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The REAL Solution to Corruption and Bribery: Building an Ethical Culture

17th July 2015 | John Knights

Leadership Assessment for Talent Development, co-edited by John Knights, describes a journey based on research and practical experience that leaders should take to be the best they can be. These are people who lead beyond their ego to be radical, ethical and authentic; transpersonal leaders. In this article, John Knights explains that only by developing transpersonal leaders can we find a long term solution to the global bribery and corruption crisis.

The REAL Solution to Corruption and Bribery: Building an Ethical Culture

Wherever we look in the world, be it the so-called developed countries or the emerging countries and regions, progress is stifled by corruption and bribery.

The search for solutions is limited by our default neurological decision-making process, which is logic-analytical. So we attempt to solve the problem with processes, structures and rules.

This is evident from various recent ‘thought leading’ pieces from the major consultancies and business schools.

A good example of this was a recent article in The Economist* about commercial bribery which suggested the following remedies:

  1. First, regulators should rein in the excesses of the compliance industry and take into account the cost to firms of sprawling investigations.
  2. Second, governments should lower costs by harmonising anti-bribery laws and improving co-ordination between national probes.
  3. Third, more cases should go to court. Too often, prosecutors strong-arm firms into agreeing to settlements.
  4. Lastly, anti-bribery laws should be amended to offer companies a ‘compliance defence.’

I responded with a letter to The Economist, which, to their credit, they printed:

‘The four reforms mentioned in your article “Daft on Graft” are laudable and would go some way to reducing corporate corruption. However, this still remains a compliance process which encourages management to tick the box while finding ways around the intent of the law or rule. Any change for the better has to start with the senior leadership team realising that being ethical is actually good for a sustainable business in the 21st century and to pro-actively demonstrate and encourage it. Creating trust with stakeholders, developing a safe environment, retaining the best people and creating a respected brand are just a few of the benefits. To do this leaders must really work on increasing their emotional awareness and behaviours and bringing their values to a higher level of consciousness in everything they do. These behaviours and consciousness can be learned but it requires leaders to be willing to work at actually rewiring their own neural connections (something we all do every day unconsciously is response to our experiences). Unfortunately, as Tolstoy said 'Everyone wants to change the world, but no-one wants to change themselves'. Let’s hope there are some exceptions.’

In our recent work with a number of organizations, senior leadership teams are realising that while compliance is necessary, it is not enough for a sustainable organization in the 21st Century. While older generations of employees (Baby Boomers and Gen X) always rated 'recognition from their manager' very highly, the younger Millennials are more interested in their bosses being 'ethical, fair, transparent and sharing information' according to a global study published by IBM in April 2015.* 

The only way we can address this for the long term is to build enduring cultures based on appropriate ethical behaviour. This may seem obvious but it is being addressed in too few organizations, partly because we are choosing the wrong leaders (see my previous article) and partly because the solution requires a material investment of time and money albeit with a good return on the investment and certainly far less than the fines many corporates are paying.

How we achieve this goes back to my letter to the Economist. It starts with the Senior Leadership Teams who really need to work on developing their behaviours, and especially empathy, to better engage with the people in the organization. Combine this with bringing those great values we use with our family and close friends to full consciousness. I am not just talking about those 'corporate sounding' values of integrity and courage but also forgiveness, compassion, patience and other softer values. I and many of my generation were taught to be different people in our work and private lives – but that is no longer right for today’s world.

As explained in Leadership Assessment for Talent Development, there is a REAL pragmatic journey senior leaders can take to so they are capable of running an organization in this way. The REAL Journey has three levels:

Start point: Rational, Ego-based, As-usual Leadership

Intermediate: Robust, Emotionally Aware Leadership

Advanced: Radical Ethically Authentic Leadership

At the moment this approach is seen as radical by many. But radical and fearless we need to be to change the world.

John Knights, Chairman of LeaderShape, an organization that focuses on the behavioural and ethical development of leadership, is an experienced international business leader who is passionate about developing leaders for the future. He is an expert in Emotional Intelligence and a thought leader in 'Transpersonal Leadership' and the relationship between neuroscience and leadership.

Leadership Assessment for Talent Development is available to order at a 25% discount when you enter the code LATDE25 at checkout on www.koganpage.com. This code is valid until the end of August 2015.

*'Daft on graft,' The Economist, May 9th 2015

* "Myths, exaggerations and uncomfortable truths: The Real Story behind Millennials in the Workplace.' IBM Institute for Business Value. ©2015 IBM Corporation

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