Ethical Leadership. Case study of Rolls-Royce and HalalGuide.

This article will discuss ethical leadership and how it became a hot topic in today’s society. Organisations can make both ethical and non-ethical impacts based on their role modelling, communication and disciplinary measures which are three very important elements every leader should use. This blog post assesses how an individual can positively affect the organisation. I will also provide an example of a leader that failed to create an ethical culture because of the lack and misuse of the three elements previously mentioned. The goal is to become more educated in ethical leadership and be able to make wiser decisions in all aspects of my life, in my leading or influencing others. I face ethical dilemmas nearly everyday within my current organisations and it is important that these decisions represent strong morality in creating a positive impact on the organisation.

Let’s dive deeper in this topic in order to get a better understanding of the topic presented by academics. According to a Bentley University (Boston) study 86% of millennials main priority to work for a business that conducts ethically. An ethical leadership could have a different meaning to different people, in order to understand what it looks like we must first understand what ethical behaviour actually is. A really simple form of ethical behaviour consists of an individual knowing and doing what is right. The hard part is actually defining exactly what is right depending on a variety of factors such as culture, religion, political spectrum and social economic sectors. Ethics are interpreted differently throughout the world. A lot of sources view ethics and morality as being the same thing, but I am on the side of those that see them differently. Ethics are basically a set of norms in logical philosophical principles; however morals are beliefs religion and cultural values. These are usually principles that are not as logically coherent. It is possible for morality to be the basis of ethics. Knowing this, ethical leaders are people who have to make decisions and lead in an ethical way. An ethical leader derives mainly from being both a moral manager and a moral leader. They put aside their ego and personal interests to support the organisation they are trying to lead. A moral leader is the core of being an ethical leader. For example, if a man is not truly believe in the ethical principles that they are following it will show through eventually. Ethical leaders are usually great at taking feedback and others opinions and using them to make decisions. They understand the power of leadership and don’t abuse it. These people use it well by sharing as much as possible and trying to benefit their fellow employees. This is more important now than ever. According to Forbes the most ethical companies consistently outperform their competitors by 1 to 4 percentage points.

Now that you understand what it takes to be an ethical leader, let us dive into a real-world issues surrounding this topic. The issue I will be discussing is Rolls-Royce and their corruption misconduct that occurred two years ago. To begin Rolls-Royce was thrown into the light two years ago and that light with over 30-years of misconduct in corruption in the report that came out dissecting the organisational failure where were many incidents in which the organisation failed to prevent bribery and used false accounting instead of hold the manager responsible accountable. This of course goes against all of the three aspects I mentioned earlier. This was caused by the poor disciplinary decisions by the management. To avoid, their leaders and directors must make firm decisions. “They need to start with the values: how they want to do their business,” says Philippa Foster Back, director of the Institute of Business Ethics. When it comes to financial targets, “the board needs to say, ‘We will not reach the numbers at any cost’.” All of these things when put together obviously going to be a very poor ethical and moral manager due to a lack of role modelling rewards and discounts and effective communication. It is very clear that the Rolls-Royce lacked the correct ethical culture and the central ethical policies in the past.

Nonetheless, there are many examples of great ethical leaders who build a strong ethical culture within the organisation. One of those individuals is Danil Gubaydullin, a head of global marketing at HalalGuide who I interviewed to discover what being an ethical leader truly embodies. “As you can imagine from marketing standpoint, we are constantly conveying messages to our partners and customers. Two out of our three pillars we operate by which are absolute integrity, accurate information and delivering results, are directly tight into business ethics. Any time we get into situation when things don’t feel right, don’t make sense we walk away from that business. We place ourselves very closely to our values. I am a big believer that you set the example as a leader.”

I want to retrace my steps and hit some key points within the role of an ethical leader. First, it is very important that as a leader you understand the climate you are in. For example, in a non-profit which is built with the purpose not just having to satisfy shareholders that, thus while it does have its own challenges, makes doing the ethical thing easier than someone who must reach goals set by shareholder. This is why in every situation you are in you need to make sure that you are hiring diverse and ethical people below you who share your same values and can also bring a different perspective on the company’s early issues. Next, it is important to have codes in place to set clear standards and expectations. Along with clear consequences for breaking these standards and expectations. Lastly, you as a leader need to be a good role model in your ethical decisions. Your employees should be able to see how you act to shape their values and decisions within your organisation. This means you not only need to always try and do the right thing, but you need to be there for your employees, like Danil Gubaydullin is in the example earlier. Ethical leaders has many shapes and sizes, but you must always discover your values and aim to make your company into an ethical sound environment from those values. It isn’t easy, but with the right mindset and steady doses of hard work you can become an impactful ethical leader.