Is Business Acumen an Ethical Issue? Jack Howe’s – Drum Beat News asks the question! Comments by Business Ethics Speaker Chuck Gallagher

Regularly I receive the Drum Beat News from Jack Howe and this week’s email report caught my attention.  I believe in servant leadership.  Quoted from the Greenleaf Center for Servant Leadership:

The servant-leader is servant first… It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possessions…The leader-first and the servant-first are two extreme types. Between them there are shadings and blends that are part of the infinite variety of human nature.

The difference manifests itself in the care taken by the servant-first to make sure that other people’s highest priority needs are being served. The best test, and difficult to administer, is: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants? And, what is the effect on the least privileged in society? Will they benefit or at least not be further deprived?

As I read that quote, it is striking that we would not likely find the number of ethical challenge that seem to be bubbling to the surface today if we had more of an attitude of Servant Leadership pervasive in our business operations today.  That said, Jack Howe brought that back to the surface with his comments below:

Is Business Acumen an Ethical Issue?

This week was transformational for me. I was able to spend three full days renewing my spirit and my intellect. For less than a legion of others, this week will have passed as unremarkable. The reason for my joy? The 21st Annual Greenleaf Foundation Convention, was held here in Dallas, Texas. But lest we forget that our mission in this section is business acumen and that our definition of business acumen is to understand in advance, how our decisions will impact all the stakeholders of our enterprise.

Who or what is the Greenleaf Foundation? Robert Greenleaf was a student of leadership and training who spent his career working in corporate America. In his seminal work The Servant as Leader he wrote:

The failure (or refusal) of a leader to foresee may be viewed as an ethical failure; because a serious ethical compromise today (when the usual judgment on ethical inadequacy is made) is sometimes the result of a failure to make the effort at an earlier date to foresee today’s events and take the right actions when there was freedom for initiative to act. The action which society labels ‘unethical’ in the present moment is often really one of no choice. By this standard, a lot of guilty people are walking around with an air of innocence that they would not have if society were able always to pin a label ‘unethical’ on the failure to foresee and the conscious failure to act constructively when there was freedom to act. How would your business acumen be judged if reviewed under this set of criteria?

It is easy to judge looking backward!  Ethics in application today are based on facts today.  Yet, there are actions that are taken today that are, in my opinion, unethical while being quite legal.  Let me share a simple example.  If a drug company manufactured and sold a drug to the public, and then bought put options betting on the drugs failure… that would likely represent an ethical issue.  Failure to tell the buyer of the drug that the pharma company expected it to fail and their stock to drop would be unconscionable.  Yet, that is exactly what happened at the beginning of the recession.  Wall street on one hand sold subprime loans to unsuspecting buyers with AAA ratings while at the same time effectively bet on their failure.

So…those leaders who had the presence of mind to foresee the lack of value of the securities being sold were, in my opinion, unethically acting as they tried to protect their companies from the risks associated with the sale of worthless paper.

Is Business Acumen an Ethical Issue?  WHAT DO YOU THINK?

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