Sir,
Thanks to the recent indictment of Jeffrey Skilling, Business Ethics remains the hot topic in business and academia. Even the Harvard Business School is sounding like the parent of a wayward child. In observing Mr Skilling's apparent lack of ethic, was he, they are asking, ethically deficient when we admitted him, in which case, how did we fail to note it, or did he fall off the ethical path after graduation? I'll let Harvard wrestle with that one. One thing is certain. The business pages are full of companies and CEOs that apparently are in need of an ethical refocus.
I have always found the very term interesting. Business Ethics implies a set of ethics that apply only to business. If so, are we acknowledging that certain ethical lapses that we would not tolerate in our personal lives are acceptable in business? The opposite is also a possibility. Are character flaws and ethical lapses evident in private life irrelevant to a CEO's ability to run the business? Either way, the term suggests that adherence to ethics may be selective. Is this the message we wish to convey to the next generation of business leadership?
I know some who are not buying it. I always ask my MBA students to list their favourite leaders and the characteristics they admire. One of the more visible CEOs of recent times has fallen off the list after his highly publicised affair and subsequent divorce. Their response to my prodding is '... somehow, we just don't trust him as much anymore'. I guess Ross Perot had it right when he said 'If your spouse can't trust you, why should I?'
In my view, the issue we should be stressing is the practice of Ethics in Business. After all, it is trust that drives any successful business model and trust is a function of the ethical behaviour of organisational leadership.
This premise is at the foundation of my approach to creating excellence in organisations. The first question I ask when first meeting with the client CEO and the leadership team is this '... is there anyone here who is not a man or woman of intelligence and integrity?' What are they going to say? Yes? I then use their ethics to my advantage.'Good', I say, 'now let's talk about how ethical men and women run a business'. In doing so, I have established a standard against which our actions, decisions and behaviour will be judged from that moment forward.
This initiates a discussion of what it means to be men and women of character. Fundamentally, it means adherence to a value system that permeates the organisational culture. The core values of virtually all successful organisations include integrity, teamwork, respect and responsibility. I then emphasise that those organisations, and leaders, who exemplify them are at an enormous advantage in attracting and keeping the best people and the best customers.
When discussing these values with my MBA students several years ago, one of them gasped and said, '... why those are the same values I teach my children'. Of course, they are — and they are no less applicable in your work family than they are in your home. There is only one set of ethics. Trust is a function of credibility and one cannot be selectively credible. The first time you mislead your people, or compromise the decision-making process to your advantage, you will lose the trust of your organisation. And once lost, it is virtually impossible to regain.
I sit on the boards of two SEC Registrant companies and several private ones. The businesses are in different industries and the CEOs have different personalities. What they have in common, however, is commitment to ethical behaviour. There is no distinction between their personal and professional lives. As board members, we are not left to wonder which way the ethical compass will swing that day. We, and everyone else in their organisations, know the answer.
The compass is firmly fixed on the truth — and that is what ethics in business means. There is no other standard and any behaviour to the contrary is no more acceptable in the boardroom than it would be in your home.
