rOUNd tABLE EthICS IN BUSINESS - Ethical Leadership from

business compliance 03-04/2015 © Baltzer Science Publishers75

rOUNd tABLE EthICS IN BUSINESS

* Andrew Leigh is an author and joint founder of Maynard Leigh Associates, and Philip Weights is founder of Enhanced Banking Governance GmbH, Zurich. Scott Killingsworth, Ludo van der Heyden, Anthony Smith-Meyer and Sharon Ward are all editors of this Journal. Their biographies may be found at the back of this issue.

SHARON WARD (SW): Welcome dear colleagues to our periodic round table discussion, where we are joined by a distinguished panel to share our views on the subject of ethics in business. A fundamental topic for our times, ethics in business has either been the focus of, or an essential component within, many articles in the Journal over recent years, and is clearly one which inspires much debate, not least in the wider business world where ethics in business (or lack thereof) continues to dominate the headlines.

Our central question in this discussion is what ethics actually means in the context of business, and if it has any practical meaning in a world in search of financial performance and continuing growth. Is “ethics” a movable feast, an immeasurable measure of social justice sought by many, agreed on by none?

SW: To open our discussion, let me ask

what are your thoughts on how personal is our “sense of ethics”? Is it the correct term to use in the context of an organisation; even a society? Anthony, perhaps you would like to give us your thoughts as an opener?

ANTHONy S MITH M EyER (ASM): Thanks Sharon. Ethics – I believe – is a very personal concept. The idea of what is right and what is wrong is something born of the fundamental values we hold as individuals. We bring these values into society, and organisations and we are influenced by this interaction in return. Balancing those values when they conflict is an ethical tightrope that is even more a matter of personal conviction.

ANDREW LEIgH (AL): I agree that ultimately, ethics concerns values. Therefore, any “sense of ethics” must necessarily be personal, even if widely shared. A universal set of values has proved

Sharon Ward Scott Killingsworth Andrew Leigh Anthony Smith Meyer Ludo Van der Heyden Phillip Weights

business compliance 03-04/201576

rOUNd tABLE – EthICS IN BUSINESS

elusive. According to recent research by the Institute of Business Ethics, the closest to an agreed set applicable just about everywhere is “The Golden Rule” - that is, do unto others as you would have them do unto you.

PHILLIP WEIgHTS (PW): The word “ethics” is very powerful. It is central to the character of individuals, corporations, banks, government and society. But it is hard to define. As Andrew indicates, it is a state, a concept, something intangible, existing at a high level without specific rules and regulations. It is easier to understand at a lower level, that for example the giving or taking of a bribe is a crime.

ASM: That’s the thing Philip, it’s conceptual yet in need of definition above mere rules of law. Ethics in a business or organisational context is therefore more about the process of establishing values that the people within it can share, and the decision taking governance that ensures organisational priorities, including values are kept alive, and respected.

PW: It’s essential, Anthony. When thinking about ethics and business I am always drawn back to the Financial Crisis

Inquiry Report published by the US Government in January 2011. It concluded that, among many other causes, there was a systemic breakdown in accountability and ethics; that “there was an erosion of standards of responsibility and ethics that exacerbated the financial crisis.”

LUDO VAN DER HEyDEN (LVDH): Ethics to me amounts to both behaviours, and the deep values that drive those behaviours. It is about what is really important to us. It is about what we will not easily move away from. These are also called our ethical principles. Ethics applies to individuals, groups, organizations; for me in that order. The ideal is that they fit like a set of Russian dolls: organizational ethics fit group ethics that themselves fit individual ethics. But that is probably idealistic: people make trade-offs on their values, given particular contexts and inducements. As Anthony indicated, personal ethics can be influenced by organizational values over time: this is the case with families, schools, and organizations of all types.

SCOTT kILLINgSWORTH (Sk): Certainly people differ in their ethical beliefs, but from a compliance perspective the more



both of the company’s key values and of how employees are expected to resolve conflicts between competing values, such as legal compliance versus sales. It’s important that the messaging via compensation and reward systems, promotions, and discipline be consistent across the board so that employees will not be confused about the standards by which their performance will be measured.

SW: Alright. Well it seems we have established that ethics is at once a very personal issue, but is also one that has an important role in business life. Where then, does an organisational culture of ethics come from? Politicians speak of it. Activists seek it. Business leaders say they pursue it. Organisations cannot possess it however; ethical standards it seems - to whatever end - must be injected into it. From whence or whom should we expect this wisdom or form of “invisible hand” to come from and guide our organisational behaviour? Shareholders? Government? The Executive Suite?

LVDH: I disagree that organisations cannot possess or own a culture of its own: GE is an example point in case: though

important disparity is in the adherence to established values, rather than in the acceptance of them. Nearly everyone endorses a similar set of key principles; but as Ludo and Anthony have both mentioned, the question is how easily one abandons these ideals when they conflict with self interest, or with other values that happen to align with our self-interest.

Pressure, temptation, and impulse are powerful things and they warp our thinking. We are very good at rationalizing misconduct on the basis of “higher” ethical values, as when we justify financial misconduct on the basis of our children’s welfare rather than ascribing it to greed. The other major variation in ethical thinking explained by Trompenaars, is more apparent across cultures than across individuals. It is the ranking of different accepted values when they come into conflict. Lying to get a friend or colleague out of legal trouble is far more accepted in some cultures than others, and in every culture there are those who believe it’s the right thing to do.

So ethical leadership in organizations is needed to constantly remind people



line and everybody’s ethics are different.” In contrast to Mr Desmond, many companies and leaders do talk about ethics, and it helps them chart a course of action, to determine their intended destination and clarify their sense of purpose. The “invisible hand” you refer to is grounded in people’s sense of what’s right and wrong and that does not stem from a single source. It’s drawn from business leaders making a judgement of what society and others, including shareholders and the law expect of them.

Sk: Without doubt, if you want to impact employee conduct, active ethical leadership within the organization is the most powerful single factor: “tone at the top” is not enough by itself, but without it there is little hope. Over time, ethical leaders can establish a strong organizational culture – consistent group expectations about what is acceptable behavior – across the company, down through the corporate layers to the middle managers who, for most employees, are the real face of the company.

ASM: Ludo notes that some organisations do have “trademark” cultures that guide

being a member of GE cannot be a 100% guarantee that every member’s ethics align all the time with what the company aims for. Over time, however, GE employees’ ethics seem rather strongly aligned. What is interesting is that some individuals, having left GE for top jobs at other organizations, did not seem to exhibit these values any longer, or to the same extent. That, to me, is proof that you can have ethics in one organizational context, and other personal ethics in a different context. What is true of course is that organisations as such do not behave, only their members behave. But that is a truism.

AL: It’s a fair question though, Ludo. Where do our values, or sense of what’s right or wrong come from? In a company for example, leaders must rather ask, “what do we mean by being a responsible business?”. It’s simply not sufficient to respond like Daily Express owner Richard Desmond in the Leveson enquiry when asked if he was personally involved in setting ethical standards at his newspapers: “Ethical, I don’t know what the word means…” and later “We do not talk about ethics or morals because it’s a very fine



company are not “seen”; but every shareholder exists, takes action, etc. The “invisible hand” ethic of Adam Smith has actually become quite visible over the last years, and I refer here to the huge number of insider trading cases that were revealed. For many, and Friedman was one of its great apostles, it unfortunately became an ideology: you must do what the market allows and wants you to do. Pushed to its limits, this ideology has failed, for it led to market actors without any other ethics than to take advantage of market opportunities. Making the market function efficient became an end in itself. There used to be a topic that I learned in my engineering studies: the subject of political economy. It stated that the market was an instrument of the “polity” - in the Greek sense, the city or the community. I have seen this topic split into two distinct topics: micro-economics - or the interactions between market actors - and macro-economics, being the aggregate results of micro-economic interactions. I feel the consequence of this split has been the disappearance of ethics from the economics curriculum. It is a tragedy, one that has contributed to simplistic slogans like “government

its members, Scott has referred to Tone at the Top, and Andrew to the people. These must all be brought together. Organisational values and the ethical discourse within an organisation does not, and should not come from any mystical source, invisible hand or be artificially “injected” into the organisation. Having values that resonate with its adherents, that have moral authority and are robust enough to withstand challenge, needs strong leadership. There must be a strong proponent of “doing things the right way” on the basis of a clear agenda of values. Of course, analysing and evaluating impact of one’s decisions and views on one’s stakeholders is an important part of this process. Shareholders, government, employees, suppliers and clients, along with the individual who make up the board and the executive – all have concerns and considerations to be taken into account.

LVDH: In other words, the “invisible hand of the market” is in fact quite visible at the micro level: these are markets actors taking advantage of opportunities. They are invisible in the sense that the shareholders of a large publicly traded

“Tone at the top” is not enough by itself, but

without it there is little hope



AL: Firstly, it is important to keep in mind that there aren’t “organisational ethics” if you mean special ones just for the organisation. Doing what’s right is not divisible. However, each company and indeed each set of leaders must decide for themselves how to interpret this in their own context. Get it wrong and you risk losing your social licence — your right to continue doing what you’re doing or want to do. Right now FIFA is in serious danger of losing its social licence no matter what the current leaders say about their organisation’s overall behaviour. Shell’s CEO can talk all he likes about the importance of climate change, but what matters is what his company is actually doing in our world, and there is a serious disconnect. You rightly ask, how can the organisation help new leaders pick up the reins and adopt acceptable behaviours that society expects — that is, what makes a credible leader. One way is to develop leader character; in other words, help them to build the confidence and understanding of what it means to do what’s right when there aren’t precise guidelines to which they can readily refer. But these temporary guardians must ultimately

is bad” or “the market is always right”, statements that political economy 101 students know are wrong.

Sk: That leads us to an unresolved question, doesn’t it? Compared to the daily impact of what we see and hear around us every day at work, and what our peers and supervisors expect of us, the influence of shareholders, government, and consumers is a distant echo: weak, diluted and delayed. These voices are helpful in the long run, but they will affect few decisions made in the heat of the moment.

SW: So, in a world dominated by free marketeers, as alluded to by Ludo, how can we raise the bar and create organisational, “trademark” cultures that mean something, such as the GE example? Are organisations designed to survive the passage of the various men and women who “crew” the vessel? By what means might organisational ethics provide the navigational tools to keep these transient crews on course – and to what extent should these temporary guardians have a say in influencing the final destination, the objective of the organisation?



PW: It’s a nice vision Anthony, but realistically speaking ethics within an organisation operates at different levels. In a bank for example, corporate ethics identifies a behaviour culture by introducing certain rules in dealing with situations arising inside or outside the bank. The importance of the role banks play in society, through investment, credit and savings functions, driven by competition, profit and productivity, obliges them to maintain disciplined ethical principles during their operations in both professional and corporate domains. However, banks are comprised of thousands of professional employees. In highly regulated jurisdictions, such employees are members of different professional organisations, will need to pass examinations, possibly be authorised with the banking regulator, and deemed to be “fit and proper” to carry out their duties. Any breach of ethics, rules and regulations means loss of a licence to operate with the regulator, loss of membership in a professional association like the Bankers Association for example, and consequently loss of employment in the financial sector. Organisational ethics must be revised and validated on

rely on their judgement about the final destination of the organisation and indeed its purpose. That’s why we call them leaders!

ASM: As I have indicated before, I do not believe it is possible for an organisation to have a rigid set of ethics. The firm must above all know its purpose, and it should have clarity on how it wants to produce and deliver that purpose – hence the need for corporate values. These values are not rules however, and the ethical thing to do is a moving target depending on many influences, and even the changing nature of impact on stakeholders. It is therefore the debate ongoing in a firm, in changing circumstances, where gravity of outcome can change from one moment in time to another, where strong values offer the moral compass by which difficult decisions can be made. The meaning of those values, and their relative importance may change over time, in line with society and available choices – they should never, however, be able to be discarded or set aside due to temporary inconvenience and self interest. If they are, then this is the road to ethical damnation.



value equation. In reality, I would say that the value equation at any given time is the result of interactions between the company’s board, its CEO and senior executives, and its environment. What each contributes in terms of percentages is hard to predict, and it certainly is not a constant from one organization to the next. What is clear to me is that the value equation, after the organization’s objectives and goals, is probably the most important thing to get right – for together they are major determinants of a company’s culture.

SW: So, we might conclude that what is needed is a real, and dynamic ethical debate in an organisation, led at the highest echelons of the firm, necessarily backed by fairly precise guidance in the form of rules and procedures?

What then of the impact on business ethics by what might be deemed a fundamental change within the corporate world? The world has changed dramatically and the distance between the largest corporations in the world – companies in the limelight and effectively acting as role models for success – and their stakeholders, has

a periodic basis in order to evolve in line with the changing regulatory, market and social circumstances. It is therefore the duty of the temporary guardians to embrace this challenge and add value to the organisation by enhancing the Code of Ethics to ensure it remains fit for purpose. The respective Heads of Compliance and Internal Audit also have an important role to play by their periodic reviews to provide assurance that the Ethics Code is complied with throughout the organization.

LVDH: This question asks for the sustainability of an organization’s ethics. I come back to the example of GE: its last 11 CEO’s appointed are from inside! That allows much more continuity than when CEO’s are outside appointments. When a company’s current values no longer fit the organisation’s mission, it might be a good idea to appoint an outsider. But it remains a tricky bet: how does one really know what the new, outside CEO will bring of his own values? It is a complicated question: my view is that the governance of values in a company should ultimately be the responsibility of the board, and this includes the decision to change the



every phone call and email, does nothing to restore trust. There seems to be a trend to enforcing change by regulation and activism. An example of regulation would be the setting of quotas for female board members to increase diversity and improve governance. An example of activism would be a whistleblower who steals client data from a bank and puts it in the public domain. Why are both these necessary and actually happening? Precisely because organizations do not, of their own volition, proceed in an evolutionary manner. The old boys club of the pale, frail and aged friends of the Chairman and CEO, are more than happy to receive their fees and maintain the status quo. It is the collective responsibility of the Company Secretary, the Compliance Head and the Chief Audit Executive to educate the Board members and executive management that good governance adds value and sustainability to the business and the share price, and that a key element of the governance framework is an ethical culture within the organization.

Sk: This really gets back to your question about the role of external stakeholders in defining an organization’s purpose and

grown ever larger. Arguably, shareholder capitalism has filled the void, resulting in success pre-dominantly measured in financial terms. Is this a sufficiently solid anchor for the ethical compass of enterprise; or are they necessarily cast afloat from any sense of long-term purpose – riding the storm merely to get to the next port of safety?

PW: Certainly the world has changed dramatically. Change is the only constant in life. Evolutionists prescribe to the theory that it is not the most intellectual of the species that survives, nor the strongest, but rather one that is able best to adapt and adjust to the changing environment in which it finds itself. Applying this theoretical concept, we can state that the business organisation that survives is the one able to adapt to the changing physical, social, political, moral, and spiritual environment in which it finds itself. Trust is a key attribute of ethics and ethos. Today people do not trust so much in politicians, governments, bankers, newspapers the way they used to. In this changing world, increasing the number of surveillance cameras in the streets, and the number of agents monitoring your

The governance of values in a company should ultimately be the responsibility of the board



ASM: There was a time where proximity to stakeholders made the consequences of one’s actions more obvious, even in an unconscious manner. Consequently, globalisation, the anonymity of the myriads of investors behind institutional investors, and the statistical veil of market segmentation and analysis leaves the company isolated and in something of an ethical bubble. Who should they work for, if not the shareholder. However, this is to forget and deny any original purpose and aspiration. Enduring companies were not created in the desire for enrichment alone, it was to create something to be valued, by the founders and by its clients. Reducing the measure of success down to net profit for distribution to shareholders is a dangerous path. Overemphasis of this mindset, and its promotion by radical free-marketers claiming that the markets will find the best solution for society, etc., are – in my opinion – lost to reason. The market left to its own devices is shown to fail, again and again, as players seek only to gain at the expense of others. That is the reason we have laws and regulations in the first place. A world without the reassurance of an institutional framework is a distrustful place. A company distanced

its ethical expectations. As you suggest, for every shareholder interested in building long-term success on an ethical foundation, there is another – or perhaps another hundred high-frequency traders – concerned only with today’s numbers. So the collective influence exerted by this important constituency may be at best neutral and at worst pernicious.

AL: I don’t think shareholder value, or “the bottom line of profits” are a sufficient anchor for the ethical purpose of an organisation. Even that most extreme supporter for such guiding metrics, Milton Freidman, eventually came round to agreeing they’re not enough as the compass for steering an enterprise. How an organisation gets to its destination matters just as much as that end result. The way Johnson and Johnson tackled their famous Tylenol crisis remains a classic example of a company relying on its core sense of purpose to guide its big decisions on what’s the right thing to do. The failure of GM to correct the faulty engine switch or the earlier Ford Pinto scandal shows what happens when managers rely on simplistic guides to action such as cost benefit analysis.



protest that merely assuring legal compliance is challenge enough, and must be the primary, non-negotiable goal in this area.

LVDH: The problem for me is more that regulation arises in a context: if values are nil, regulation will become overabundant and excessive. I think this statement is precisely the proof that capitalism needs an appropriate values context. Regulation is about ensuring that social values of business actors are indeed enforced. But the foundation remains the value equation. Regulation is not a substitute to values, it is at best a complement.

SW: But pity the executive manager, Ludo? Do they not plead that organisations should proceed in an evolutionary fashion, and address the higher calling of ethics only after basic compliance is achieved?

LVDH: It is the opposite: companies should be ethical, and the more ethical they become, the less regulation would be required. No, the statement as mentioned is for me unacceptable.

from the consequences of its actions has all the greater a need for an ethical decision process within its walls.

LVDH: It is now clear – particularly after the financial crisis - that there are too many fraudulent, scheming, illegal and unethical practices in business. I, along with many others, would argue that shareholder capitalism (US and UK) has not been producing the right societal results. For me the financial crisis is proof that we need something else, and I would call this people capitalism or democratic capitalism – namely capitalism that is of service to the people, and not the converse (people being exploited by capitalists). I would state that European capitalisms (Scandinavian, German, Swiss, Dutch …) are enticing and good examples of what I would call democratic or people capitalism. The debate between communism and free market or anglo-saxon capitalism misses the point that the right answer lies in the middle: it is capitalism regulated by a sense of social and societal responsibility

SW: Good plain speaking, Ludo! That said, results-focused leaders sometimes

Enduring companies were not created in the desire for enrichment alone, it was to create something to be valued



SW: Alright then, I surrender! Let’s consider instead the link between ethics and success, as you hint at. Can ethics in business be seen as a guiding principle for defining business success? Can it be defined in current terms, does “ethical return” require a reconstitution of purpose of society itself in political and social terms? Can the ethical executive and firm survive in the context of modern consumer society? Anthony, why don’t you lead on this one?

ASM: As Andrew has mentioned, there are numerous studies evidencing the benefits of the longer term thinking induced through diversity, values, fair process in firms and other measures that promote employee engagement and stakeholder support. There are of course others that seek to question these, but on balance – and based on my own experience – value creation, innovation and long term success are born of authentic action based on a belief that the fair treatment of all stakeholders is beneficial in so many ways. I would like to see company performance measured more precisely and actively in terms of its impact on society and the fundamental

AL: Absolutely! Relying solely on codes and regulations to guide your leadership and company actions is a sure way to land it in serious trouble, to risk reputational damage that can prove costly, even fatal. Your actions can be legal, technically acceptable within some set of standards, yet still be wrong. For an organisation to rely entirely on being compliant on codes and regulations is itself a fool’s errand, since it’s almost impossible for an organisation to be one hundred per cent compliant, no matter the degree of controls, monitoring and enforcement imposed.

Incidentally, we’re awash with metrics showing that companies pursuing an ethical approach are more profitable than one’s that don’t; and that CEOs whose employees gave them high scores for character had an average return on assets of 9.35% over a two-year period. That was nearly five times better than those with low character ratings. Their ROA was only 1.93%.1

1 See for example: Ethics Pays: http://tinyurl.com/l98ybtn

http://tinyurl.com/l98ybtn



countries, especially the UK and Holland, have introduced a Code of Conduct for bankers, and the G7 has now given a task to the Financial Stability Board in Basel to establish a universal Code of Conduct for bankers that reinforces the ethical basis of good conduct. Regulators believe bad behaviour at banks goes deeper than a few bad apples and demand a cultural change, and a global standard will make it less easy for ethical breaches to be overlooked.

Sk: Building on Andrew’s earlier point regarding metrics; lately there has been serious research on the link between ethical culture and performance, such as that conducted by the Ethics Resource Center and the Corporate Executive Board. For example, the CEB study showed a 16 percentage-point gap in total shareholder return over a 10-year period between companies scoring in the top quartile and the bottom-quartile on an ethical culture scale. That’s worth considering. Also, we see a lot of overlap between factors known to drive ethical culture, and those linked to employee engagement, which in turn drives increased productivity, sales and profitability and lower absenteeism

well-being of the world in which we have to build our future. As such the so-called triple line measurement of company performance in terms of “People, Planet and Profits” would be a good thing – but it also requires attentiveness and responsible behaviours on the part of investors and consumers. Not everything should be measured in material or financial terms. To use your phrase: we need a reconstitution of political and social purpose.

PW: Hmm. Yes … Consider banking. It has been said that Corporate Governance, and here I include ethics, for banking organisations is arguably of greater importance than for other companies given the crucial financial intermediation role of banks in the economy. It is essential to achieving and maintaining public trust and confidence in the banking system. The multiple scandals surrounding banks and bankers, including Libor rate fixing, sanctions violations, misselling, excessive remuneration and the like, have tarnished the reputation of the industry. In order to regain trust and integrity, there has to be a cultural change, with ethics, morality and sustainability at the core. A few

For an organisation to rely entirely on being compliant on codes and regulations is itself a fool’s errand



consumers paying premia for “green” products as instances of this.

Financial success alone is becoming insufficient: money earned cleanly, that is on the basis of value added to consumers relative to the competition, is a tough requirement! Such a requirement would make things much harder for sellers than today. It is much easier to build a cosy corner for oneself though collusive practices with competitors or with a corrupt government. It is much harder to win the Tour de France without doping: that is precisely why Armstrong built his record using doping! We ought to work towards the goal that business must become unequivocally regarded as clean and “a force for the good of society,” and not just for the good of the shareholder, the owner, or the bribed politician.

SW: – Clearly we see both hope and evidence then, that there are benefits to the firm and society of re-equipping our economic players with the appropriate, up-to-date navigational tools to set us back on course towards a longer-term, sustainable measure of what constitutes success. Unfortunately, we are out of

and attrition. On the other side of the ledger, we’re bombarded with daily news of corporate fines and penalties in the hundreds of millions or billions of euros that affect profitability and share price. Further, legal and investigative costs, restitution and civil damages come next and can affect financial performance for years. Bear in mind the fates of the Enrons of the world, factor in the post-2008 enforcement landscape, consider the speed and breadth of reputational damage in a world where anyone can be a broadcaster, and realize that in this environment a truly sustainable enterprise can only be built on a foundation of integrity.

LVDH: Overall I am positive. I see a lot of signs indicating that business and business actors behave more ethically, in a sense that is acceptable to those impacted by business - consumers, employees, shareholders ... I do believe that more jail terms and greater indictments of business leaders are good news in the sense that misconduct has existed all along, but that it now clearly is no longer tolerated. I would mention the UN Global Compact, increased responsibility of boards, and



performances. Greater transparency in societal performance of politicians. Greater collective global responsibility amongst business leaders. In other words: cleaner business, cleaner politicians, and greater collective sense on the part of business of building a better global world.

PW: I see the fall in ethical standards as linked to corporate greed. A combination of bonus caps, deferred compensation for executives and risk takers, and shareholder say-on-pay initiatives have to be implemented globally. The right of shareholders to vote on executive and board remuneration should be made a mandatory binding vote (as in Switzerland and Italy).

Power corrupts. The same individual holding both positions of Chairman and CEO has complete and absolute power, no matter how many arguments are put forward about the role of the senior independent non-executive director. This has to be abolished, no more so than in the banking industry where large systemically important global banks such as Bank of America and J P Morgan Chase operate in this manner. Interestingly, this is in breach

time and must conclude: What would you identify as three, practical steps our leaders in politics, research or business might adopt to adjust their course for the future? Andrew, your thoughts to begin?

AL: Thank you. I think for business leaders a critical step is to address the core purpose of their organisation—what’s it really for? If the answer comes back “to make money” then it’s time for a re-think. Secondly, semantics may hardly seem a practical step, but leaders being willing to talk about ethics — or “what it means for us to run a responsible business” — would be another sensible step in the right direction. Finally, business should systematically address the fundamental issue of what creates ethical engagement — that is the extent to which employees identify with the ethical intentions of the organisation and commit to these, so they become willing to speak up when there is a risk to the enterprise that it should avoid or reduce.

LVDH: Greater transparency in business – from allowing consumers to know what they pay for, to ensuring CEO’s are getting paid for true value adding



ranks. Do not delude yourself in bias that there is any single truth. Focus on corporate purpose and the creation of long-term value for all stakeholders. I personally do not believe your companies will succeed over time if you do not.

SW: Scott. You are a practical man. What are your final words of advice?

Sk: Focusing on business leaders, I would suggest these: (1) Explicitly filter your words and actions through your values whenever you can – more often than you think is necessary. You’ll make better decisions and will serve as an example for others to follow. (2) Expect the best from your people, and your business partners, and enforce those expectations – especially with high performers. (3) Watch the ethical messages you send with your reward systems – pay, promotion, recognition, and the like. Policies and value statements are great but sometimes, as Emerson said, “what you do speaks so loudly that I cannot hear what you say.”

SW: Thank you all, for tackling a difficult yet essential topic for a better tomorrow! M

of the UK Corporate Governance Code, and US banks have a large presence in the City of London. The UK regulator should not remain silent about this significant non-compliance with its rules.

All stock exchange listed Companies should be obliged under the listing rules to publish on their web site their Corporate Governance manual, and Code of Ethics, and in the banking sector there should be a Bankers Oath where bankers swear to uphold specific ethical standards.

ASM: For our politicians I ask them to show leadership beyond short-term electoral objectives and to be honest with people about the kind of society we are creating, and open about the social values we wish to hold.

For our researchers and teachers, many of whom are academics and / or linked to business schools: Please focus on the new business and social paradigms we need to ensure success 50 years from now – it will take time to turn the ship.

Finally, for our business leaders: Open up for challenge and debate within your

“What you do speaks so loudly that I cannot hear what you say.”

– ralpH Waldo emerson



Philip Weights is the founder of Enhanced Banking Governance GmbH in Zurich, Switzerland, and Enhanced Banking Governance Consultancy FZE R.A.K. United Arab Emirates, providing governance services to boards of directors, audit committees and executive management designed to strengthen the corporate governance framework. Philip was previously the Chief Audit Executive for EFG Bank, Zurich, where he worked closely with, and attended all, the Audit Committee, Risk Committee and Executive Committee meetings for over a decade. Philip has held audit executive positions with HSBC Private Bank and Republic National Bank in Switzerland and has business experience from Latin America, Los Angeles, New York and London. Philip is an Advisory Board member of the Virtus Global Center for Corporate Governance and a Certified Professional Director accredited by the IFC / World Bank.

Andrew Leigh is author of Ethical Leadership: Creating and Sustaining an Ethical Business Culture (Kogan Page 2013) and writes regularly on this at www.ethical-leadership.co.uk. He is a joint founder of Maynard Leigh Associates whose mission is Inspire Greater Impact. The company pioneered the use of ideas from theatre in business and is now in its 26th year of trading. For many years Andrew was a hands-on senior practising manager in the public sector, ending his stint there running a division with over 1,000 staff. He spent several years as a business and financial journalist, including time at The Observer newspaper. He has published various White Papers on ethical issues and leadership, including No Hiding Place, exploring the HR role and its new ethical agenda. In 2013, Andrew started www.ethical-leadership.co.uk as a non-profit making information and campaigning site.

http://www.ethical-leadership.co.uk



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rOUNd tABLE EthICS IN BUSINESS - Ethical Leadership from