Consumers are buying less from companies that follow irresponsible business practices. However, unethical decisions are becoming the norm among businesses across the globe. When it comes to government, from Angola to Venezuela, corruption is rife.
In tough economic times, executives – and politicians – find it more difficult to keep integrity and ethics at the forefront. In business, doing the deal at all costs has become widespread.
Frequently ethical leaders who do things by the book lose out against unscrupulous competitors who take short cuts to win tenders.
There is downward pressure from institutional investors on leaders to deliver a consistently high-growth return in a zero-growth economy. At the same time there is upward pressure from employees and consumers for ethical practices. The CEO is the shock-absorber between these two forces.
According to the World Economic Forum (WEF) Outlook on the Global Agenda, 86% of people believe there is a leadership crisis in the world today, and a high 92% in sub-Saharan Africa are in agreement.
The WEF states: “There’s a crisis of legitimacy in the institutions of industrial capitalism. Everywhere old institutional models are stalled or failing and the leadership for transformation is not coming forward.”
As a reward for achieving profits at all costs, the CEO and his executive team receive millions of dollars or rands in pay-outs, with little benefit to employees, the community or the environment. Wealth is being concentrated in fewer hands, with reduced distribution to employees. At the same time, many sectors, such as mining, are facing protests as a result of social negligence, water pollution, ruined farm lands and work-related disease.
A recent KPMG survey reveals that, in the US, close to three out of four employees had observed misconduct in their organisations. This was driven by the pressure to do ‘whatever it takes’ to meet targets, even at the risk of losing public trust. A global Ketchum survey shows that 45% of consumers stop purchasing a company’s products and services as a result of poor leadership.
With the advent of social media, consumers are becoming more vocal. They are demanding that companies respond to environmental issues and the needs of the community. Over time, buying power is likely to shift to value-driven organisations that are mindful of their broader responsibilities.
At a government level, in the face of endemic corruption and dishonest leadership, the WEF notes: “The deeper you go into these endemic failures, the harder it is for anyone to emerge as a strong leader? one is forced to play the game the way it’s built – which is inevitably in the interest of the system, and rarely in the interest of the people.”
Of course, government corruption – intersecting with commerce – becomes a two-step process. For both parties, corruption is based on individual greed and the ability to manipulate the system.
We are moving from corruption being the exception to corruption being the norm, and that’s not sustainable. Economically and socially we are heading for some sort of melt-down. If corporations and governments continue as they are doing, we will face increased political and social unrest across the world. We need to reverse this trend before it reaches critical mass and becomes unstoppable.
However, there is no quick fix. From a corporate perspective, shareholders and institutional investors need to appoint leaders who are open, transparent, with clear values, good communication skills and a willingness to admit mistakes and engage in genuine dialogue to achieve results.
Within our own lives, we need to hold people accountable – with our buying muscle or our votes. That’s the bottom line. We must not underestimate our own individual power as shareholders, investors, consumers, employees, citizens. We need to penalise corporations and governmental authorities for sub-standard leaders who ignore their environmental and social responsibilities. We need to demand that our leaders behave in a way that merits our trust.
In the long-term it is only through value-driven leadership that our corporations and our governments will begin to reap the benefits of social cohesion and sustainable economic growth.
Sources:
• Global Integrity Survey 2013, KPMG, http://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/Documents/Integrity-Survey-2013-O-201307.pdf
• Lack of Leadership, Shiza Shahid, Trend 3, Outlook on the Global Agenda 2015, World Economic Forum, http://reports.weforum.org/outlookglobalagenda2015/top10trendsof2015/3lackofleadership/
• Leadership Communication Monitor, Ketchum, https://www.ketchum.com/ja/leadership-communication-monitor-2014
• Outlook on the Global Agenda 2014, Trend 7, World Economic Forum, http://www3.weforum.org/docs/WEF_GAC_GlobalAgendaOutlook_2014.pdf
22 October 2015
About Amrop Landelahni
Amrop Landelahni is a black-owned executive search firm, with Level 1 BBBEE credentials. It is a subsidiary of Landelahni, a group of black-owned companies providing a range of executive search, leadership assessment and coaching services in more than 20 key markets across Africa.
With offices in Johannesburg and Nairobi, Amrop Landelahni is the Africa partner of Amrop, one of the world’s largest retained executive search partnerships with 80-plus offices in more than 50 countries.
Author: Viv Segal from Sefin Marketing.
More Info link: http://www.amroplandelahni.com
Images: For high res version/s of One image/s please contact Sefin Marketing.
Sandra Burmeister, CEO, Amrop Landelahni Photo: Landelahni
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