A moral compass on the dashboard
Jul 16th
by Andrew Jackson
Integrity is an essential quality of any good leader. The banking crisis brought to the foreground the importance of the right culture and acting with principle. One international investment bank leader kick-started culture change by telling all its employees he regretted profitable decisions made in the past that were not in the clients’ best interests, whatever the prize at the time.
Few of our national institutions have escaped scrutiny of their integrity – as well as bankers, politicians, the police, journalists, the BBC, even the NHS.
Certain climates, as the investment banker highlighted, present daily tests of integrity. Praise, power, success and financial rewards together are a powerful motivator. The danger is that doing wrong becomes the norm; when it’s institutionalised, even rewarded, the moral compass is easily broken.
What no-one knows yet is the answer. Banks have worked hard over the past few years to improve the culture, but they’ve worked harder to make cast-iron lending decisions. Policing the media presents threats to cherished freedom of speech, as we’ve seen with the new Google ‘right to forget’ that’s being used in practice as a right to ‘take down anything I don’t like being said about me’.
It’s worth remembering that Enron had perfect scores on all the standard measures of good Board performance. It’s just that nobody was measuring their moral performance. What we measure should be what’s important.
Business has shown itself capable of rising to some of the challenges of corporate social responsibility. Perhaps we should take this one step further and encourage businesses to take their moral responsibilities more seriously. Perhaps a moral compass could be part of their management dashboard.
How do they define their moral responsibilities? How fully do they practice them? Do they have the right systems, people and processes in place to support them? What are the risks? Just as the UN has a corruption leagues for countries, let’s have a FTSE 100 of companies that take their moral and ethical responsibilities seriously. And some serious independent audit behind it.