Have you seen Netflix’s Smartest Guys in the Room? It’s based on McLean & Elkind's 2003 book of the same name that chronicles the rise and fall of Enron. It’s a fascinating story of ambition, greed, and a complete lack of an ethical compass. At the same time that Enron's leaders were preaching to their employees about doing the right thing, they were doing every wrong thing you could imagine. It started with their mark-to-market accounting, and transversed all the way to the their recreational activities as an executive team.
However, Enron is far from being the only culprit in practicing unethical business practices. CNBC has a weekly show called American Greed that profiles some of the most unethical business practices even seen. The movie Wolf of Wall Street is a fictionalized account of the rise and fall of Stratton Oakmont — the epitome of unethical business practices in the financial services industry. So while it’s easy to point to all these glaring examples and say, "don't do that," it doesn't really answer the question of what an ethical leader does do, especially when faced with situations as outlined above.
Traditionally, ethics has been thought of to mean fair and equitable treatment towards customers, business partners, and even competitors. Recently, that term evolved to include corporation concern regarding topics like corporate social responsibility (CSR) and its impact on the global environment. The question is what does a leader committed to ethical management do when they see ethical issues come to light. This is when real ethical leaders emerge.
A truly ethical leader takes a long-term view of every situation, and looks for solutions that provide the most good to the most people, regardless of short term pain or public opinion. Truly ethical leaders do the right thing regardless of who is watching. Most importantly, the do it when no one is watching. They do the right thing not because they are forced to, but because they know they should.
About the Author
Jimmy Brown, Ph.D. is a senior level management consultant with eighteen years of experience leading efforts to develop and implement practical strategies for business performance improvement. Dr. Brown has held senior level consulting positions at leading firms such as Booz-Allen & Hamilton, Accenture and Hewlett-Packard.
He can be reached at www.jimmybrownphd.com or via Twitter @jimmybrownphd
McLean B., & Elkind, P. (2003). The smartest guys in the room: The amazing rise and scandalous fall of Enron. New York, NY: Penguin Group.
Ormiston, M. E., & Wong, E. M. (2013). License to ill: The effects of corporate social responsibility and CEO moral identity on corporate social irresponsibility. Personnel Psychology, 66(4), 861
Tarantola, D. (2013). Thinking locally, acting globally? American Journal of Public Health, 103(11), 1926.