valda f henry, phd, cfa v f inc 37 cork street, top floor roseau, dominica tel: 767 449 9649/ fax:...

Leadership Qualities for the New Business Environment: Building an

Ethical Culture – A Leadership ImperativeVALDA F HENRY, PhD, CFA

V F INC37 CORK STREET, TOP FLOOR

ROSEAU, DOMINICATEL: 767 449 9649/ FAX: 767 449 9449

EMAIL: INFO@VFINC.ORG/ WEBSITE: WWW.VFINC.ORG

V F Inc (c)

EpigraphCulture is a risk factor - people know what the rules

are. It’s the environment that dictates whether unethical practices are permitted to flourish.

(David Gebler, President, Working Values)

The Culture of an organisation is determined by and from the top (Valda Henry, CEO, V F Inc)

There can be no good governance without men and women of integrity (Valda Henry, CEO, V F Inc)

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Why the Focus on Ethical Culture in Repositioning the FSI in the Region?

Scandals Worldwide prior to the Global Financial Meltdown

The Global Financial Meltdown

The Caribbean Financial Scandals

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What have we Learnt from These Scandals?The key elements in all downfalls:

- Greed- Lack of accountability- Departure from the organisation’s core values- Departure from the organisation’s core business-Persons unwilling to take a principled stance against wrongdoing- Absence of integrity- Absence of good governance

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What is Ethics?Ethics are the standards or morals a person

sets for his/herself regarding what is good and bad, or right and wrong (Fleet, 1988)

There is a distinction between something that is ethical and something that is legal

The law defines various kinds of acts as acceptable or unacceptable

Ethics often go beyond the law and are based more on prevailing social norms and expectations

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How are Ethics Formed?

Family InfluencesPeer InfluencesPast ExperiencesValues & MoralsSituational Factors

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Why is it Important to Focus on Building an Ethical Culture?

Enduring great companies preserve their core values and purpose while their business strategies and operating practices endlessly adapt to a changing world. This is the magical combination of “preserve the core and stimulate progress” (Jim Collins, Author of “Good to Great”)

Source: Richard Fagerlin and reprinted with the permission of the SHRM (c)

How do We Build an Ethical Culture?

Integrity

Competence

Compassion

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The Seven C’s of Integrity Driven® LeadershipClarity of purpose and principlesConstancy of beliefsConsistency in ActionsCongruency between beliefs and actionsCommitment to keeping one’s wordsCourage to face what is painful, difficult,

dangerousConcern for the interests of others and

doing what is right(Randy Pennington and reprinted with the permission of

SHRM ©)

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The Integrity Driven ® Leader’s Litmus TestDoes your course of action seem logical, responsible and

legal?Would the results be beneficial if everyone made the same

decision?How will your decision affect others? Where will it lead

you?Will you think well of yourself when you think back on your

decision?How would the person you most admire handle the

situation?How would your family and friends think of your decision?

(Randy Pennington and reprinted with the permission of SHRM ©)

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What Characteristics do We Need to Create that Ethical CultureJames Autry, author of “The Servant Leader”

states that we have to be:

i) Authenticii) Vulnerableiii) Acceptingiv) Presentv) Useful

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How do We Sustain an Ethical CultureAchieve a balance between taking economic risk

(promoting creativity and innovation) and managing economic risk (within a systemic framework of financial discipline) over a sustained period of time.

Fuse high performance with high integrity. That means adhering to the spirit and letter of formal rules, voluntary adoption of ethical standards that bind the company and its employees, and employee commitment to core values of honesty, candour, fairness, reliability, and trustworthiness—which together are in the enlightened self-interest of the corporation and reduce legal, ethical, and reputational risk.

V F Inc (c)

How do We Sustain an Ethical Culture IIInstitute new management-development processes for corporate

profit-and-loss for functional leaders at early stages in their careers. These processes would put strong emphasis not just on achieving commercial goals but on developing the experience and skills to do so through balanced risk management and performance with integrity as individuals rise within the corporation.

Design business organisation at both the conceptual and operational levels - to check greed, stupidity, and corruption and to channel capitalism's "animal spirits" into sustained, durable creation of real economic value. And it must be done within a framework of financial discipline, law, ethics, and values

(Ben Heinemann, (2009) “Redefining the CEO Role: How Fundamental Governance Changes Within Corporations Can Enhance Accountability and Increase Investor Confidence”, Business Week, April 16.)

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Any Role for the Board of Directors in Building & Sustaining an Ethical Culture? An independence of thought and action when undertaking the directional-

giving role Competence when handling the four directorial dilemmas, that is, the

capacity to be responsible and yet detached; to deal with the concrete and the abstract

Being able to take the “helicopter view”, that is, viewing board issues from different perspectives

A portfolio of thinking styles to cope with diversity of board issues Being comfortable with reflecting upon and debating issues and developing

scenarios without having to take immediate executive action Making the connection between policy and strategic thinking decisions,

being able to implement them, and being able to learn quickly from the results

The ability to time-budget for the process of direction-giving as distinct from managing.

Bob Garratt, (2003) “The Fish Rots from the head: The Crisis in our Boardrooms: Developing the Crucial Skills of the Competent Director”

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Remember!

An organisation’s reputation is everyone responsibility. The failure to confront questionable behaviour diminishes the trust in everyone

(Randy Pennington)

V F Inc (c)

RecapMaya Angelou in one of the “Maddea’s” film

says “If there is one thing love isn’t: It isn’t Unsure”

In the same vein I say to you “If there is one thing the right and ethical decision isn’t: It isn’t Unsure”.

So if ever there is a doubt, this is one sure way of knowing that the decision may not be the ethical and right thing to do.

V F Inc (c)

THANK YOU