The need to build ‘moral values’ in Corporate leadership…

Economy, Industry News, People, Work Place Competencies

“Only Morality in our actions can give beauty and dignity to our life” – Albert Einstein

A leading industrialist has been in the news lately regarding his company’s massive debt to Indian Banks and withholding salary to employees. The story of a great brand and a conglomerate on the verge of bankruptcy while the owner is supposedly ‘on the run’… a topic of news headlines and discussion!

Interestingly, while the organization has been struggling to pay salaries or repay debts, the owner has ostensibly been living a lavish lifestyle in his luxurious homes across the globe.

From an ethical (and legal/business) point of view, the corporate may have valid reasons to hold salaries or default on loan payments, but the public indignation is more around the seemingly ostentatious living of the owner.

This case highlights the crucial difference between Ethics and Morality and further, the consequences of poor morality in an ‘ethically compliant’ environment.

What is the difference between Ethics and Morality?  Let’s look at  a few examples to understand the difference.

A lawyer who is defending a murderer, would (from an ethical perspective) put in her best efforts to save him, but may feel it wrong (from a moral perspective) as she abhors the idea of killing another human.

Another example could be of a policeman, who (ethically) would imprison a young wife who killed her drunk and violent husband, but morally would feel bad about doing it.

In the corporate world, a boss who is promoting a high performing manager is ethically correct (as per guidelines/culture of his organization) but might be morally pained (as the performer displays impolite behavior towards his team members, which the boss believes is totally wrong).

Usually, Ethics is understood as the ‘code of conduct’ which is socially acceptable and sustaining, ensuring justice, equality and humanity. Ethical guidelines are common for a family, group, organizations or society.

Morality, on the other hand, is a very ‘internal’ perspective of right and wrong and may differ from person to person.

Both of them essentially guide us to act in a just, humane and correct way. The only difference is that adhering to ethics satisfies society, while adhering to morals satisfies our conscience.

In many cases, morality may be ‘bound by a higher covenant’ inspiring the person to help someone beyond ethical expectations. On the other hand, someone may be ‘morally corrupt’, being restrained by rules of ethics enforced by society to behave correctly.

When an industrialist is living a lavish life while the employees of his organization are suffering (as they have not received their salary  for months),  the company  might be ethically compliant as acceptable by law, but it does reveal the ‘moral bankruptcy’ of the leader.

Ethics has been a buzz word in Corporates for a long time. Most regulations and restrictions, as instituted by Governments and regulatory bodies, have ensured ethical operations by organizations and individuals. On the other hand, morality has usually been seen as a ‘personal space’ of individuals, which may not be influenced by the organization. Thus for every individual, there might be a conflict between his morals (personal compass) and ethical expectations of his organization or society (public), and he would seek ways to align both of them.

To give an interesting example, for some people payment of tax is ‘ethically correct’ (public face) but morally wrong (personal view) and so they are continually seeking the ‘grey areas’ where they could reduce tax payout without being punished for it.

Society usually progresses when a significant percentage of members have morals  which are nobler than the ethical rules of their family, group, organization or societyThis becomes all the more critical for leaders.

Corporate India has had shining examples of such leaders like JRD TATA, Narayan Murthy, Azim Premji to name a few.

But as in the case of the ‘absconding’ owner of the large conglomerate, such blatant cases of ‘moral corruption’ in the corporate world are truly dismal and could have far reaching impact on our corporate culture and society.

In positions of absolute power, owners and top leaders of corporates could be seriously handicapped if their ‘moral ground’ is lower than the ethical guidelines of the organization or society. Their immoral behavior (and decisions) could have a ripple effect on the employees, vendors, customers and even families of employees, impacting society in the long term.

Organizations may need to help their key leaders develop their ‘moral compass’ which would stand at a higher level than the ethical expectations of the organization.

As a quick check, some key questions any leader could ask herself are:

  1. Which are the ethical guidelines where I am morally aligned? Where am I not aligned? How large is the gap? :  An organization has set an ethical guideline of ‘no bribes’, but a leader might be morally fine with a little ‘greasing of palms’. That could be potentially dangerous for his career. On the other hand, a leader with very high morality on ‘work life balance’ might be pained by the work culture of a startup with 24×7 ‘obsessive’ work. If the moral values are significantly lower they should be corrected immediately with counseling or coaching. For example, a senior leader who treats employees respectfully (as per ethical guidelines at work) but is abusive at home.
  2. Are my morals higher than the ethical expectations? : For senior leaders, their morals (specially related to people or teams) should be loftier than the ethical rules followed by everyone. Only then will they demonstrate inspirational behavior way beyond what is acceptable. For example the CEO, who set aside pressing work to spend some time with a deeply distressed ex-employee or the supervisor whose team member was laid off, and he put in efforts to ensure the team member got another job.
  3. Am I demonstrating the positive difference?  True leadership would be to consistently demonstrate   higher morals to inspire teams, organizations and society. Some of these actions can be path breaking for society. Mr. Narayan murthy was liberal in sharing the stock options of Infosys with his management team and many other employees. This was a decision taken from morals which were significantly nobler than the ethics of business. But it set a benchmark for many others to follow.

Though ethics and compliance will continue to drive best practices in the corporate world, it would be important for top leaders to enhance their moral compass and build a ‘nobler perspective’ while taking decisions and driving action.

Look forward to comments and feedback !

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