Among the factors that are pivotal to the creation of an ethical culture, leadership is widely accepted as the most impactful. The increased power and authority that comes with a position of leadership allows leaders to have a greater influence on others, whether by means of decisions, policies or strategy. Added to that, the higher visibility that generally accompanies a leadership role enables them as role models to have a further impact on an even wider audience than their direct followers, to employees across the organisation or citizens in the country.

The ethics of power

Given the extent of the influence, it is pertinent to clarify what constitutes the ethics of power.

The view that “Power tends to corrupt, and absolute power corrupts absolutely” is not new. In fact it was first written in April 1887 by Lord Acton, the English historian, politician and writer. The examples where this has occurred are extensive.

The South Korean president, Park Gun-hye, is currently in the news for being part of a growing corruption scandal, accused of being complicit in a scheme to pressure big companies to donate millions of dollars to funds controlled by a very close friend.

Justin Fendos, a Korean-American professor at Dongseo University in South Korea, ascribes this (and other South Korean scandals such as Hyundai and Samsung) to the Korean preference for loyalty, which he claims undermines the very fabric of Korean executive culture.

While Fendos claims that this separation between family or friendship ties and business is generally observed in the West, it is certainly evident in Africa. Michela Wrong’s book, “It's Our Turn to Eat” provides an account of pervasive government corruption in Kenya, with political power used for the benefit of the leader’s family and tribe.

Locally the previous Public Protector’s State of Capture report includes very worrying observations about “alleged improper and unethical conduct by the President and other state functionaries relating to alleged improper relationships and involvement of the Gupta family in the removal and appointment of Ministers and Directors of State-Owned Enterprises resulting in improper and possible corrupt award of state contracts and benefits to the Gupta family’s businesses”.

Further reaction has seen the emergence of the civil society group, Save SA, that aims to rally South Africans to work together to root out corruption and dishonest leaders.

What these examples illustrate is a crucial factor in the ethics of power, namely that power needs to be exercised for the benefit of all affected parties. Not just for self and a select few favourites.

Ironically, there are many instances when leaders who became guilty of grave abuses of power initially gained power through traits and actions that advanced the interests of others, such as empathy, openness, collaboration, fairness and sharing. This is confirmed in Dacher Keltner’s research, which he shares in “Don’t Let Power Corrupt You” in the October 2016 issue of Harvard Business Review. Keltner refers to the “paradox of power” whereby a good start changes and those finer qualities tend to fade once leaders attain positions of power and privilege.

But Lord Acton’s statement does not imply that power always corrupts: rather that it tends to corrupt. In other words, it’s not a given. It can be avoided.

Ethical leadership

Ethical leadership is the perfect antidote to the trap of the abuse of power.

Servant leadership reflects an ethical leadership approach that specifically supports the beneficial outcome of leadership for others. The phrase “servant leadership” was coined by Robert Greenleaf in “The Servant as Leader”, an essay that he first published in 1970. The servant leader focuses on sharing power, putting the needs of others first and helping people develop: on using the power of leadership to serve their followers. This contrasts starkly with leadership that is characterised by the accumulation and exercise of power and the pursuit of self-enrichment.

The importance of ethical leadership has just been given a great boost with the launch of the King IV™ Report on 1 November 2016. Specifically King IV™ introduces a new definition of corporate governance. Whereas King III™ viewed corporate governance as “the system by which organisations are directed and controlled”, King IV™ defines corporate governance as being “about the exercise of ethical and effective leadership by the governing body”.

It could be argued that effectiveness has always been required of leaders. Business leaders are expected to deliver sound, sustainable results and political leaders are expected to ensure service delivery to their constituencies. But the combination of ethical and effective is noteworthy as it combines the what and the how: it ensures that the pursuit of whatever constitutes being effective is guided by ethical principles and conduct. Crucially that entails being ethical for the development and benefit of the affected stakeholders.

What is necessary to give effect to ethical and effective leadership?

The following questions address some of the key issues that need to be in place and taken into account.

  1. Do leaders have a sound enough understanding of workplace ethics? Do they view ethics merely as compliance to the rules, regulations and legislation or as a commitment to values? On this basis, the crucial question is whether leaders convey a clear, consistent view of workplace ethics to their people.
  2. Do leaders effectively promote ethics as being of significant value to the organisation and its people? Do leaders make a strong, sound case for ethics that pursues the new ROI, the return on integrity, and strive to build ethical capital? And is the value of ethics high enough to enable the organisation to stand firm against the possible cost of being ethical (when, for example, not paying a bride loses the company the tender)?
  3. Is the organisation’s ethics management sound enough to minimise risk and reputational damage? Or is ethics managed on an ad hoc, reactive basis?
  4. Does ethics inform leaders’ decisions? Are decisions made that are consistently fair to all affected parties?
  5. Do leaders have a clear, shared understanding of the leadership roles and practices relative to ethics? Do they embrace being the custodians of ethics with the primary responsibility to enhance and uplift their organisation’s ethics? Do leaders emulate the ethical leader they would want, who lives the core values, complies with and supports legislation, rules and regulations, follows the golden rule, and, critically, leads to empower others?

The consequences of the abuse of leadership power can be far-reaching, especially as bad leaders (and those they benefit) have a vested interest in retaining power, so their demise is often not as quick as would be desirable. Ultimately the abuse of leadership power can tarnish the reputations of executives or public officials and undermine their opportunities for influence. But, until that time arrives and unethical leaders are removed from office, the negative consequences of the abuse of power continue to impact others: followers, stakeholders or citizens.

The solution lies in promoting and elevating the imperative for ethical leadership in all private and public sector organisations and institutions and, importantly, in placing greater value on ethical leaders who care for their people and affected stakeholders.

by Cynthia Schoeman