The Markkula Center for Applied Ethics explores ethical issues in organizational leadership such as corporate governance, role-based ethics and tone at the top. We also address questions of personal ethical leadership.
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Leadership ethics explores the relationships between leaders and followers and provides tools for those in leadership roles to bring ethics forward in organizations. Ann Skeet, senior director of leadership ethics, has developed a leadership model that encourages users to think of their leadership as a practice. It shows how leadership happens on a continuum from the personal to the formal, building from a leader’s character and including actions the leader takes, with elements combining to render the impact the leader has.
What is Leadership Ethics?
By Ann Skeet, senior director of Leadership Ethics
Leadership ethics looks at the issues people face when they're in formal leadership roles. It can also be about personal leadership—people’s character and values and how they “show up” in life, which is central to the way they are able to have an impact as leaders.
The issues that come up when you're in a formal leadership role usually have to do with the responsibilities of that role and how you fulfill them. Culture is an important element in how people will behave in their organizational roles, so leaders have an opportunity, as they're creating an organization in its earliest days, to establish ethical ways of doing things that are baked into the organization's future life and practices.
One of the other interesting trends in leadership roles right now is a resurgent attention to stakeholder interests more broadly than just the shareholder interests. People are acknowledging that many things go into shareholder value, so the way employees and customers and communities are treated and the relationships that the organization has with people all matter. In business literature, like the Harvard Business Review, you're starting to see new metrics being used. The ESG ranking, for example, considers factors that aren't just return to the bottom line but also the company’s environmental, social, and governance practices. Governance has really become a tool of strategy. There's a deeper understanding that tone at the top really begins with the Board of Directors.
One of the more interesting challenges that leaders are facing right now is a sort of paradox presented by millennial values. A lot has been written about Generation Y. They seem very interested in promoting and doing good in the world, which actually seems to inform decisions they make about what they purchase and where they work. At the same time, they also seem to have a deep interest in their own life and lifestyle, which sometimes leads to an “it's all about me” attitude. That requires leaders to be creative and think about ways to fulfill both of the things that their future workforce is asking for.
Silicon Valley is a great place to be thinking about ethics. In some ways the Valley is a closed system; there are a lot of interlocking relationships. People who start companies go on to work together, maybe multiple times. You have colleagues who are both competing and cooperating with one another across industries, so there are a lot of issues in terms of whose interests are being protected by leaders in various roles. Some really fascinating changes have been promoted by the very technology that Silicon Valley creates—the data and the other tools that can reveal unethical behavior and help people to have a better understanding of what is really happening in their organization.
Innovation is at the heart of Silicon Valley, and people who start companies here like to try all kinds of new things. That includes how they set up the company in the first place. The ownership structure, the classes of stock—some of these innovations uncouple the risk from the benefit of ownership and the control that traditionally goes with it. In the traditional structure, shareholders can exercise some power with buying and selling of their stock, and boards of directors have multiple levers that they can draw upon in governing the company. Those are changing as ownership structures have changed, which is definitely having implications for companies as they grow.
This article is adapted from the video What Is Leadership Ethics?