Teams commit when they know their leaders value transparency over expediency. In short, ethics pays off.
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When we were selected as the first batch of William G. McGowan Fellows, neither of us fully understood the path ahead. At the time, we thought we had indeed won a scholarship. What we got in return was a lifelong reminder that leadership is not just about results. It’s about values.
The McGowan Fellows Program is unique in that it does not simply recognize academic excellence. Each colleague is required to confront how decisions are made in business, especially in the gray areas where “legal” and “ethical” do not align.
But for us, it was an early nudge to ask, “Are you comfortable standing up in front of your colleagues and defending this choice?” If the answer was no, I knew I had to take a different path.
Ethical business leaders are needed now more than ever
This kind of grounding feels more urgent than ever. According to the recent State of Moral Leadership in Business report, 95% of employees believe moral leadership is more important than ever, but respondents said only 9% of CEOs and 11% of managers consistently adhere to the highest moral standards.
The result is a growing crisis of trust.
Gallup also reports that only 21% of employees are engaged at work, with the main reason being a lack of engaged managers to supervise employees.
And customers are voting with their wallets, too. The latest Edelman Trust Barometer shows that 63% of global consumers buy from or support brands based on their beliefs and values.
For business education, our future leadership pipeline, now is the time to close the values-based leadership gap.
In our experience, ethics and values-based leadership is often a single elective course in college. With the increasing demand for principled decision-making, MBA programs have a great opportunity to advance the integration of ethics into their curriculum and weave it into their culture.
When we first convened as McGowan Fellows, we were not given a blueprint. The challenge for us is to decide how we can make an impact. Our group has developed an ethical leadership curriculum.
Ethical leadership should be seen as a cost
Today, the experiential learning we shared and the values embedded in our curriculum brought us together as business partners. And that work, born from the first McGowan cohort of 10 students across the country, continues to influence young leaders today. This proves that values-based education leads to tangible results, not just lip service.
However, this work cannot be left in a corner. If today’s organizations want resilient and innovative leaders, they must invest in embedding ethics at the heart of their training and coaching.
Consider the cost of inaction. Corporate scandals can destroy billions of dollars in market value, and reputational damage is nearly impossible to recover. Warren Buffett famously said, “It takes 20 years to build a reputation, but five minutes to ruin it.”
Our career since McGowan has only reinforced this lesson. Ethical leadership is not a cost. That’s a long-term benefit.
In a highly competitive and trust-based industry, stakeholders are mindful of integrity. This is one reason the McGowan Foundation established the Ethical Leader of the Year Award, which is given annually to one leader from a Fortune 500 company. Honorees are those who exemplify courage and accountability, principles that are directly related to revenue growth.
Teams commit when they know their leaders value transparency over expediency. In short, ethics pays off.
The call to action is clear. Business schools are well-positioned to meet that call and elevate ethical leadership from an elective to a required subject, from a single course to a defining philosophy.
Business ethics is a “bottom line” issue
Employers need to recognize that developing moral leaders is not a luxury, but a strategic imperative.
And like us, our graduates must lead by example that ethical decision-making is not only possible in business, but that it is powerful and profitable.
A few decades ago, very few MBA programs offered entrepreneurship. Today, everything is that way because the market demanded it.
What is needed now is a leader with an internal compass strong enough to guide the company through complexity and crisis. Higher education institutions and businesses can provide important solutions to bridge the gap between employee trust and public trust.
We believe the McGowan Fellows Model provides a path forward in developing experiential, values-based, and responsible leadership.
There is no shortage of intelligence or ambition in the business world. What we need now more than ever, and what the next generation has to offer, is courage rooted in ethics.
Gordon McLaughlin is an experienced investor and executive with 20 years’ experience spanning a wide range of operating businesses and real estate assets. He is a co-founder of Element8 Partners. Frank Sasso is the co-founder of Element8 Partners, a value-driven real estate investment firm with offices in New York, Columbus, Ohio, and Charlotte, North Carolina.
