Opportunities and Challenges for Ethical Leadership

L-R: Professor Ian O. Williamson, Dean and Pro Vice-Chancellor, Victoria Business School; Professor Karin Lasthuizen, Brian Picot Chair in Ethical Leadership and Professor Grant Guilford, Vice-Chancellor, Victoria University of Wellington.

New Zealand may consistently score first on Transparency International’s annual Corruption Perception Index, but it should not be complacent and could still aim higher. So said Professor Karin Lasthuizen in her inaugural public lecture at Victoria University of Wellington’s Brian Picot Chair in Ethical Leadership.

“There are new risks to our integrity that we should not be naïve about,” Lasthuizen told her audience at Victoria Business School, where she is in the School of Management.

“Our geographical isolation might have helped New Zealand to create its own culture and good ethics, and it might have protected us for a long period of time, but this has changed – nowadays people can be here much faster and social media brings other worldviews within a mouse click.”

Other factors to consider range from increased international trade, “including doing business with more corrupt countries in the Asia-Pacific region” to “new generations, like the millennials, [that] have a different outlook: what is considered ethical now is not the same as 20 years ago.”

Transparency International New Zealand (TINZ) is proud to have Karin as its Independent Chair of Ethics.

Before joining Victoria University of Wellington at the end of 2016, Lasthuizen was an associate professor within the Integrity of Governance research group at Vrije Universiteit Amsterdam in the Netherlands.

The Brian Picot Chair is named for a business leader who made his mark as director of major supermarket company, Progressive Enterprises and several other companies. Picot, who was known for his strong sense of ethics and concern for others, died in 2012.

Ethical Leadership is part of the antidote for corruption

Professor Lasthuizen’s lecture was entitled Leading for Integrity: Opportunities and Challenges for Ethical Leadership in Aotearoa New Zealand and drew on findings from interviews with 40 chief executives and other high-ranking figures she and colleagues conducted.

“In my view, we can become more aspirational than we are now,” said Lasthuizen. “And here I see an ethical leadership opportunity. We all know that the tone at the top in organisations is crucial and we are fortunate to have many leaders with strong integrity – within the public service, private firms, not-for-profit organisations and within our communities. By investing in ethical leadership, we can put ethics more explicitly on the agenda and raise the bar across sectors and organisations.”

One of her interviewees, Financial Markets Authority Chief Executive, Rob Everett, said “Ethical leadership is about ethics being very core to everything and not added on, and it’s about demonstrating those beliefs at every possible opportunity.”

“In many organisations, integrity management equals legal compliance and following rules, which is just a bottom-line approach,” said Lasthuizen. “Some things might be legal, but is it also ethical, the right thing to do?”

“A values-based approach for integrity management seems to be more promising when it encourages us to talk about what good ethical behaviour looks like and to share good practices. Because we can only maintain our high integrity standards when we want to excel and do the right things all the time.”

“What makes Wellington unique are the close connections between politics and the public, not-for-profit and private sectors,” said Lasthuizen. “Like many say, Wellington is ‘a small village’: everybody knows each other – within only two degrees of separation. Professional networks consist of strong ties and personal relationships. It creates a typical Kiwi culture of social cohesion, friendly people, easy interactions – and many catch-ups over coffee.

“The downside, however, is that in this micro cosmos the market of supply and demand is not optimal, and this increases the likelihood of conflicts of interest, intermingling of politics with the public service, nepotism in recruitment processes, and favouritism within work environments.”

Lasthuizen highlighted an urgent need for a more diverse pool of leaders and managers, and connected ethical leadership to “our social responsibility for people and the planet and for future generations”.

Being low in corruption (as measured by the Transparency International Corruption Perception Index) is not the same as being high on ethics, she said.

“Are we doing the right thing and making the most of it in terms of welfare and wellbeing for each and every one in our society?”

Lasthuizen says ethical leadership means those issues need to be addressed, and an ethical culture created “where we can have those conversations in a polite way and where we can give that feedback or have critical discussions. I don’t have the answer yet as to why people here don’t see that kind of question as the start of an open conversation.”

Editor note: members of the Institute of Directors New Zealand can read a related article “The importance of ethical leadership” in the June/July issue of Boardroom magazine. 

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