Imagine you are a director on a corporate board. What proper practices should you adopt as guidelines for your own directorship?
A number of answers might come to mind, depending on the nature of the organisation and its particular board members. But ultimately, in order to sustain organisational performance in a highly uncertain world, I can think of no better starting point than ethical leadership.
With its clear focus on ethics, honesty and integrity, ethical leadership supports board members so that they think and behave in the right way to benefit both the organisation and society.
Some might think this is conferring a larger-than-life role on directors since, generally speaking, they do not run the corporation by themselves. They support management to properly manage the business.
But the fact is that directors are at the top of the tree, and they can certainly be true leaders in this important mission of managing a corporation, as long as they consider behaving according to the following suggestions:
Adhere to a personal code of conduct: Although directors are appointed by shareholders, usually during an annual general meeting, some directors might lose sight of why they were chosen. The role comes with great responsibility and accountability, and is not a position that one can take advantage of for personal benefit.
"If the first button of one's coat is wrongly buttoned, all the rest will be crooked," the 16th century Italian philosopher Giordano Bruno observed. In other words, if directors do not have a mindset that values responsibility and accountability, they will find it difficult to get others to behave in a similar way. Therefore, directors must stand firm on their own personal code of conduct.
Respect established norms and principles: Every organisation has practices, both written and unwritten, that are part of people's daily life in the workplace. They should not be easily changed unless there is good reason to do so, such as a major transformation in response to a financial or other crisis, such as those that many businesses faced in 1997 and 2008.
This does not mean that things cannot be changed, but it needs careful and thorough consideration first. Directors must be aware of the complexity of the issue. Not only should they not act prematurely, but also they should raise concerns if they are presented with an initiative of this nature.
Strive to enhance corporate values and culture: "Culture eats strategy for breakfast," the management theorist Peter Drucker once said. Culture and corporate values are critically important and require special attention from the board. They are usually expressed in terms of statements and conceptual beliefs regarding good qualities and practices that all members of the organisation should adhere to.
In other words, they are the about the same things an ethical leader should believe in and practice. Consequently, board members must find a proper way to enhance and promote corporate values and culture whenever they can.
Promote effective communication with regular meetings: Since directors do not manage the organisation by themselves, communication is a crucial managerial tool for them. In order to express their views to the CEO and executives productively, directors should have regular and scheduled meetings.
Discipline at the meeting is also important. Directors should send the right signals about ethical behaviour by starting meetings on time and finishing at a pre-agreed time as well. They should talk turkey and be present for the whole session without leaving the room to take phone calls or deal with any other distractions.
When board members participate in this way, not only are they acting as role models for executives and others but also, when the time comes, they will be able to make quality decisions, too.
Recognise former contributors: The famous book by Marshall Goldsmith, What Got You Here Won't Get You There, tells us how some successful people do not succeed a second time because they become trapped in the ways that enabled their past achievements. It is sad but true that people often forget former achievers who contributed a lot to the organisation if they are no longer on the scene.
Directors should encourage and support the adoption of a suitable platform to express respect and recognition for the organisation's former heroes who contributed and helped it to grow, and can serve as role models for current employees.
Promote knowledge dissemination: Properly managing knowledge in the organisation is a critical issue for a board. "Knowledge itself is power," said Sir Francis Bacon, the 16th century English philosopher.
Besides internal knowledge resources and knowledgeable people, board members, as ethical leaders, should seek out knowledgeable people outside the organisation who could offer valuable advice. Since directors usually have broad contacts in the business world, they can be very helpful to the firm in this aspect.
The above six-point approach is a solid foundation for any director who wants to perform as an ethical leader.
You may have noticed that the "hard" issues are not included in the above suggestions, since having the experience and knowledge to deal with business challenges is considered a mandatory qualification for a board member in the first place. But when it comes to "soft" skills, directors who practise the ethical leadership concept can make themselves even more valuable as role models.
Sorayuth Vathanavisuth, PhD, is Principal and Executive Coach at the Center for Southeast Asia Leadership. His areas of interest are executive coaching, leadership development, succession planning and corporate culture. He can be reached at sorayuth@sealeadership.com