Insignificance of Ethics in Leadership

The title of this post might invoke an outraged response, “How can that be?” to the “I knew it!” statement. We like to believe that we are inspired by a leader showing integrity, trust, fairness, and honesty. The premise of this post is that this belief is just a perception not based in reality. In practical life, employees are not really measuring leaders on their ethical behavior. The attribute Integrity is considered irrelevant in evaluating the effectiveness of a leader. I am playing a devil’s advocate here, and statingp my argument for making this statement in this post. I would welcome a counter argument about how ethics is relevant for effective leadership.

The general debate after the financial crises relates to- how could the crises occur when the financial institutions have such high profile leaders, professionally qualified risk managers, and a legal requirement for complying with corporate governance practices. This article would provide some insight on how the financial crises could occur, and there is a major probability of such crises occurring repeatedly, unless we start putting ethics and integrity on the leadership scorecard.

Ethics and integrity are two words that have different meanint to different people. The meaning of these two words also varies according to culture,  law, and individual perception and circumstances. Reading a number of books doesn’t help because each writer has given his or her own interpretation of them. To keep readers on the same page, I am furnishing here the literal meaning of the words as specified in Oxford Dictionary-

Ethic: The principles of conduct governing an individual or group, a set of moral principles and values, the moral uprightness of an action, judgment and the study of the nature and basis of moral principles and judgments.

Integrity: Uncompromising adherence to a code of esp moral or artistic values, the quality of state of being complete or undivided and formal an unimpaired condition; wholeness.

The question is, how were these two attributes or qualities considered by employees, co-workers and bosses when evaluating the effectiveness of a leader?

A. Leadership Effectiveness & Integrity: Wishful Thinking? (A research paper by Robert Hooijberg & Nancy Lane)

A study was conducted by Robert Hooijberg and Nancy Lane in 2005, regarding the significance of integrity in measuring effective leadership. Information regarding leadership styles, values, and effectiveness was collected from bureau chiefs and directors of a state government agency in United States. The bureau chiefs and directors dealt with federal and state regulations, members of state legislature, general public, and business representatives, hence they required a number of leadership attributes. Secondly, they constantly faced situations where integrity was required for decision making and performing their jobs, however could be hard to maintain due to perceived rewards and conflicting interests. The results were accumulated based on 360 degree feedback from juniors, co-workers and bosses. Leadership roles from Quinn’s (1988) Competing Values Framework (CVF) were used to examine the impact of leadership behaviors on effectiveness. Please click on the abovementioned link to refer to details of the report.

Quadrant 1: Task Leadership: Producer & Director Roles
Quadrant 2: Stability Leadership: Coordinator & Monitor Roles
Quadrant 3: People Leadership: Facilitator & Mentor Roles
Quadrant 4: Adaptive Leadership: Innovator & Broker Roles

The effectiveness of the participating managers was assessed on five parameters to assess overall performance: (1) overall managerial success; (2) overall leadership effectiveness; (3) the extent to which the manager meets managerial performance standards; (4) how well he/she performs compared to his/her managerial peers; and (5) how well he/she performs as a role model. These five items were measured on a five-point scale, with high scores indicating higher levels of effectiveness. The four rating groups were self, bosses, peers, and direct reports.

The summary results extract of the research is as follows:

Integrity as an attribute to the total  group of attributes showed 3% to 6% variance in leadership effectiveness. The variance is relatively very small in relevance, which indicates that the attribute is not considered valuable for evaluating leadership effectiveness. 

Secondly, in all four rating groups integrity is associated with honesty, however the rating groups attach other different meanings to integrity.

• The managers in addition to honesty, also associate merit and fairness with integrity.
• Bosses and peers also associate merit with integrity. However, they see fairness as more strongly associated with the Flexibility factor.
• The direct reports, consider fairness as closely associated with integrity and honesty, but not merit. They see merit as more closely associated with the Flexibility factor.

The results indicate integrity and flexibility hold slightly different meanings to different respondent of groups.

For bosses, the goal-orientation leadership role had the strongest association with effectiveness, but there was no association with Integrity. It is further explained that reason one acts with integrity is not to be seen as effective by other parties, but to be able to maintain a degree of self esteem and self respect.

Managers hold different meanings of integrity at conceptual and practical day to day level. They do not consider it conducive to be completely honest without exceptions in the practical working organization. Bosses may not like to hear the truth. This sometimes puts direct reports position in jeopardy and damages relationships.

The four hypothesis of the study show the following results:

Hypothesis 1: All groups – self, direct reports, peers, and bosses – will strongly associate performing multiple leadership roles with effectiveness. The results of the test confirmed this hypothesis.

Goal orientation, monitor and facilitator roles have a significant association with self’s perceptions of leadership effectiveness. That is three out of six roles.

Incase of bosses, peers and direct reports, two of six roles were considered related to effectiveness. However, the two roles were diffferent for all the three catories of statt.Goal orientation and innovator roles have significant associations with direct reports.  Innovator and facilitator roles are singificant for peers. Goal orientation and broker roles are cosndiered significant by bosses. Interestingly, no single leadership role is associated with effectiveness in all four groups. The list below indicates role wise analysis.

• The Innovator role is positively associated with effectiveness for direct reports, and peers.
• The Broker role is only positively associated with effectiveness for bosses.
• The Goal Orientation role is positively associated with effectiveness for self, direct reports and bosses but not for peers.
• The Monitor role is positively associated with effectiveness only for self.
• The Facilitator role is positively associated with effectiveness for self and peers.
• The Mentor role is not associated with effectiveness for any of the raters.

Hypothesis 2: Stated that Integrity has a positive association with effectiveness for all raters, is partially confirmed. Integrity has a positive association with effectiveness for managers and their peers; however, there is no positive association between Integrity and direct reports’ or bosses’ perceptions of effectiveness.

Hypothesis 3: Stated that direct reports will see an especially strong association between integrity and effectiveness, does not receive any support. The study did not find a significant association between integrity and effectiveness, but did find is a statistically significant association between flexibility and effectiveness.

Hypothesis 4: Stated that bosses associate goal-oriented behaviors but not integrity with leadership effectiveness, is confirmed. Indeed, bosses associate broker and goal-oriented behaviors with effectiveness but none of the three values.

Opinions on Leadership

I thought it would be worthwhile to study whether there has been any shift during the centuries in opinions on leadership attributes. The renowned philosophy of Machiavelli and the present day management gurus was worth a look.

In the 15th century, Niccolò Machiavelli in his philosophy of political power and leadership in “The Prince” stated that a leader should appear to be fair and honest and does not dismiss morality, instead, it politically defines “Morality”—as in the criteria for acceptable cruel action—it must be decisive: swift, effective, and short-lived. It states one cannot be simultaneously be loved and feared, so in such a situation it is better to be feared than loved. Machiavelli was aware of the irony of good results coming from evil actions. Prince made the word “Machiavellian” a byword for deceit, despotism, and political manipulation (Extracted from Wikepedia)

Peter F. Drucker stated- “Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.” This very clearly indicates that he considered leadership as goal orientation role instead of a facilitator or mentor role.

Tom Peters in his book “Essentials of Leadership- Inspire, Liberate, Achieve” has listed out 50 good leadership attributes. The 28th attribute “Leaders Engender Trust” is the only one remotely connected to ethics and integrity. He has stated that leaders need to be credible & trustworthy, and he considers it the hardest attribute to acquire. Further on he has stated “I’d not go as far as to say that “Good Leaders”…”never tell a lie”. Roosevelt lied like hell as he evaded the Constitution and edged the United States into World War II. To make it through the maze on the way to the top, leaders must exhibit…shrewdness.” This indicates that Peter’s considers ethics a flexible and adaptable scenario where means to achieve the greater good of the people should not be questioned.

In the last few centuries it appears that leadership attributes for measuring effectiveness have remained the same. However, as now the leaders are more accountable to the public and employees, the overall image of the leader has to be ethical. Considering the USA political scenario of the last decade, Clinton’s image was damaged for personal infidelities, and Bush’s image took a beating for initiating war in Iraq on incorrect grounds while being fully aware that Iraq did not have nuclear weapons. In my opinion, neither was above lying to the public for maintaining personal power and position and both were considered effective leaders.

Case Study on British Petroleum

In the recent past we have seen the financial crises which raised questions on the ethical practices of well reputed organizations and the moral character of C-suite executives. The present debacle of BP Deepwater Horizon oil spill due to an explosion in one of the wells on 20 April 2010, caused the largest environmental damage, raises a question on the ethical practices followed by the organization. Reactions of Tony Hayword, CEO can best be described as ducking responsibility, complacent, downplaying the incident. Public outrage and President Obama’s intervention got the senior management to present a more concerned public image and thereby issuing politically correct statements.

With British petroleum it is not the first time a problem has occurred, and previously has been named as a most polluting company. Various charges included, illegal dumping of hazardous wastes, contravention of human rights, environmental and safety concerns.

2007–2010 Refinery safety violations (extract from wikepedia) : Under scrutiny after the Texas City Refinery explosion, two BP-owned refineries in Texas City, Texas, and Toledo, Ohio, were responsible for 97 percent (829 of 851) of willful safety violations by oil refiners between June 2007 and February 2010, as determined by inspections by the Occupational Safety and Health Administration. Jordan Barab, deputy assistant secretary of labour at OSHA, said “The only thing you can conclude is that BP has a serious, systemic safety problem in their company”

BP Code of Conduct   available on their site is titled: Our Commitment to Integrity. The relevant extracts are as follows:

The BP code of conduct stands for a fundamental BP commitment– to comply with all applicable legal requirements and the high ethical standards set out in this code – wherever we operate. To help us meet this commitment, the code defines what BP expects of its businesses and people regardless of location or background. It provides both guidance in key areas and references to more detailed standards, instructions and processes for further direction.

The BP compliance and ethics programme– The BP code of conduct is more than just a description of our business conduct standards. It is the centre-piece of a group-wide compliance and ethics programme supported by our directors and senior leadership to promote a positive, ethical work environment for all employees.

It is abundantly clear from the past and recent incidents, that British Petroleum ethics and compliance practices were paper driven instead of being truly implemented in spirit. The top management did not hold itself accountable to practices laid out in its code of ethics, hence the possibility of juniors holding it in high regard is low.

Considering the wide variety of scenarios, it appears that integrity and ethics as attributes are not considered valuable for leadership effectiveness. These attributes may not add anything significantly to the career graph, and may also be considered a deterrent for growth to C-level. The challenge is that if leaders are not measured for these attributes, there is no motivation for incorporating them in their professional behavior or within the organization. Hence, the possibility of public viewing failures periodically due to unethical practices followed by leaders is high.

The trend needs to be changed and maybe the public needs to show some tough love to their leaders. Of course we could ask the management gurus to influence the leaders and hold ethics in higher regard as an attribute. How do you believe that leaders can be held accountable for integrity and ethics? Welcome your thoughts on the subject.