ADDRESS
BY PSOJ PRESIDENT CHRISTOPHER ZACCA
HRMAJ CONFERENCE LAUNCH OCTOBER 8, 2013 KNUTSFORD COURT HOTEL
HRMAJ CONFERENCE LAUNCH OCTOBER 8, 2013 KNUTSFORD COURT HOTEL
SALUTATIONS
I am honoured to have
received the invitation to be here today. Not only is this the launch of your
annual Conference, but today is also recognised as Human Resource Management
Day and I am pleased to have been invited to celebrate with you. Apart from
assisting management in optimizing
employees' skills and creating an efficient, stable workplace, HR managers such
as yourselves also serve the key purpose of bridging the divide between
employees and managers. Without your group, I’m sure we’d have chaos, possibly
anarchy in many companies.
“Remodelling the present – changing the future.” This is such an apt theme,
given where the country is collectively; we’re trying to desperately revive,
some people would say jump-start our economy, realise strong economic growth
and add more jobs. As a country, we need to remodel our fiscal approach and
adapt a more sustainable method of managing our finances, so that we may create
a better future for our children and grandchildren.
Central to this idea of change is leadership. What kind of leadership do we
need to ensure our country’s growth and survival for years to come?
Quite simply, we need ethical
leadership. A leader is expected to embody the purpose, vision, and values of
the organization and of its constituents, within an understanding of ethical
ideals. He or she is expected to connect the goals of the organization with that
of the internal employees and external stakeholders. The leader’s example
therefore sets the culture of the organization and its future prosperity.
What is meant by
ethical leadership though? Well many executives and business thinkers believe
that ethical leadership is simply a matter of leaders having good character. By
having “the right values” or being a person of “strong character,” the ethical
leader can set the example for others and withstand any temptation that may
occur along the way. Without denying the importance of good character and the
right values, the reality of ethical leadership is far more complex and the stakes
are much higher.
The Business Roundtable
Institute for Corporate Ethics, an independent entity in the United States that
works with CEOs of leading corporations, published an article which provided a
framework for developing ethical leadership. Ten key areas were listed and
while all are important, I would like to highlight five elements that I believe
Jamaican CEOs and COOs can utilize, in their efforts to become ethical leaders.
1. Articulate and embody the purpose
and value of the organization. It is important for
leaders to tell a compelling and morally rich story, but ethical leaders must
also embody and live the story. This is a difficult task in today’s business
environment, where thanks to social media and advanced technology, everyone
lives in a fishbowl, i.e. on public display. So many political leaders fail to embody
the high-minded stories they tell at election time, and more recently, business
leaders have become the focus of similar criticism through the revelations of
numerous scandals and bad behaviors. The fact is, CEOs and other business
leaders in today’s corporations are really ethical role models for all of
society.
2.
Focus
on organizational success rather than personal ego. Ethical
leaders understand their place within the larger network of constituents and
stakeholders. It is not about the leader as an individual, it is about something
bigger—the goals and dreams of the organization. Ethical leaders also recognize
that value is in the success of people in the organization.
In
1998, in a bold gesture demonstrating how he valued the company’s line
employees, Roger Enrico, former Chairman and CEO of PepsiCo, chose to
forego
all but $1 of his salary, requesting that PepsiCo, in turn, contribute
$1
million to a scholarship fund for employees’ children. The point of this
example is not that ethical leaders donate their salaries to charities, but rather
that ethical leaders identify and act on levers, such as employee loyalty, that
drive
organizational success.
3. Find the best people and develop
them. Ethical leaders pay special attention to finding and
developing the best people, precisely because they see it as a moral imperative
– helping them to lead better lives that create more value for themselves and
for others. Finding the best people involves taking ethics and character into
account in the selection process.
Many
CEOs and HR Managers believe that judging someone’s integrity is far more
important than evaluating their experience and skills. Yet, in many
organizations,
employees are hired to fill a particular skill need with little
regard
to issues of integrity.
4.
Create
a living conversation about ethics, values and the creation of value for
stakeholders. Too often business executives think that
having a laminated “values card” in their wallet or having a purely compliance
approach to ethics has solved the “ethics problem.” I’m sure Bernie Madoff, maybe
even Cash Plus and other troubled companies had these systems in place. What
they didn’t have was a conversation across all levels of the business where the
basics of value creation, stakeholder principles and societal expectations were
routinely discussed and debated. There is a fallacy that values and ethics are
the “soft” part of management. Nothing could be further from the truth.
In
organizations that have a live conversation about ethics and values, people hold
each other responsible and accountable about whether they are really living the
values. And, they expect the leaders of the organization to do the same. Bringing
such a conversation to life means that people must have knowledge of alternatives,
must choose every day to stay with the organization and its purpose because it
is important and inspires them. Making a strong commitment to bringing this
conversation to life is essential to do if one is to lead ethically.
5.
Create
mechanisms of dissent. This is especially important for
your group, as it is through you that employees express their dissatisfaction
with company policies. It is critical to have an established and explicit way
for employees to “push back”. This needs to be made part of the organizational
culture, not just a line item in a whistle blowers document. And the best way
to do so is through encouraging open and honest feedback, while maintaining
respect, without the fear of any backlash.
In
a company that takes its purpose or values seriously, there must be mechanisms
of pushing back to avoid the values becoming stale and dead. Indeed, many of
the current corporate scandals could have been prevented if only there were
more creative ways for people to express their dissatisfaction with the actions
of some of their leaders and others in the companies.
These five elements may appear to
involve lots of tough decision making but the truth is, ethical leaders
inevitably have to make difficult decisions, from reorienting the company’s
strategy and basic value proposition, to making individual personnel decisions
such as working with employees exiting the organization. Last month at our
Annual Economic Forum, guest speaker, Professor Peter Blair Henry, Dean of the
Stern Business School at the New York University, spoke about discipline,
clarity and trust being the formula for turning around the economy, and made
the point that our leaders should also embody these key qualities. He said that
a leader who possessed these would be better able to make the tough but
necessary decisions that are required to effect positive change, not only in
our economy, but across our entire country. And I agree 100%. Ethical leaders
should never attempt to pass off or rationalize difficult decisions by using excuses,
but should instead focus on “doing the right thing,”
all while exhibiting
discipline, clarity and trust.
So
what are the benefits of ethical leadership? Well first of all, and this is
probably the most important point, an organization is much less likely to run
into financial difficulties if its leadership acts ethically.
Secondly,
long term profit or sustained profit-making is usually based on ethical
behaviour that brings company goodwill among its stakeholders. It is also
directly related to better relations at the workplace leading to efficient
enterprises because of more cooperation, less waste, and more initiative and
responsibility by employees, as well as goodwill and stronger brand names for
enterprises.
In
addition, companies that behave ethically are more socially responsible and
benefits are spread across the board to all stakeholders. For example, to
employees through additional benefits such as share options, to customers
through the timely delivery of quality goods and services at reasonable prices
and to shareholders through increased dividends.
The
good news is that our universities have recognised that good business ethics is
not innate in all of us, and have embraced the importance of training and
educating our current and future leaders in good business ethics. UWI, UTECH
and UCC all offer a variety of courses in the legal, social, and ethical
aspects of business.
The
PSOJ has also joined the efforts to expose our business leaders to proper
leadership ethics. Through the work of our Corporate Governance Committee, we have made
ground-breaking strides in raising the level of awareness of good governance
among our member companies and other private sector interests in Jamaica. Among the objectives of the Committee are:
·
to
develop and establish corporate governance guidelines that will facilitate
implementation of best practices through a Code on Corporate Governance,
·
to
conduct director training programmes, to promote awareness of corporate
governance principles and the impact that well implemented principles can have
on investor confidence,
·
to
provide continuing public education and awareness of corporate governance best
practices,
·
to
make corporate governance knowledge resources accessible to relevant
stakeholder groups and
·
to
collaborate on a continuing basis with other associations and agencies locally
and regionally on corporate governance issues.
The PSOJ’s Code on
Corporate Governance, first published in 2006 and the second edition, published
in 2009, also represents our attempt to infuse globally accepted best practices in governance in
Jamaican companies. In the current
economic climate, we must become more efficient and competitive if we are to
attract foreign direct investments and/or promote local investments. Good governance of our companies and indeed
our government is therefore at the heart of our competitiveness.
So as I close, let me once again thank you for having
me address you this morning. As a private sector body that represents hundreds
of companies, we are certainly pleased to be associated with a group such as
yours. Perhaps you should consider becoming a member of the PSOJ, we would
definitely welcome you with open arms into our organisation. Congratulations on
your upcoming Conference and we wish you a very successful event
Thank you.
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