What is going on in governance as very public failures in leadership continue? Perhaps there is no increase in failures but that failures are now more quickly exposed and poor behaviours and responses performed in public. When the light of failure is switched on, rather than buried and concealed from public sight in secure corporate castles and glossy annual reports, the acts of leaders are less likely to be hidden from view and the analogy is more ‘glass house’ than ‘castle’.

Whether laying off staff remotely or taking decisions based more on ego than evidence, leadership will be found out if they cut corners, don’t care about those they lead, and act as if they are more important than those who entrust their investments to them to be managed wisely.

The world continues to face increasing change, complexity and uncertainty, which are applying pressures to already high levels of societal and economic fears. Enter the factor of artificial intelligence, which of course is not new, but is developing at a pace many are struggling to keep up with and is for some, overwhelming. What might this mean for future leadership behaviours and performance?

Scenario analysis should embrace emerging risks which are characterised by a lack of verifiable information and knowledge needed for the decision-making related to them. Emerging risks are not only new risks but can include existing risks changed by the circumstances or conditions of an organisation and its context. Scenario analysis also helps test the efficiency of controls in place and identify gaps that might need to be addressed.

Organisations must conduct scenarios that focus on cultural and ethical fitness, what might emerge and what interventions are in place or needed to respond – before anything starts looming on the horizon. It’s all very well for an organisation to have a purpose statement but if this doesn’t translate into embedded practice and behaviours throughout an organisation, purpose becomes no more than a set of fancy words.

Principia has been appointed by the Confederation of British Industry to conduct a thorough review of the CBI’s culture. Principia is committed to building ethical organisations. They sound like a good fit for the CBI’s needs, but I’d argue that this type of advisory resource should be built into the business and crisis response plans of all organisations way before their help is called upon in real time. The knowledge and skills of organisations like this, especially from past lessons learned, is invaluable.

Managing crisis associated with a failure in culture and ethics and the impact this can have on the reputation of an organisation isn’t new – and collusion, cheating, abusive practices, breaches in safety, environmental damage, bullying, racist behaviour, and sexual misconduct – need I go on – is preventable. It is the job of leadership to step up as role models and to prevent individual acts of misconduct from getting out of control, throwing an organisation into the path of a loss of trust, damage to reputation, and ultimately in the most extreme cases, complete failure.

All is not doom and gloom. There is a massive opportunity for business leaders. The Edelman Trust Barometer reported this year that business is the only institution seen as competent and ethical. We live in hope that leaders will grasp this opportunity – it just makes good business sense.


Airmic's Annual Conference takes place 19-21 June at Manchester Central: https://conference.airmic.com/

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