5 Pearls of Wisdom for the CEO on building CORPORATE INTEGRITY
Integrity is “the practice of being honest and showing a consistent and uncompromising adherence to strong moral and ethical principles and values” (Wikipedia). We usually admire and inherently trust a person that displays this quality, but it’s probably difficult for anyone to vouch for more than a handful of people who fit that description.
Bearing in mind that personal Integrity is a scarce quality in our times, how can we attain corporate Integrity, which is a result of the actions of hundreds or thousands of employees every day?
I often posed this question to myself: How can I possibly make sure that every decision and action in my organization is honest, morally and ethically correct? Experience taught me that I couldn’t. The truth is that corporate integrity is a practice to which you have to be committed and not “a perfect state of integrity wholeness” to be attained. It entails having a “corporate integrity compass” that strongly pulls you back to the right path every time.
These are 5 pearls of wisdom on developing corporate integrity:
Pearl #1: Have a higher purpose for your organization
When your organization’s decisions and actions are driven by a higher purpose, other than maximizing profit, you are holding yourself and your colleagues to higher standards as well. You are aligning everyone behind something that transcends individual needs, and inspires them to give their best. You hire employees based more on shared values and less on expected performance. Overall, you build a culture that responds to the challenges of a purposeful mission. Because of this purity of intention, deviations from a shared “integrity compass” are less likely, although never non-existent.
On the other hand, in an organization that puts profit as the main purpose, why should employees care about anything other than their own needs? In its worst form, you build an “every man (or woman) for himself” culture. Everyone carries their own compass.
Being a non-profit organization is not a purpose. I have seen extraordinary financial results in a for profit organization with a strong “integrity compass”, and lack of ethics in a non-profit organization that lost clarity of purpose.
Pearl #2: Build an Ethics Framework but Lead and Operate on Trust
There has been an increase in laws and regulations to prevent fraud, corruption and unethical conduct in the corporate world. Codes of Ethics, anti-corruption policies, process control and audits, mandatory workforce training, hotlines, etc. are being implemented across all industries. In my experience, none of these measures will have a significant impact if the underlying principle is that employees will not do the right thing unless closely supervised, and that undesirable behavior can only be curtailed by exposure and punishment. However, these measures will severely impair your employee’s good judgement, creativity and risk taking, thus making your organization less agile and innovative.
An empowered workforce, one capable of successfully taking your organization through a digital transformation, for example, requires high levels of trust. Not only in your peoples’ capabilities, but also in their ability to make the right call when no one is watching over their shoulders or telling them what to do. I have seen extraordinary, amazing performance from people wanting to show me that the trust bestowed upon them was well deserved.
Nevertheless, trust is not a blank check. A clear statement of values and expected associated behaviors, ethical guidelines, simple process controls, spot check supervision, continuous compliance training, and zero tolerance of improper or illegal conduct provides a solid framework (corporate integrity compass) and a common understanding in which people will feel safe to act.
Pearl #3: Set the tone at the top with clear messages and the right incentives
Corporations are not corrupt or unethical, people are. We tend to blame external factors, such as a poor educational system or lack of regulation, for the increasing fraud and corruption scandals unearthing today. Collectively, we must work on building family values, better education and enforceable laws and regulations. But real change will only come from every individual taking responsibility for building their own character, practicing integrity in their everyday lives, and holding themselves accountable for their actions.
This was the hardest concept for me to understand as a leader. Integrity is an individual’s life-long practice that is put to harder and harder tests as the individual’s power and influence increases. As a top leader, when setting goals and deadlines, you must hold yourself accountable for the messages you give, the pressure you exert, the incentives you provide. It’s critical for you to be explicit – not vague- about the right way to achieve them. Take personal responsibility for the “tone at the top” that you are setting in your corporate integrity compass.
Pearl #4: Build corporate resilience
Corporations are facing increasing pressures to deliver returns for investors. Survival rates are decreasing as disruptive competition capture market share from the incumbents. CEO incentives tied to short term financial performance have been rising in the last two decades, as corporations are on the lookout for “hot shots” that will deliver just that, quickly and swiftly. There is less and less tolerance for the natural highs and lows of doing business in an environment of accelerated change. These “shortcut” pressures are in opposition to the longer path that corporations must be willing to take to preserve corporate integrity.
To win the race in the long run with integrity, you need to build a resilient organization. One that is steadily focused and aligned behind the business strategy, but flexible enough to adapt to market shifts and disruptions. One that understands that it will face setbacks, but believes in its capability to respond immediately with positive actions. A corporation that develops creative and innovative capabilities in their work force, and a culture that prides on gaining the upper hand from what seem impossible situations again and again.
Pearl #5: Be a corporate integrity activist
Today, it’s not enough to be a corporate leader with an integrity compass for your organization. Capitalism is at risk as populism is embraced as a reaction to high profile cases that reveal lack of ethics and integrity as part of formal corporate practices. There’s a need for corporate leaders to be vocal about their commitment to conscious capitalism. To publicly sanction wrongdoing from their peers, and to actively participate in forums where best practices are promoted.
This not only takes time, but also courage. You’ll be met with sarcasm and disbelief. You’ll need to disclose your failures. Maybe, you’ll have to come to terms with the end of dear relationships that remain in the old paradigm. But only by being part of a movement towards a new way of doing business, will we be able to guarantee a world where individual freedom to create value for all prevails.
Mariana Rodriguez Risco
- Twitter: @mrodriguezrisco
- LinkedIn: https://www.linkedin.com/in/mariana-rodriguez-risco
- Blog: http://marianarodriguezrisco.com