The Wisdom of Chartered Directors: 
Ethical Leadership in the Boardroom

Writer: Sorayuth Vathanavisuth, Ph.D.

Imagine if you were a Director of the Board, what should be the proper practice you should adopt as your own directorship’s guideline? There will be numbers of answers for which may be appropriate to specific conditions of particular Board members. In order to sustain organizational performance under high uncertainty and dynamic world, with my humble opinion, I cannot think of any right approach to be more suitable than the Ethical Leadership.

As the name implies, Ethical Leadership is the leadership concept which is solidly refers to ethics, honesty and integrity. In other words, Ethical Leadership is the way that supports Board member to think and behave in the right way which can be benefit to organization and society. Some may think it sounds larger than life duty on Directors since, generally speaking, Directors do not run the corporation by themselves. They support management to properly manage the firm. Due to the fact that Directors are all at the top of the tree, they can certainly be true leaders in this important mission of managing corporation, if only they consider to behave according to following suggestions.

Adhere to personal code of conducts

Although Directors are appointed by shareholders usually during AGM (Annual general meeting), some directors might lose sight of why they were chosen. They may forget that Directorship is the role which comes with great responsibility and accountability. It is not the position that one can take advantage for personal benefit.

According to Giordano Bruno, the 16th century Italian philosopher, “If the first button of one's coat is wrongly buttoned, all the rest will be crooked”. If the Directors do not have the above mindset, they probably find difficulty more than they expect along the way. Therefore, Directors must stand firm on their own personal code of conducts which can truly guide them to effectively separate the sheep from the goats.

Respect the well-established norm and principles

In any organization, there are always established norms and principles which people already comfortably perceive and accept. These practices, both written and unwritten, are part of people’s daily life in the work place. They should not be easily changed unless there is good reason to do so such as major transformation of numbers of firm during 1997 and 2008 financial crisis. It does not mean they cannot be changed but it needs careful and thorough thought to do so. Directors must be aware of complexity of the issue. Hence, it is not only they should not start prematurely but also raise the concern if there is an initiative on this matter.

Enhancement of corporate values and cultures

"Culture eats strategy for breakfast", Peter Drucker once said. Cultures and corporate values are critically important to organization and truly require special attention from the Board. They usually comprise of words and conceptual belief regarding good things and practice member of organization should hold tightly and behave accordingly.

In other words, they are about the same things Ethical leader should believe and perform. Because of the fact, Board member must find a proper way to enhance and promote corporate values and cultures whenever they can.

Effective communication with regular meeting

Since Directors do not manage organization by themselves, communication is considered a crucial managerial tool for them. In order to express their views with CEO and executives productively, Directors should have a regular and scheduled meeting.

Discipline of the meeting is also important. Directors should send the right signal of their ethical behavior by holding meeting on time and finishing at pre-agreed time as well. They should talk turkey and be in the meeting for the whole session without being out from the room because of special phone call or any issue that hinders their attention.

When Board members participate in this way, it is not only they act as a role model for executives and involved person but also, when the time comes, be able to produce quality decision as well.

Recognition of former contributor

One of famous books by Marshall Goldsmith, What Got You Here Won't Get You There, tells us how successful people may not succeed again because they may be trapped with the past successful way of achievement. It is sad but true that people may forget former achievers if they are no longer on the scene.

Director should encourage and support a suitable platform to express respect and recognition to firm’s former heroes, who contributed and helped organization to grow, to be the role models for the present employees.

Promoting Knowledge dissemination   

Properly managing knowledge in the organization is one of the issues Board members should take a closer look. If we refer to notable quote from Sir Francis Bacon, the 16^th century English philosopher, that "Knowledge itself is power", we will have no doubt that Directors should dedicate time for this matter as well.

Besides internal knowledgeable resource, Board member, as an Ethical leader, should help and find outside knowledgeable person to help the firm in proper way. Since Directors usually have broad contact with outside knowledgeable person. They can be very helpful to the firm in this aspect.

The above 6-point approach can be a foundation to any Director who want to perform as an Ethical leader.

One can observe that the hard issues are not included in the above suggestions since it is considered as a mandatory qualification of Board member at the first place. Hence, Directors can fulfill these soft issues under the practice of Ethical leadership concept.

Disclaimer: This article is written for educational purpose only.

Sorayuth Vathanavisuth, Ph.D. a DCP 3 & CDC10 - Graduate Member and former facilitator of DCP’s Strategic HR section. He can be reached at sorayuth@sealeadership.com.