Ethical Leadership

John Bogle (2005), the founder of Vanguard, in his recent book “The Battle for the Soul of Capitalism”, illustrates the value of Ethical Leadership when he described the role of the Quakers in the British Economy. He said, “Their emphasis on reliability, absolute honesty, and rigorous record-keeping infused them with trust as they dealt with one another, and other observant merchants came to see that being trust-worthy went hand in hand with business success. Self-interest demanded virtue.”  He goes on to point out,” . . . capitalism requires a structure and a value system that people believe in and can depend on. We do not need a Pollyannaish faith in the goodwill of mankind, but we do need the confidence that promises and commitments, once made, will be kept.”  If these attributes are requirements for successful capitalism, it would be logical to conclude that the same would be essential for those who lead us in any capitalistic enterprise.

The fact that ". . . capitalism requires a structure and a value system . . ." explains why a successful company must be run with an emphasis on 'Core Values'.  The leadership of that company needs to define their 'Core Values' and make sure every key decision is in alignment with those same values.  When a company functions in this way it creates a consistency that builds trust within and outside the organization. 

Trust is invaluable.  I was taught very early in my sales career, that the easiest way to get someone to trust you is to do what you say your going to do.  The focus of a leader needs to be on the advancement of the organization, as long as that organization has 'Core Values' that go beyond a desire for profit only. A leader's desires need to be congruent with the well being of other people as opposed to the benefit of self. It takes an Ethical Leader to be able to accomplish these tasks consistently.  An important tool to aid in this endeavor is the ability to gain trust. If a leader consistently does what he/she says he/she is going to do, and does it  with a focus on the well being of other people, then that leader will be working for the the advancement of the organization and of capitalism in it's finest form. That leader, in the Quaker's tradition, is an Ethical Leader. 

Living in the aftermath of the Tech Bubble and Enron, we have recent examples of what will happen when these principles are ignored and managers act primarily in their own self interest. Therefore, the importance of Ethical Leadership is not an idealistic dream, but a practical necessity with which to gain sustained credibility and success.