When we started the research which has led to the writing of this paper we thought this project would focus mainly on leaders’ integrity. And integrity – the capacity to be honest and consistent and to hold yourself accountable for actions, even when nobody’s watching – remains at the heart of it.
But bubbling up through so many of our conversations with FTSE100 and FTSE250 Chairs and executives has been another element of leadership: courage. Without courage, mistakes may be swept under the carpet and decisions may be made in accord with the most powerful voice in the room. When a leadership team lacks courage, bad behaviour may be tolerated for too long.
In this discussion about leaders we want to look at these essential qualities: the integrity to see what is right, the courage to act in accordance with that and the impact of both these factors on judgement. Integrity and courage inform and shape judgement, and it is judgement under pressure that counts.
Who is in charge?
In business it is a perilous time to be a leader. Scrutiny is intense, and there is limited tolerance for mistakes or failures of judgement. Leaders’ behaviour is under a microscope in a way that it never has been before: what they say, and what they do. Stakeholders’ expectations have increased.
A Chief Executive is ultimately accountable for the performance of the business. Organisations are complicated; if they are operating in several jurisdictions, even more so. A leader’s decision-making abilities matter enormously, of course. But the competence and character of the top team is also crucial. What quality of advice is the boss getting? Who is there to make alternative suggestions, or warn that a proposed course of action may be unwise? And crucially who has the courage to do so and, if necessary, take a stand?
When we talk about integrity in leadership then, we need to think about the qualities displayed by the senior figures who are there to support the CEO, as well as focusing on the boss him or herself.
We set our research against the backdrop of a changed business landscape. The narrow ‘maximising shareholder value’ mantra is less fashionable than it was – even if in practice share price performance and profitability remain non-negotiable priorities for business leaders.
What is different is the reduced tolerance among a range of stakeholders for irresponsible actions and unethical practices – bad behaviour and bad judgement – wherever they are found. This is one reason why it is not just the competence of a leader that matters, but the character too.
Hedley May has been conducting a series of wide-ranging interviews with corporate leaders from FTSE100 and FTSE250 businesses, along with some other expert commentators. These have revealed an acknowledgement of the growing importance of integrity – and courage – in leadership, and the ways in which courage and integrity inform judgement. Whatever your views on the burgeoning and sometimes controversial ESG debate, that ‘G’ for governance includes the risk factor of bad leadership, and especially behaviour that fails to measure up to today’s demands for good conduct.
In this short paper, we will be looking at some of the key themes to emerge from these extensive conversations. These are: