Leadership Insights
Is Ethical Leadership a Sustainable Ideology?
7 min read
The concept of ethical leadership has gained traction as a new generation of employees demand more from the organizations they work for. In a world where the concept of ‘virtue signaling’ is increasingly scrutinized, has ethical leadership reached its conclusion, or is it evolving? How can Corporate Affairs Directors ensure ethics are embedded within organizational practices?
Corporate Affairs – the moral compass
Corporate affairs has long been viewed as the “moral compass of business”, states Lucy Yurek, Group Head of Communications at Rio Tinto. Ethics has always been integral to her role – including promoting good governance and championing ethical behavior towards employees, customers, and shareholders.
Miranda Higham, Director of Corporate Relations at Channel 4 agrees that “ethics and values are at the heart of corporate affairs roles because companies speak through their actions. Stakeholders look to business for innovation, jobs and help growing the economy. So being clear about an organization’s purpose, values and strategy is essential”.
Charlotte Cool, formerly with Compass Group, exemplifies this ethos. She addressed the treatment of migrant workers in the Middle East highlighting activists’ concerns to her Chief Executive, prioritizing ethical considerations over cost implications. This intervention helped manage reputational risk but also continued to improve conditions for workers, reflecting Compass as a premium operator in the region.
Navigating polarizing issues
There has been increasing pressure for corporate advocacy on a range of non-corporate issues. Alison Taylor states in Higher Ground: How Business Can Do the Right Thing in a Turbulent World; ‘The messy reality is that employee and corporate speech have intersected in ways that make internal organizational conflict inevitable’. Businesses can’t weigh in on every issue that employees care about – but they can create a culture of open dialog and ethical transparency.
Rob Hall, Director of Communications at the Home Office in the UK government, notes that ethics in leadership is particularly important in the public sector, where values and purpose are central to operational delivery, policy making and building public trust. This provides a complex backdrop for navigating sometimes opposing views. Rob commented: “The work of the Home Office is really important. We lead on immigration, crime, national security. It's tough, it is contested, people come at the issues from very different perspectives”.
Rob looks for domains that can unify, connect and build confidence.
There’s a really important role for Civil Service comms in showing how the government is making a difference to people’s lives. People agree that they want the system to work properly. They want public administration to be well run. They want it to be fair.
At Channel 4, differences can exist between their editorial voice and Channel 4’s position as an employer: Miranda noted that “as a public service streamer, with a clear mandate to provide duly impartial content and represent unheard voices, our editorial voice is central to our purpose. That allows us to navigate different preferences as an employer while remaining true to our values”.
The ability to deliver reasoned advice is crucial. Lucy Yurek noted that at Rio Tinto, team members can become isolated if their advice is perceived as overly critical, or if they are seen as “getting on their soapbox”.
When it comes to making a statement, “context is everything and relevance is critical”, said Yurek. “I think there is a correction happening. We're realizing that if we're not careful, particularly if you're a large and international organization, you are asked to comment on everything and that's simply not possible. Instead of taking a leadership role [around all social issues] we are aiming to show tangible support to employees and stakeholders.”
Is there a cost benefit to ethical leadership?
Charlotte joined Asda as Corporate Affairs Director at the start of the equal pay litigation with Leigh Day. Her advice was to show leadership and settle with female employees. Asda decided to fight and the court case rumbles on many years later, impacting Asda’s reputation and with a likely hefty payout still to come.
Charlotte has spent much time advising CEOs on the implication of making ethical decisions which may contradict legal advice. In her current role as Chief Corporate Affairs Officer at the Post Office, Charlotte is helping the business shift its response to the Horizon scandal from a purely legalistic approach to a more holistic one so that it can rebuild trust and accelerate its commercial turnaround.
Ethical leadership may not directly link to profitability; however it undoubtedly builds trust with customers and stakeholders and promotes employee engagement, all of which can deflect media attacks in times of crisis.
There is a more obvious link between misjudging public sentiment and lost revenue, where businesses position themselves in a way that is at odds with their customers. Regardless of protecting loss or enhancing profit, Corporate Affairs Directors play a critical role advising on a range of issues which protect shareholders interests.
The concept of ethical leadership may evolve but the underlying principles - transparency, accountability, good governance and social responsibility remain central to business success. Given the complexity of geo-politics and polarizing nature of the media, Corporate Affairs Directors continue to be an essential advisor to CEO’s and Board, using judgment, instinct and stakeholder insight to support ethical decision making.
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