From Ethical Leadership Toward Leading Sustainably

11 november 2019

Column

By Richard Bistrong,  Front-Line Anti-Bribery LLC, and former FCPA Violator and FBI/UK Cooperator, Chair of the day at ICC’s Integrity and Anti-corruption Conference on Friday, 6 December 2019                                               

These have been challenging times for corporate integrity. Despite years of activity and the commitment of resources to build corporate compliance systems, ethical scandals are as numerous as ever, hurting innocent employees and customers, and damaging the financial value of multinationals. Meanwhile, the perils of global warming, economic inequality, political polarization, and haphazard international governance are increasing, and corporations are struggling to respond. These forces are making operating in stable and ethical environments ever riskier for multinationals, and less predictable than ever.

But that’s not a reason to give up, or give in, to apathy or frustration.

While some structures are under stress, overall, global transparency has reached an all-time high, along with the expectations of corporate leadership in our world of hyper-transparency. It is certainly clear that corruption is not just a problem for developing countries, and that compliance systems and processes cannot work unless driven by bold, ethical and sustainable leadership. A profound shift in values is underway as young people look to lifestyles which embrace social awareness; on the job front, they seek employers whose products, services and strategies can foster a shared sense of purpose, and whose values they cherish as much as their brands.

In addition, human rights protections are becoming enshrined in law and a part of our global supply chains, even if the journey is imperfect. Companies are working to measure how they impact the environments in which they operate, and how they can build value not just for themselves, but for the communities in which they operate. Investors are focused on rewarding good performance against environmental, social, and governance measures, widening the traditional measures of success as solely based on metrics such as balance sheets and earnings per share.

Regulators are taking note as well.  The recent “Evaluation of Corporate Compliance Programs” as issued by the United States Department of Justice asks, “How has the company incentivized compliance and ethical behavior? How has the company considered the potential negative compliance implications of its incentives and rewards?” Those are questions that would have traditionally been considered business issues, outside the remit of ethics and compliance leaders. The recent revisions in the UK Stewardship Code and Corporate Governance Code also make it clear that that business leaders and their Boards have a responsibility to align compliance polices with business strategy so that no employee thinks that they have to sacrifice integrity to succeed. We are indeed in a world of new expectations.

And to survive and thrive over the long term, today’s corporate leaders need to show vision, courage, and integrity as never before. This means building inclusive organizations where employee concerns about operations are heard, where ethical gray areas are debated before employees are in the middle of risk, and where corporate values are more than just ‘wall values,’ but come to life through everyone’s decision-making. That might sometimes require walking away from lucrative, yet unethical, opportunities, where risk and potential success cannot be deconflicted. As I heard one business leader state, “lose a sale, ok, lose my team, that’s not ok.” With such rising expectations of both internal  and external stakeholders, companies can no longer argue that legal compliance is sufficient. An ethical organization needs a sustainable corporate narrative, in addition to a legal one, in order to address our ever-changing world of risk and reward.

In this context, the 2019 ICC International Integrity and Anti-Corruption Conference could not be timelier. The agenda is critically important, and I am thrilled and honored to be Chairing the conference, which is an event that features some of the most advanced thinking on corporate ethics. We will hear from  OECD Deputy Secretary General Mr Ludger Schuknecht, and as we continue to see, the OECD remains steadfast in leading global anti-bribery  and ethical initiatives, calling attention to countries that have fallen short in  anti-bribery enforcement and legislation, while bringing together thought leaders in fields as diverse as behavioral research and whistleblowing, to name a few.

Alex Brenninkmeijer, Member of the European Court of Auditors, Professor at University of Utrecht,  and author of the book ‘Moreel Leiderschap’ (2019, transl. ‘Moral leadership’), will address ethical leadership, among other morning plenary topics, including what it means to set ‘tone at the top,’ and the role of women in anti-corruption initiatives. After lunch and what is always a robust networking session,  there will be multiple workshops, where attendees can choose among topics including the convergence between anticorruption and human rights efforts, exploring tone at the top, reviewing the blind spots that can afflict leadership, and how to build on existing collective action with respect to integrity. Our speakers and participants will discuss, debate, and share ideas to advance the cause of ethical leadership and sustainable integrity!  I very much look forward to meeting you all—and to participate in a conversation that will help us to continue to build the future we all want to see.