Role models and muddy ripples: How can business leaders regain the moral high ground?
At what level does your business earn its legitimacy? How high should your supervisory board and C-suite team set the moral bar? Are you happy to comply with the letter of the law, and practice ‘minimal disclosure’ - even exposing your organization to legal risk (and regrettable decisions) by deliberately exploiting legal loopholes?
Or should your business take ‘moral responsibility’ – radical transparency in line with the best corporate governance practices?
How about a still higher approach: aligning KPIs with socio-ethical concerns, based on a clearly communicated and facilitated organizational purpose? Installing an atmosphere of positive risk and trust?
Where do you stand?
We propose a 4-level scale.
- Level 4: moral excellence, aiming higher than the letter and spirit of the law.
- Level 3: moral responsibility, obeying the letter and the spirit of the law.
- Level 2: legal compliance, obeying the letter of the law only.
- Level 1: legal risk, actively exploiting legal loopholes.
Far from exercising moral excellence, too many world leaders are operating below the moral line today, say the senior Amrop Partners we interviewed for our new series ‘Wise Leadership in a Wild World.’
A vacuum of role models has emerged. Political conduct is eroding norms of respect, accountability, and trust. Disrespect for the rules is spilling into business, normalizing poor conduct, undermining trust, and creating a hostile economic ecosystem.
“There is no accountability,” says Fredy Hausammann, Amrop’s Global Chair. “Political leaders were once role models for business leaders and society. Where do we get our guidance now? Some company leaders still practice wise leadership, but the picture has become fuzzy.”
The disrespect for social rules in global politics is infectious. “It signals to people with less wisdom that it is legitimate to lead without respect, reliability, or trustworthiness.
"All the ingredients of wise leadership have been violated. This is a big threat to businesses and society. Today’s global economic ecosystem is a theatre of war, with real and business battlefields. Poor conduct in global trade, including rule violations, have become the flavor of recent years.”
“These leaders create so many ripple effects. The most unpredictable things can happen at any time,” adds Jimmy Chen, Managing Partner of Amrop in China.
Juan-Pablo Román, Managing Partner of Amrop in Chile, agrees. “Everything depends on the person in charge. The current situation shows what happens when there is a lack of wise and purposeful leadership. Politics influence the decisions of companies and executives.” Sustainable leadership is key to a positive ripple effect. “For mid- and long-term continuity, it means interacting not only with business, but with communities and the environment.”
Preety Kumar is the Managing Partner of Amrop in India. She sees another problem. Any decision-making – let alone wise decision-making - demands an unerring awareness of developments outside the boardroom walls. But the mass exploitation of social media by unscrupulous governments, political parties and leaders makes it difficult to tell fact from propaganda.
When it comes to customer perceptions (and voting preferences), slipping educational standards make it all the easier to manipulate unsuspecting audiences, warns Juan-Pablo Román. Business leaders will find it increasingly difficult to rise above the noise of these echo chambers.
In world fraught with dilemmas and doubt, moral disorientation is spreading. You can calibrate your position on the moral scale by testing recent decisions against four questions: Did we merely avoid illegality, honor both the letter and spirit of the law, accept responsibility for wider consequences, or deliberately create value for society as well as the business?
How can organizations integrate the thinking and practice into talent strategy, board and executive hiring?
Top teams should seek independent challenge, compare incentives and KPIs with the organization’s stated purpose, seek candid stakeholder feedback, publish the gaps, and set time-bound actions for improvement.
Moral legitimacy matters because authority based on position or compliance alone is fragile.
When conduct is consistently transparent, accountable and aligned with a credible purpose, leaders earn the trust that enables people to follow difficult decisions, strengthens resilience, protects reputation and creates a positive ripple effect beyond the organization. One that rises above the new political normal.
Read our full report:
Wise Leadership in a Wild World - Part 2: Stability in the Crosswinds.
Read the full report
Is there still case for wisdom?
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