Leadership & Ethics – Part 2

Strengthening your ethical decision-making process

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Power utilities, like many other industries, operate in a complex environment that demands substantial ethical character and behaviour from those operating in this arena, but especially from the leaders who direct large procurement processes and set the tone within the organisation. With the increase of high profile fraud scandals and unethical behaviour, globally there has been a renewed focus on ethics and a call for ethical leadership.

"It’s clear that most people have high opinions of their own character and do not realise the substantial gap between how ethical they think they are and how ethical they truly are."

- Tenbrunsel & Bazerman

The definition for ethical leadership, according to the King IV report, encompasses the character and behaviour of the leader, creating an ethical environment within the organisation and operating ethically and sustainably as a corporate citizen. The first principle, provided in the report, to support this definition, is that “the governing body should lead ethically and effectively” by cultivating and exhibiting characteristics and behaviours of ethical leadership. These characteristics and behaviours includes integrity, competence, responsibility, accountability, fairness and transparency. Leadership should exemplify these characteristics “in order to offer effective leadership that result in achieving strategic objectives and positive outcomes over time.” Furthermore, the report calls on governing bodies and leadership to disclose how they are held accountable for displaying ethical behaviour and effective leadership.

This principle highlights that good governance and an ethical culture start with the ethics of those in leadership. Therefore, the scope of this article will be limited to the values and the behaviour of ethical leaders.

Values and Behaviour

Ethical values that are displayed in the behaviour of a leader form the foundation of ethical leadership. The values and behaviour seen in ethical leaders include integrity, honesty, altruism, compassion, fairness, justice, power sharing, clarity on responsibility and expectations, ethical guidance and concern for the environment (Yukl, Mahsud, Hassan & Prussia; Kalshoven, Den Hartog & De Hoogh).

The alignment of values and behaviour of ethical leaders are critical and point to two virtues that are prominent within the ethical leadership literature: integrity and authenticity. Integrity is acting in a way that is consistent and coherent with the values of honesty and justice and modelling ethical behaviour in keeping with laws, principles and values. Authenticity refers to leaders who are self-aware, display self-control, act consistently and behave in accordance to one’s own beliefs and values (Lawton & Pa´ez).

Cultivating Ethical Leadership

We should actively seek to cultivate ethical leadership. The guidelines for cultivating leadership are based on a model developed by Crossan, Mazutis, & Seijts. The model integrates the values and character of the individual with the ethical decision-making process to produce ethical behaviour.

At the centre of the model is the character strength of an individual, displayed through ethical leadership, that is grown by continually acting on ethical decisions and learning from it.

1. Strengthening internal motivation

The triangle at the bottom of the model represents an individual’s values, virtues and traits. Values are defined as the internal guiding principles that motivate a person to act in a certain way, virtues are the moral qualities that a person displays through deliberate action, and traits as a “behavioural disposition” (Crossan et al).

"The moral virtues, then, are produced in us neither by nature nor against nature. Nature, indeed, prepares in us the ground of their reception, but their complete formation is the product of habit."

- Aristotle

These three concepts are intricately linked and create internal motivation for decisions and behaviours. Acting inconsistent with one’s values, virtues and traits creates anxiety and stress. There are two ways to strengthen our internal motivation to reinforce ethical leadership: reflection and habits.

Through reflection, we can define our personal values and boundaries that serve as a moral compass. Additionally, reflection on decisions and actions provide an opportunity to consciously learn from experiences, resulting in increased self-awareness and self-control, deepening of character and strengthened ethical reasoning. Virtues are developed and values are strengthened by forming habits through the “regular repetition of right actions” (Crossan et al).

A value-based model of ethical decision making adapted from In Search of Virtue: The Role of Virtues, Values and Character Strengths in Ethical Decision Making. (Crossan, Mazutis, & Seijts)

2. Understanding and strengthening the ethical decision-making process

The decision-making process used within this model is based on the work of James Rest on moral decision-making that consists of four psychological elements:

AWARENESS is the ability to perceive the ethical dimensions of an issue or situation. Leaders are faced, on a daily basis, with countless decisions. Many times, the ethical considerations of a decision may not be initially apparent, but upon further analysis the ethical implications are undeniable. Without sensitivity towards the ethical implications, we run the risk of inadvertently making unethical decisions.  One of the reasons for a lack of moral awareness is a confirmation bias – a tendency to search for, interpret or recall information in a manner which confirms pre-existing beliefs. The result is in a lack of ethical insight. We must be vigilant to ensure that ethics remain at the forefront of our decision-making.

Ethical awareness can start by listening to our moral intuition.  Psychologists DeSteno and Valdesolo recommends, “When faced with a moral decision, take a few seconds to pause and listen to your inner voices. Is there a hint of guilt, a hint of shame, a gut feeling of unease? If so, don’t ignore it.”  (Prentice)

JUDGEMENT is the ability to decide on an ethical course of action after recognising the ethical dimensions. Making a judgement may be difficult as there could be more than one ethical path (right vs right) or the decision may seem morally defensible as no option may seem morally acceptable (wrong vs wrong). Be it as it may, most unethical decisions made are not the result of ethical ambiguity or ethical ignorance but rather the product of us being oblivious to the psychological, organisational and social influences that “can cause us to make less than optimal ethical choices” (Prentice).

Our ethical decision-making is often automatic based intuition and emotions. Although we should be cognisant of our moral intuition (important for ethical awareness) following our intuition will not automatically lead to making ethical decisions. Our intuition is often wrong and needs to be tested. Our intuition is influenced by a self-serving bias that leads to self-serving decisions which may be unjustifiable to objective third party observers. To overcome this, we should not only try to make ethical decisions but should endeavour for others to perceive our decisions and actions as ethical and objective.

"We judge ourselves by our intentions. And others by their actions."

- Stephen R. Covey

INTENT is the desire to act on the ethical decision made. Although most people think of themselves as good and ethical and would like to make ethical decisions, they would also like the benefit from unethical behaviour. According to Dan Ariely, most people lie and cheat a little “but only up to the level that allows us to retain our self-image as reasonably honest individuals.”  One of the most important reasons that enables good people to make unethical decisions is rationalisation, thereby enabling themselves to justify their actions. We can avoid the rationalisation trap by being more aware of our decision-making process. As rationalisation is a defence mechanism, acknowledging our fears and insecurities that could drive our decision-making will bring awareness of areas where rationalisation may occur more frequently.

BEHAVIOUR is having the motivation and courage to act upon the desire to act on the ethical decision made. Moral awareness, the correctly selected ethical choice and the desire to make an ethical decision does not automatically equate to ethical behaviour. Hannah, Avolio, and May identified three elements that can compel moral action:

  • Moral ownership – the extent to which we feel psychological responsibility over the ethical nature of our actions and those around us.
  • Moral efficacy – the belief in our ability to act ethically in the face of moral adversity and when we feel acting ethically will have no impact or a negative consequence.
  • Moral courage – “a commitment to moral principles, an awareness of the dangers of supporting those principles and a willing endurance of that danger” (Rushworth Kidder).

3. Building a Support Team

The triangle at the top of the model represents the external influence on the individual during the ethical decision-making process through context and interpersonal relationships. Research has shown that this influence should not be underestimated as it has a strong influence on the decision and action taken by individuals, often for the worse and deviant from personal values and convictions (Moore et al, Crossan et al, Trenbrusel et al).

The power of interpersonal relationships can be harnessed for good by creating a support network. Bill George refers to such a network as a support team consisting of a confidant, family members, friends, advisors and mentors. The role of the support team is to keep you anchored in your values,  to ground you in reality, to ask the difficult questions, to bring correction but to also cheer and support you on your leadership journey.

"Strong support teams provide affirmation, advice, perspective, calls for course corrections when needed, and above all, love."

- Bill George

Act Now

  1. Internal: List the values that motivate your decision making
  2. Decision-making: To reduce the likelihood of incrementally eroding your ethics, write down a list of unethical things you will not do to serve as early warning indicators e.g. “I will never blame a co-worker for something that was my fault.”
  3. External: Identify people who can form your support team. Where necessary, make an appointment and ask them to play that role in your life.

Leadership is often a lonely road riddled with complexity. Our professional journey will require us to make ethical decisions that will require courage and sacrifice. We need to foster practices and behaviours that will strengthen our ability to not only make the correct ethical decision but to act on it – to be ethically strong!

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Yukl, G., Mahsud, R., Hassan, S. & Prussia, G.E. 2013. An Improved Measure of Ethical Leadership. Journal of Leadership and Organisational Studies, 20(1): 38-48.


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