Photo: iStock
Photo: iStock

Ethical leaders blaze a trail in times of crisis

It is in times of crisis that the character of the promoters of a company is revealed

In the past few weeks, India has had a slew of bad news. A pandemic is tightening the stranglehold on the economy, and the Yes Bank saga continues to unfold.

It is in times of crisis that the character of the promoters of a company is revealed. There are many examples where celebrated corporate leaders, it turned out, had feet of clay, and their businesses were no more than a quest for wealth, power and status.

I’ve observed growing mistrust between employees and management for the past decade. There is an urgent need for this trust deficit to be reduced if we wish to unlock the full potential of our human capital.

To an extent, there has been a tendency towards employee centricity in the past decade driven by the fear of social media. Further, the desire to innovate within the organization has led to a focus on creating a culture of motivation. Trust has improved, as seen from Edelman Trust Barometer’s 2019 report, which says 75% of employees trust their employers compared to only 48% who trust governments. While this is good news, it also indicates that employees expect employers to act in good faith on important issues.

On the whole, though, there have been big blowouts of late—WeWork, Tesla, Boeing, Uber, Volkswagen, Wells Fargo, Nissan, Facebook, Kingfisher, Fortis, Yes Bank, and more. Their leaders show questionable ethics or are entangled in scandals uncovered by whistleblowers. In most of these companies, the CEO and board have not responded as expected, creating further trust deficit.

It is sad that corporate leaders so easily stray from their companies’ stated ethical framework. Questionable business deals, balance-sheet discrepancies and embezzlement are among the serious charges they face. Corporate malfeasance, it seems, has hit its nadir. Why do these leaders throw out ethics? What makes them believe they can get away with it?

This is not only about power going to someone’s head, but also an intrinsic desire to achieve something no one has done before. In that pursuit, they cross ethical lines, believing they are the only ones who know what is good for the company. Unfortunately, they miss the point that building an institution that outlasts them is about investing daily in creating trust with employees and the public by being proactive, transparent and ethical.

A leader cannot always prevent an organization from making mistakes. He or she can, however, act honourably and shape an ethical response instead of hiding behind legal arguments. Google CEO Sundar Pichai’s response to the payouts to executives accused of sexual harassment was a breath of fresh air. He listened to employee dissatisfaction, and acted on their suggestions.

Fortunately, the corporate world still has towering figures who invest in building trust and living a life that sets an example. These are the ones whose legacy we never forget. More importantly, these are beacons of hope in these turbulent times.

Vineet Nayar is former CEO of HCL Technologies, founder-chair, Sampark Foundation, and author of Employees First, Customer Second.

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