Leadership in the 21st Century
Harlan Cleveland

Introduction by Richard Farson

Richard Farson
Welcome to the plenary extension of the conference on leadership conducted by Harlan Cleveland. So welcome, once again, Harlan. We look forward to a discussion of the profound, but often invisible, changes in the nature of leadership for this century, and the crucial difference that may make in both organizational life and in world events. We are especially interested in your opening segment on the issue of the day, ethics in leadership. As always, we will be looking for the implications that the ILF might uncover and communicate to others in influential positions.

Important Ethical Questions

Harlan Cleveland
Ethical lapses by the leaders of a few very large corporations are providing the headline news. Evidently they have been enriching themselves and each other by insider trading and accounting gimmickry--threatening bankruptcy to their companies, racking up huge losses to stockholders and retirement plans, and creating worldwide worries about American capital markets.

The star players in this continuing drama are what I call public executives--leaders in every kind of organization who have responsibilities affecting the public interest, whether they are employed by a business enterprise, a nonprofit institution, or a government agency.

Ethical decisions are essentially personal. Yet when our ethical decisions affect other people, the judgment is ultimately rendered by other people; the ultimate court is public outrage.

In one of the essays in my book Nobody in Charge, I explored how "public executives" can know they are acting ethically. Based on my own experience--which is certainly not definitive, but I have avoided both public obloquy and jail time--I developed two questions to ask myself just before getting committed to any action.

The first question: "If this action is held up to public scrutiny, will I still feel it is what I should have done, and how I should have done it?" The other question: "Does this action depend for its validity on its secrecy?"

These executives, accountants, and lawyers we keep reading about--if they had asked themselves these questions, would they have done what they did?

What personal ethical standards do you live by? What questions do you use to test your own behavior? Do these questions, my personal bits of litmus paper, work for you?

You'll find the reasoning for my first question in Chapter 12 ("The Very Definition of Integrity") of Nobody in Charge. The quote is from Charles Van Doren, who famously cheated to make a TV quiz program successful. You can get directly to those pages by clicking on this hyperlink: Integrity Excerpt

Over to you…..

Participant
Since I am lately not really leading any significant number of followers, my comments are not weighty. But my response, Harlan, is that your questions are right on, and asking them while leading would surely stimulate the asker's awareness of the possible impact of what s/he was doing.

Since I am non-religious (even anti-religious) I don't refer to any holy books for my "ethical standards." Some statements from those books are useful, though: do unto others as you would have them do unto you. This seems to keep me out of trouble. Especially if it is not restricted to nearby others, like fellow executives, but generally, especially to those I have responsibility for leading. I have become in my old age devoted to telling the "truth." I know there is no way to "know" truth, but at least I can tell it as I see it, and not temper my remarks to my guess about the audience's belief systems. I can speak my actual best effort to discern what is true, and keep my mind open to be corrected.

These responses to your first question seem simple minded, but I think they work. I'll try to answer your next questions in another comment.

Participant
Harlan, your questions do it for me. I want my "public acts" to be subject to public scrutiny and I really abhor secrecy in connection with any public act. Of course, I don't know how honest I am with myself, but I try.

I thank you again for these questions, and I hope our conference will develop means for getting them to be asked by all leaders throughout our government and society.

Participant
As much as the public would like to always know everything about a company the reality is: in a competitive environment, secrecy, in certain circumstances, is essential. Obviously this is not intended as an excuse to avoid required disclosures.

What should be done about the investors who were hugely enriched (remember for every buyer there is a seller) as a result of the corporate misdeeds?

There was enough information available, even with the deceit, to avoid investment in these companies. Irrational greed allowed the investors to see what they wanted to see. Having met personally with a number of Enron executives over the years both their arrogance and business model seemed to defy common sense. The point is, the current situation with corporate America is more complex and involves in large part the influence of a hyper inflated market on the investing public. Isn’t greed also a matter of integrity for these investors?

These executives, accountants, and lawyers would still have acted the way they did because the important question to them was, will I get caught? And if I do, is the penalty worth the reward?

Public scrutiny also assumes the public is right. Often acts of leadership are heroic because they are done contrary to public standards.

Participant
There is a bit of redundancy in Harlan's two test questions. Perhaps that is useful. I recall reading somewhere a single test question that had something to do with acting in broad daylight vs. darkness. Same idea.

Like most of us, I suspect, I don't have a set of ethical principles about which I've thought a lot. I was taught to be honest with everyone, never to take an unfair advantage, etc., and I've made my decisions accordingly, intuitively.

The hardest one that I remember was when I violated the spirit of a State law (but not its "letter", I believe) because I thought that to do otherwise would hurt more people, unjustly, than the alternative. I've often wondered if it was the right choice. [Details on request, but they aren't all that significant.

This conference was longer than most of our other conferences, so rather than have you, the reader, stuck with going from page to page through a navigation system, the Digest is making the conference available in it's entirety as a downloadable MS Word document.

Just click here to transfer it to your own system.

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