As the Chair of the Board of Entergy (one of the largest utilities in the South) and President of the Society for Human Resource Management (SHRM, the largest organization of Human Resources), we depend greatly on the quality, enthusiasm, and trust of our employees as well as the strong trust and support of shareholders, customers, and association members. We have both seen, firsthand, how important articulating and then demonstrating genuine, consistent ethical leadership and values-driven decision making is to the business success of companies and organizations.
For decades SHRM has been committed to supporting visible, strong commitments by employers’ Human Resources teams to ethical leadership. That is where employers create an organizations’ cultures and establish what they expect of their employees and organizations as a whole. We believe, with deep conviction, that ethics and ethical leadership, and values-based decision making, are among the most critical factors leading to employee satisfaction, enthusiasm, and commitment – as we have seen at Entergy and SHRM for many years with our organizations’ commitments to ethics and ethical leadership, ready to be accountable for our values-based decision making.
Let us stress one compelling fact – ethical leadership is not only “the right thing to do,” it has also proven to have convincing value in building our organizations, including in attracting and retaining employees, shareholders, members, and customers. Therefore, we are pleased to see that ethics and ethical leadership have become key character qualities high-level corporate search committees seek in individual leaders they hope to attract to their companies. Korn Ferry, the nation’s largest search firm, reported in a recent op-ed that demonstrated ethical leadership has become a guiding requirement for considering candidates by corporate directors. Adding to the power of the new priority on ethical leadership, Korn Ferry also reports that candidates have applied similar requirements to the companies and organizations they are considering joining. Just two months ago, McKinsey published a book on the leadership roles of CEOs in the future: CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest, making the case that the number one skill a CEO of the future should have is ethical leadership.
Looking at it from the other side, when such principles are not followed, both of our organizations have seen firsthand the highly destructive impact of bad decisions based on the wrong principles. Ethical failures have caused enormous harm to organizations, customers, and stakeholders in the past, often for years thereafter, reflecting the short and long-term devastating prices paid for failing to make true values-driven decisions.
In light of our belief in the business value of ethical leadership, we both strongly support the work of the McGowan Charitable Fund which, through their McGowan Fellows Program, has demonstrated in the most convincing way how to infuse their Principles of Ethical Leadership in MBA programs. The Fellows Program is now entering its 13th year, working in close cooperation with 10 of the nation’s leading universities. Those who have participated in the program could not be more enthusiastic about the dramatic change in the perceptions and appreciation of the importance of ethics and ethical leadership they drew from their experience as a Fellow – and they are applying it every day in their roles in organizations across the world.
And yet – are the major educators of future business leaders listening? No MBA program we know of has yet embraced values-based decision making throughout their program. Only a few have seized on the opportunity to take advantage of the McGowan Fellows Program to embed ethical leadership principles into part of their offerings, despite the overwhelming evidence of the importance of ethical leadership to businesses, employees, shareholders, and customers.
Applying values-driven decision making can certainly be difficult. Even the most ethical decisions can hurt some people. Yet, values-driven decision making has been at the heart of leadership development at West Point, Annapolis, and the Air Force Academy, where some of the nation’s finest military leaders are trained. Year after year, men and women from these institutions make values-driven decisions, on occasion in life-or-death situations. The military has found that values-driven decisions are what make teams adhere to each other and stand up against the most daunting of odds, staying consistent to their “true North.”
Most of the Fortune 1,000 rely heavily on MBA programs to bring the kinds of leaders those companies are seeking to take them to the next level. Therefore, we will be asking MBA programs now to report to us on what they are doing to ensure the full engagement of their MBA students in the Principles of Ethical Leadership.
Our nation has been through a very difficult time these past three years. Now we are facing another set of serious economic, social, and educational challenges that will require true values-driven decisions to meet the challenges ahead. Therefore, it is all the more important to adapt to new needs to build business leadership preparation programs in post-secondary education that will bring all parts of society the talent needed to weather the storms ahead – and take advantage of the equally exciting range of opportunities ahead for our businesses and our country.
So, we ask: who will be first? Which MBA programs will lead the nation in infusing the Principles of Ethical Leadership in its program to prepare our future business and society leaders to ensure we are the best we can be?
