Moral leadership is now a critical survival skill for business leaders at a time of increasing complexity in the workplace, a new report has revealed.
The study from The HOW Institute for Society found that 93% of employees believe the need for moral leadership is more urgent than ever. Yet only 10% of CEOs and 13% of managers consistently demonstrate behaviors associated with moral leadership.
Moral leadership – or the lack of it – impacts everything, from the levels of trust within teams, to employee loyalty, to the bottom line, noted the study. Key findings show that:
- 71% agree that tackling the crises we currently face as a society requires strong moral leadership
- 62% agree that businesses have a central role to play in exhibiting and promoting moral leadership to the rest of society
- 50% agree that if company leaders demonstrated moral leadership, most labor unions would not need to go on strike
- 59% believe that today’s leaders are somewhat or very unprepared to grapple with ethical implications of generative AI.
MORAL LEADERSHIP: A PRECIOUS RESOURCE
“What we found is that in this extraordinary moment where we, collectively, are facing so many simultaneous crises, moral leadership has evolved from a worthy pursuit to a critical survival skill. Our research shows that people are seeking leadership that works to forge shared truths and engender an abundance of trust, and that scales deep, human moral values at all levels,” stated Dov Seidman, Founder and Chairman of The HOW Institute for Society. “We also found that when leaders and managers exemplify this type of leadership, they are more effective with their teams and achieve higher levels of business performance. Moral leadership is a precious resource, but it need not be a scarce one.”
Moral leadership positively impacts business performance, noted the study. Organisations with CEOs exemplifying moral leadership are far more likely to have satisfied customers, be positioned to improve results in the next year, and adapt quickly to internal and external change, according to the report. In fact, 79% of those in organisations with CEOs in the top tier of moral leadership say their organization has satisfied customers and 75% report their organisation is positioned to improve its business results in the next year, compared to 12% and 8% with CEOs in the bottom tier of moral leadership, respectively.
MORAL LEADERSHIP IMPROVES EMPLOYEE RETENTION
Moral leadership also improves employee retention and reduces the likelihood of turnover. Only 11% of those reporting to leaders ranking high on the moral leadership scale are looking for a new job, compared to 29% of those reporting to bottom-tier managers.
Moral leaders build trust and catalyse effective teams, according to the study. Teams working with moral leaders are 15 times more likely to have trust and respect among team members, and 20 times more likely to be more innovative and experimental with their work. Moral leaders also help coworkers when conflicts arise. In fact, 78% of people with managers who rank high on the moral leadership scale say people on their team treat each other with respect, even in conflict or disagreement, compared to 5% with managers who don’t exemplify moral leadership.
Moral leaders take accountability for themselves and their teams and find authentic means to make amends when mistakes occur. The propensity to apologize is significantly higher among moral leaders. In fact, 85% of those working with top-tier moral leaders report witnessing their managers apologise. Moral leaders foster environments of accountability. High-performing employees are more likely to get away with being disrespectful or abusive to others in organizations without moral leaders.
MORAL LEADERS ARE MORE ACCOUNTABLE
Moral leadership leads to more effective return to the office strategies. The majority of those employees who have returned to the office, in person, have had a positive experience, including attentiveness from managers to their personal situation and preferences, thoughtful organizational leadership that appeals to values rather than rules in explaining the return, and clear communication on the reason for the return. Yet only about one-third agree or strongly agree that their organisations have sufficiently involved employees in these decisions.
Employees are also concerned about the implications of artificial intelligence in decision making. In fact, 29% of respondents say their organizations are integrating AI tools into everyday operations. Yet 71% indicate they are somewhat concerned and 39% say they are very or extremely concerned about AI making morally-questionable decisions.
MORAL LEADERSHIP CULTURE
Leaders also benefit from building cultures of moral leadership in their organisations. The study found that 87% of employees believe moral leadership can be learned and taught. Employees working in organisations that invest in professional development in principled decision-making are more likely to recommend their organization as a good place to work.
The 2024 State of Moral Leadership in Business report is the third in an ongoing series of reports that study the presence of moral leadership and how, when it is present, it inspires elevated behavior in people, shapes values-based organisational cultures, strengthens performance, and leads to deeper relationships with communities and society
Click here to download the report.
Empathetic leadership boosts morale and is essential to fostering an inclusive work environment, a new study has confirmed.
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