Speaker 1 0:00

This unit on ethical leadership, we're going to look at the qualities and behaviors
of good leaders. When we talk about ethical leadership, it doesn't necessarily mean
CEOs or managers or people at the top of an organization or in positions in
society. We all have an opportunity to be a leader, and so therefore all these
aspects can apply to you, and it's interesting to think about, how can you behave
like a good, ethical leader? So it's important to look at the context in terms of
being a leader and what's the environment. And I think it's good to reflect back
that actually, as humans, we are naturally inclined to trust and so that is the
basis of people's interaction with you, they are more likely to want to trust you.
And we kind of, when you think about children, we teach children not to trust it
has been our sort of base instinct is to trust someone. But the current context, in
terms of a business environment, is that actually distrust has started to spread.
And in the current business environment, there is a distrust of business sector,
and so it is a constant sort of piece of work that business leaders talk about is
the idea of, how do we win back trust? How do we build trust, knowing that certain
practices can erode trust and that it takes a group effort to try and bring it
back. We've moved from this idea of having a trusted base to the idea of actually
some people, and majority of people, feel like we can't actually have good
discussions, and there's this idea that they're not sure whether people are acting
in their own interests. So is the government working in your interests? Is business
working in your interest? There is an opportunity for business to step in as a
trusted role and a trusted player in our society, and particularly for you to be a
trusted individual. So when we look at the trust losses, they talk about
Australia's sort of trust bubble having burst, and that we've been on a trust
decline we saw during COVID, that actually trusting governments went up when we're
relying on them. Prior to that, we've relied on business to step in in relation to
climate. When we've felt, for example, that the government might not be taking as
much action as people want, they've actually trusted business to be involved in
social issues. And there is actually constantly, through surveys, we see that there
is an expectation that business business leaders and business people will be
involved and be a part of solving some of the social problems that we're dealing
with, and that all factors from government to politics to media to business to non
government organizations need to work together for the better of society in the
global context, if you think about where does Australia sit in terms of whether we
trust or don't trust our government, we are on the high end, but we actually, in
surveys, it's been shown that we have a higher trust in the public service,
necessarily, than the government of the day, but Australia is at the higher end.
And it's interesting when we look at sort of global treaties and agreements, to see
where different countries sit in terms of the level of trust, and how that can
change according to the different leaders that a country might have. And so the
Edelman Trust Barometer is one of the quite respected organizations that talks
about and tracks trust. And I think if you're thinking about being a trusted
person, it's interesting to look at the broader concept of is your sector trusted?
Is how does the country feel about their leadership? We've seen actually that the
trust in the banking sector has changed over recent decades, and it has actually
gone down from the time when we actually had a more physical relationship with the
bank in terms of going into a teller or having a bank manager that understood your
financial position, and as that relationship has become further apart, that trust
has become an issue. So we need to be aware of that, how important it is to make
relationships and have that idea of care at the center to build trust, especially
given the current context, we see often CEOs and leaders weighing in on social
issues. So for example, in Australia, we had a number of large organizations like
Telstra and Qantas come out in support of marriage equality. That's also the same.
People will take a position, for example, on indigenous issues, on the voice to
Parliament. And so these are interesting developments. Historically, people have
thought, do we is it the role of business to weigh in on social issues? And
historically, people have said, No, that's not the role of business. Business is
there to provide certain services and to make profits. And that has changed, and so
it's quite a challenge for some leaders, and not everyone is comfortable with this
development. There is some pushback. We should be aware of that. So for example,
BlackRock, which has been quite outspoken. And Larry Fink, the CEO of that
organization, he doesn't sort of an opening letter each year where he talks about
their aspirations around climate and their expectations of other people in the
finance sector, in that kind of finance and banking ecosystem. But there are some
attorney generals in the US that are actually saying that's not the role of
finance, and they are pushing back. The same with the NASDAQ, so that's where you
get listed in the stock exchange, in the US. They are currently being sued for the
idea that they have encouraged people to have certain gender diversity on their
board, for example, and certain quotas. So there is this pushback. And so it's
quite a challenge, actually, and we have to kind of navigate that. But they do say
that some researchers has found that even if a CEO weighs in on an issue of the
day, there might be a reaction, sometimes positive, sometimes it might be negative,
but they do actually say that it tends to bounce back to a generally favorable
position. So there is this kind of belief that actually, even if you're in your
professional life, you should be talking about and taking positions on the social
issues we look at really down to the key attributes of talked about the kind of
context in which our leaders and which Ethical Leadership sits, but really to look
at what the kind of attributes that you should try and bring out of yourself, and
that you should sort of start to be aware of in others, to identify ethical
leaders. And the Institute of business ethics in London, Philippa foster back has
done research about ethical leadership, and she's talked about these five qualities
of ethical leaders. So the first is openness. Often it's kind of you're
approachable and open to hearing other people's point of view and don't have a
closed mind and don't get defensive. The second is being fair minded, so not being
set going okay, what is fair? What is the right thing to do? The third is this idea
of honesty, which we've covered, making sure that your actions match your promises.
The fourth is this idea of courage, and sometimes they talk about moral courage, if
you see something's wrong, especially in a leadership position, do you speak up?
Because sometimes it might be challenging the status quo. Someone else might not
have said anything, and you decide to have the first person to go forward and say
something different, it can take courage to be a moral and an ethical leader. The
final quality which is really important is the ability to listen. Only by listening
to others can we develop and understand and often in terms of ethical decision
making, your understanding of variety of points of view, and trying to adjust a
decision to make sure that it has the best impact it can on a variety of people.
And so therefore, they often talk about engaging with stakeholders. What they mean
when they say engaging, or engagement in terms of ESG and the practice of
sustainability is actually the ability to listen to people.

Speaker 1 8:04
We need to be careful that we're not stuck in one point of view. And so a way that
they've started to make people think differently about your point of view is to
present this picture. And I saw an ethics professor teaching like this in the US,
and they present this picture, they say, This photo is real. It's not edited. The
stone is real, the trees are real, soil is real, and the sky is real. But why does
this picture not make sense? And then they turn it over and go, here it is. It just
was flipped the wrong way. And often, when we're looking at something or we're
involved in something, it can feel like it doesn't make sense. I can't possibly
understand why they would think that's right, or why they're doing it like that.
And what we do need to do is to go over to their point of view and explain that to
me, or should we look at this from another perspective? And then it becomes clear
and starts to make sense. So it's interesting to think of this. Is there something
that you're involved in that if you just took a different point of view, could it
become clearer, and could you get to a better position? I found another interesting
example of teaching business ethics and more ethical practices and solutions. Now,
this woman, here, she is at an airport, and she's wearing this suit, and she's
actually a designer, an architectural designer, that does airport layouts. And what
she's doing here she's putting herself in the shoes of someone who's older. She's
wearing a whole suit that is mimicking the experience of an elderly person at an
airport. So she's wearing goggles that impair her vision. She's wearing weights on
her arms that make her arms not as dexterous and not as easy to move things around.
She can't bend over as well because she has something impeding that around her
waist. And what they're trying to do is through her going around in that experience
of a more elderly person is how could they design that airport to better suit. To a
range of people, and I think it's an interesting idea and an interesting way to
think about it. So for example, you might be involved in getting new customers or
explaining products to a client. How can you look at that and think, how would that
feel if English was my second language, or if I had no financial knowledge, or if
I'd never taken a mortgage before, if I knew nothing about economics, would this
make sense to me? And if we're able to sort of put ourselves in someone else's
shoes, we can often design a better solution. Another ethical practice, and
particularly in relation to ethical leadership and good practices, is the idea of
anticipating and actually responding to unintended consequences. So every decision
is going to have a range of consequences. Some we can predict, and others we can't,
and sometimes the unintended ones can be negative. And so what we need to do is be
able to address those we talk about the decision making, the idea of reflection is
like looking and going, Oh, what do we need to change? An example they use is of
unintended consequences. Is the Streisand effect, and you may have heard about it.
It was when Barbara Streisand tried to have images withheld that showed where her
property was, and these images were going to be used in an environmental study and
just in one particular catalog that necessarily the public wouldn't have known
about, but she launched a legal action to have that photo suppressed. And what
happened then is it drew a lot of attention to this particular photo, and now you
can find it anywhere, and you can see her big house, which she obviously didn't
want everyone to see, and so they call that the Streisand effect, and it's
particularly important to think of in the context of finance, if you try to cover
something up, sometimes it can actually draw more attention to it. So you need to
be really careful not to fall into that trap. Another interesting example I saw
recently was in Texas, where they had a lot of road accidents on a particular
stretch of road, and they decided to put up a sign reminding people how many deaths
happen each year on on the roads. And what actually happened is having that sign up
increased the deaths because people got distracted trying to read the sign. So you
have this situation where that seems like the solution will fit, and it logically
feels like it should, but actually has an unintended consequence, which is why it's
so important that we reflect on our decisions and are able to admit mistakes, or,
you know, admit that we need to adjust something. We had a situation sort of
similar to this kind of example in Australia, where they decided to force
organizations to publish CEOs salaries, and the whole sort of rationale was that
they publish CEO salaries, then maybe the sort of multiplier between the lowest
paid and the highest pay wouldn't be so much, because the CEOs would be sort of
embarrassing. Gu, oh, I don't want to earn that much more. I look greedy. But
actually, what happened when they made disclosure of CEO salaries become
compulsory, it actually increased CEO salaries. Because what they did is they
started looking at other people's salaries and going, I should be paid more because
they're being paid that. And so what we had is what they thought was going to have
one outcome actually had another. So we need to be really careful of unintended
consequences and constantly work to kind of mitigate them and anticipate them and
then address them if they do become an issue. The final thing I want to talk about
in relation to being an ethical leader and to being to having ethical practices is
the apology, because we are going to get things wrong. Invariably in our work life,
we're not going to make perfect decisions that we feel good about every single
time, but being able to apologize and to publicly explain, or even just within a
team or within a workplace or to a client, be able to explain why you've done
something the way you are is very important. There are many examples that we can
see that where people have judged that an apology given by a leader hasn't been
adequate, and there are a lot of studies now about what makes for a good apology,
but often what they identify is being able to sympathize and acknowledge the impact
you've had on someone else, and also point to how things are going to be different
in the future, and taking responsibility and accountability. We're living in a time
where we need to be accountable for our decisions. So it's really important that we
think about what kind of footprint Do you leave as a leader, and do you feel good
about it and really think about what are those ethical practices that will make you
an ethical leader, regardless of your role in the finance or banking sector? I.

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