sphere of influence.
Curiously, in a country long hostile to public debate, a handful of Chinese executives are now raising their voices on social and political issues to burnish their reputations. Many are seeking ways to develop their brands with social messages, ranging from one child policy to gay marriage.
Pronouncing in public on issues beyond one’s immediate commercial interests can seem daunting.
Apart from the common terror of public speaking and stage fright, leaders may also hesitate in case they: squander credibility, reveal ignorance, attract criticism, lose respect, or offer hostages to fortune.
While all these can, and sometimes do occur, they can be minimised or avoided entirely, if necessary with professional help.
Several conditions need to exist for the average business leader to speak up about ethical issues that go beyond the company’s own turf:
1) Size: the issue must be large, affecting many people, often on a national or global scale
2) Connection: the leader must see some positive connection between speaking up and benefiting his or her company
3) Values: the leader should be able to draw on their own wish to do the right thing, and share their own ethical values
4) Courage: the leader must have the character to speak up, giving a lead— showing the way for others to follow.
The bigger the issue the more a leader may feel compelled to speak up; equally its high profile may also deter any public stance. There may be a natural reluctance to get involved. Will it be handing others a hostage to fortune, as for instance the CEO of Shell has clearly done?
Nor is there any point in speaking up without some positive link, no matter how tenuous between the issue and the company itself.
In speaking up about climate change, for example, many business leaders can see a direct relevance to their company’s long-term ability to survive in a world where excessive chaos and uncertainty become seriously damaging to its interests. Equally they may feel speaking up will enhance their brand in some way.
Readiness to speak up also relies on the leader feeling able to share share personal values and not just rely on broad statements of good intentions.
Those who do speak up need to both be and sound authentic. This means doing more than say, signing pledges, or talking in generalities. Instead, they need to feel confident in drawing on personal values, about why action is desirable and share what they’re personally going to do about it.
Finally, it takes courage for even self-assured leaders to speak up about broad brush issues such as climate change, slavery or environmental destruction. This is why character is proving so important in current forms of leadership development.
Although Bill Gates is hardly a conventional business person any more, his recent wide ranging public pronouncements on new forms of energy have attracted attention. They are both visionary and set an example for other business leaders.
True Gates is now a philanthropist and no longer commands a company, never the less it takes a certain kind of courage to step forward and openly challenge many of the complacent behaviours in our society around climate change and renewables.
Silence is damaging
Business leadership manifestly failed in the crisis year of 2008. Many senior executives knew there was a tidal wave of bad risks happening under their watch. Yet few if any had the courage or or confidence to speak up.
These leaders knowingly permitted actions devoid of integrity to flourish. They stayed oblivious to the harm caused to others or the societies in which they operated. Some became rich at the expense of millions, who were the victims of the financial crisis and subsequent recession.
Even now, many of these same leaders remain unable or unwilling to accept any degree of responsibility for their actions.
When it comes to ethical issues in business what particularly matters is “do you speak up when the company’s reputation becomes at risk through unethical behaviour?” Executives at News Corp for example, turned damagingly silent when they permitted unethical practices to flourish in their media empire.
While the harm caused from silence in the face of unethical behaviour applies to all employees, it matters even more with leaders. They set the tone and their silence can generate and later sustain an organisational cancer.
An alarming three out of four employees for example, stay silent when they see gross ethical violations. What about their leaders? The proportion may be even higher. The result is compromises become conspiracies and peccadillos become policies. This can only happen when early transgressions are met with silence.
When researchers asked people why they don’t speak up, the common responses included:
• It might damage my career.
• It would have made the offender harder to work with.
• I didn’t think I would be taken seriously.
• I wasn’t sure how to bring up my concerns.
While these results apply to all employees, they have particular lessons for how we develop those who guide the future of a company.
Leaders must learn that it’s not just the big occasions where you show ethical leadership. It’s also the little ones, in casual conversations in elevators, in phone calls, and the many minor interactions that happen in every day life.
The rise of individualism in business partly explains why self interest may prevent a leader speaking up about the big issues.
And with the high turnover of CEOs, each arriving with a different vision and fresh demands, it is hardly surprising many resist exposing themselves to the dangers in case they: squander credibility, reveal ignorance, attract criticism, lose respect, or offer hostages to fortune.
Speaking up is learnable
Despite these countervailing forces leaders can learn to speak up about ethical issues.
There is already much happening in some organisations to assist those at the top grow the courage, confidence and understanding to do so. Research and practical experience suggest three essential factors play a part in promoting new learning about speaking up:
Confidence: help for managers and leaders should not just deal with the basics of public speaking, but also help them explore what it means to choose to talk publicly about a broad ranging issue such as climate change, poverty and so on.
Practice: speaking up about ethical issues needs to made into a habit. This means creating regular opportunities to rehearse how one talks for example, about values, explain clearly why they matter and using interesting stories share where they are being played out within the organisation and beyond.
Speaking up inspires: When business leaders have the courage to come forward to speak up about broad issues such as climate change that affects millions, they build not only their own profile and that of their company, they also inspire employee engagement and attract potential new ones too.
Sales people often learn to practice their message using a script. This can help them become more fluent in talking about products or services, and learn to deal with objections and tough questions from customers.
Much the same approach works with leaders who want to speak up about broad brush ethical concerns. They too can benefit by at least initially using a pre-arranged script; later they can move on to improvising, drawing on their own resources for communication.
Rehearsals for speaking up also demands a safe place in which to experiment and “hear oneself” talking about ethical concerns.
It also develops a leader’s social and emotional intelligence so he or she can find how best to actually speak about the relevant issue. Creating this safe space though can be harder than it looks and may require specialist expertise.
- R. Edward Freeman and L. Stewart , Developing Ethical Leadership, Institute for Corporate Ethics, 2006
- Caring for climate: tomorrow’s leadership today, UN Global Compact Office, July 2007
- Releasing Voice for Sustainable Business Success, Report from IPA and Tomorrow’s Company Nov 2012
- J. Grenny, We Should Speak Up About Ethical Violations More Often, Harvard Business Review, Jan 2014
- E. Aitken, Coca Cola, Heinz And Other Major Food Companies Warn Climate Change Threatens Business, Climate Progress, 15 Sept 2014
- Business bosses should speak out against ‘anti-sustainability rhetoric’, Guardian 4 Feb 2015
- T. Macalister and D. Carrington Shell boss endorses warnings about fossil fuels and climate change, Guardian 22 May, 2015
- J. Shankleman, Bank of America turns back on coal mining industry in bid to tackle climate change, Business Green 07 May 2015; also K. Sheppard, Bank of America Backs Away From Funding Coal Mining, 5 June, 2015
- L. Burkitt, Chinese Executives Start Taking Stands on Social Issues, Wall Street Journal, 8 April 2015
- C.Adam, Gates calls for investment in new forms of energy, Financial Times, 26 June 2015