E&C Pulse - January 24, 2019

 
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TOPICS OF CONVERSATION
 
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Are Corporate Leaders Ready to Be Moral Leaders?

profile_pics_5In a world rife with division, uncertainty and rapid change, people are clamoring for moral leadership to help navigate these turbulent and unpredictable times.

As traditional sources of moral leadership--government, religion, education--wane in either the public’s esteem or because they no longer desire to lead, or are leading poorly, more people are turning to business executives to articulate principled stances on vexing societal issues.

LRN’s upcoming State of Moral Leadership in Business 2019 report shows, in most cases, they are not getting it. We surveyed 1,100 people at all levels of a company--executives, managers, employees--and 87% said the need for moral leadership in business was greater than ever.

Unfortunately, just 7% said their leaders always or often acted with a sense of moral leadership.

Formal authority used to be sufficient to get people to do the next thing right, but only moral authority can get people to do what is right in this highly interconnected world, Dov Seidman, LRN’s founder and chairman, stated in the report.

“In our now-interdependent world, formal authority is less potent,” Seidman wrote. “Only moral authority can build trust, inspire colleagues, create meaning, or help people imagine a different and better future--in other words, enabling them to do the next right things.”

This desire is reflected in the 2019 Edelman Trust Barometer. It found three-quarters of the general population want CEOs to lead on the change that is happening, and not wait for government to take initiative. 

Seventy-one percent of employees said they want their CEO to show leadership in challenging times, while 67% said they expect the CEO to take action on major societal issues.

There is a business case for doing so, Edelman found, as employees who have trust in their employer will advocate more forcefully, be more engaged and remain more loyal and committed than workers who don’t have that level of trust.

“This significant shift in employee expectations opens up an enormous opportunity for employers to help rebuild societal trust,” Richard Edelman wrote. The report sets out a path for how CEOs can exert their influence, including speaking up on important social issues, setting goals that attract socially aware employees, empowering workers, and by focusing on local projects.

This is a “fundamental rebalancing of the employee-employer relationship, shifting from top-down control to one that emphasizes employee empowerment,” Edelman wrote.

“In a full employment economy, an employee has more freedom to choose the kind of workplace they are now coming to expect, one where values and the power to make change are a given,” he said. “This is the path that business must follow to help restore trust, the greatest moral challenge of our era.”

Adding his voice to the chorus, Black Rock CEO Larry Fink, last week in his annual letter to shareholders, exhorted his fellow CEOs to get in the game and fill the leadership void.

“As a CEO myself, I feel firsthand the pressures companies face in today’s polarized environment and the challenges of navigating them,” Fink wrote. “Stakeholders are pushing companies to wade into sensitive social and political issues--especially as they see governments failing to do so effectively. As CEOs, we don’t always get it right. And what is appropriate for one company may not be for another.

“One thing, however, is certain: the world needs your leadership. As divisions continue to deepen, companies must demonstrate their commitment to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity,” Fink said.

“Companies cannot solve every issue of public importance, but there are many--from retirement to infrastructure to preparing workers for the jobs of the future--that cannot be solved without corporate leadership.”

Seidman makes clear that moral leadership is not about moralizing, or just taking a stand on a controversial issue; CEOs have to go beyond that to make a real impact.

“Moral leadership is rooted in and guided by a moral framework and a set of principles that inform how leaders approach everything they do: how they interact with others, how they make decisions, how they manage and conduct themselves,” Seidman wrote.

“Above all, moral leadership is about how leaders touch hearts, not just minds--how they enlist others in a shared and significant endeavor and create the conditions where everyone can contribute their fullest talent and realize their deepest humanity.”

 

Ben DiPietro
@BenDiPietro1
ben.dipietro@lrn.com

 

 
MIND NUMBERS
 
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The annual Edelman Trust Barometer shows workers are looking to their companies and its top executives to take leadership positions on tough social issues. The report found 58% said they see their employer as a source of trustworthy information on divisive social issues, while 67% expect prospective employers to take action on such issues.

 

 
WHAT'S NEWS
 

An analysis made public during a gender bias lawsuit against Oracle found the software company reportedly paid women employees on average $13,000 less than male counterparts doing similar jobs, Wired reports. The Department of Justice accused the company of wage discrimination, CNBC reports. Salary transparency may be one way to help bridge the gap, Kristin Wong writes in The New York Times.

Scientists wonder if they will be able to prevent more researchers from gene-editing human embryos, The New York Times reports.

A report from the World Economic Forum says it may cost the U.S. government around $30 billion in the next 10 years to retrain workers whose skills are displaced in the fourth industrial revolution.

Offensive tweets from the new male editorial director of Gawker prompted the outlet's two full-time reporters--both women--to resign in protest, Daily Beast reports.

There's been lots of discussion at the annual Davos gathering about whether global rules are needed to regulate technology companies, The New York Times reports.

The new government in Armenia resurrected a Panama Papers investigation against a powerful political figure and his involvement in three offshore companies, ICIJ reports.

Is it wise to keep trade compliance in its own silo, away from other risks? Mike Volkov answers the question in his blog.

 
FROM THE
WORLD OF LRN
 
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Read LRN's latest blog to learn why compliance is often viewed as a business impediment when it clearly can save money in the long run by getting involved early and flagging issues.

CLICK HERE READ NOW →

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Bad Blood author John Carreyrou recently sat down with Dov Seidman for a #HOW Matters Conversation to discuss what has been called the greatest fraud since Enron. In this video clip, John Carreyrou discusses Theranos' toxic culture. 

WATCH TO LEARN MORE →

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