“ The responsibility of leadership is not taken; it is given. Only when others choose to follow us can we truly lead.” Simon Sinek. Leadership is the most perceived position on the aspirational ladder of employees. However, mere leadership does not take you very far in an organization, but only responsible leadership will establish you in the company. Responsible leadership theory is well beyond merely achieving targets, productivity, and profit. In today’s world, leadership is often looked at as a role model by employees, customers, and other stakeholders. The world is becoming more aware of the environment and climate, and expects that business leaders give enough attention to these factors. Employees no longer want to be treated as servants, but they expect to be treated with fairness and empathy.
Responsible leadership is quite a new phenomenon, and it is not considered in conventional theories of leadership, which are oriented more towards business and profits. Maak & Pless have done substantial work on responsible leadership, and they have put forward the theory and rationale behind this. They elaborated on the question of How Does Responsible Leadership Differ from Related Theories?
Responsible leadership is required not just from business leaders but also from political leaders. The world is grappling with many global crises like pollution, environmental damage, climate change, poverty, and inequality. These problems cannot be tackled by political leaders alone, but they also require equal contributions from business leaders.
Responsible leaders are not born, but they are the result of the values and principles of the person.
Responsible leadership has certain qualities that are evident and which are inculcated into a person. A leader’s values and beliefs define him as an ethical or responsible leader. Some of the personal traits of a responsible leader are given below
- Leaders value authenticity, and they act with integrity
- These leaders are committed to maintaining fairness in the organization.
- They built an environment that is based on trust and open communication.
- These leaders believe in equal opportunity and treat every individual with humanity.
- These leaders value the culture beliefs and diversity.
These qualities will always stem from the leader’s own set of values and principles. Responsible leadership becomes very critical in international operations since leaders must deal with different cultures and values in different geographies. These leaders will always keep the interests of society, customers, and employees before the profitability of the company. In today’s business environment, leaders and companies are not only recognized by the amount of profit they make but also by their behaviour towards social and environmental factors. In other words, higher profits do not mean that a company is most respectable, but today it is measured based on its conduct on various factors, like
- Responsibility towards shareholders in terms of consistency and clean operations
- Responsibility towards employees in the form of a better working environment, open communication channels, fair treatment, empathy, and humanity.
- Responsibility towards customers in the form of trust and maintaining the quality of the product.
- Responsibility towards society in the form of non-destruction of the environment, contribution towards factors like education, housing, poverty, etc.
Responsible leadership will have to ensure that all the above aspects are taken care of while conducting the business. In many countries, corporate social responsibility (CSR) is made mandatory because many businesses ignore this aspect. Businesses are expected to contribute to society in various forms. Leadership must ensure that this aspect of CSR is done with utmost sincerity. In countries like India, corporate social responsibility has been made mandatory for large companies making profits.
Glaring examples of responsible and irresponsible leadership in corporate history.
Irresponsible leadership
Bhopal Gas Tragedy in India
Union Carbide had set up a chemical plant in India. This plant emitted poisonous gas in the year 1984, and as a result, thousands of people died, and many became blind. Warren Anderson, who was the chairman of the company, never came to India to testify, and the company simply contributed $ 470 million to the government of India as compensation. This was insufficient considering that more than 15000 people lost their lives and close to 500,000 people suffered respiratory problems for life.
Oil spill by British Petroleum in the Gulf of Mexico.
In the year 2010, approximately 92 million tonnes of oil were spilt in the Gulf of Mexico, which damaged the environment to an unimaginable magnitude. However, the then CEO of BP, Tony Hayward, underplayed the whole incident and was widely criticised by the world.
Responsible leadership
Paul Polman, Chief Executive, Unilever
Paul Polman, as CEO, is a staunch advocate for sustainable business practices, Polman has tirelessly led the campaign that “business should serve society” by growing both the business and the communities they impact. He is actively lobbying other global leaders to contribute to eradicating poverty, tackling climate change, and building partnerships
Ratan Tata, Chairman Emeritus, Tata Sons, India
Ratan Tata is a glaring example of responsible leadership, which is demonstrated through two incidents. He launched the Tata Nano car, keeping in mind the common man in India and his income level. He was widely criticised and took great risks in launching the car against all odds. In the second case, he was also chairman of Taj Hotels Mumbai, which was a target of a terrorist attack in 2008. Many of the employees of the Taj hotel, including the entire family of the General Manager, died in the attack, saving the guests. Mr Tata met with every deceased family and offered to take care of the education of their children throughout their lives. He also offered jobs to all immediately eligible people from the deceased’s family.
If we look at these examples closely, we realize that these leaders had certain qualities and values because of which they behaved in a certain way.
Characteristics of a responsible leader.
Responsible leaders certainly show values and characteristics that make them responsible leaders. Some of the important behavioural examples are
- They lead from the front during crises and give away the credit to the team in the event of success.
- They create trust among the stakeholders of the business, i.e., employees, customers, suppliers, shareholders, financiers, etc.
- They exemplify integrity in their behaviour.
- Responsible leaders will sacrifice the business benefit if it is harming society.
- They believe in the inclusion theory and would encourage employees to express their opinions and would listen to them.
- These leaders would create innovations and bring in new technology only if it does not harm society.
- They will lead not by force but by creating followers who believe in leaders for their qualities, knowledge, and values.
- These leaders will have to be visionary, who would create a purpose and thereby strive to create a sustainable business.
Responsible leadership is closely associated with a leadership behaviour pattern called Avoid Harm, Be Good.
Why is there a scarcity of responsible leaders?
There is always a dilemma between opportunities to earn higher profit against giving up the opportunity for the sake of an environmental or social cause. The aspiration for achieving higher results and cutthroat competition in the business world drives business leaders away from their values, and they are more often sacrificed. Most of the business leaders are focused on servicing shareholders and investors. Business valuation and profits drive the decisions of these leaders.
Issues like the environment, social causes, etc., etc remain only on the election agenda, and these issues are never chased post-elections. These issues never show immediate results, and there is always uncertainty about the outcome. However, many business leaders have taken measures to become more environmentally friendly, and some of the examples are a ban on plastic, the adoption of renewable energy, afforestation, green buildings, etc.
Conclusion
Responsible leadership plays an important role in shaping society and creating an environment in the organization that is based on trust, equal opportunities, and inclusive diversity. Responsible leadership needs to be inculcated in the business leaders as a conscious effort.
