moral compass

Anyone who makes their living in compliance has seen that focusing entirely on the letter of the law will not successfully integrate regulatory compliance into their corporate DNA. There are always new regulations, and new interpretations, which further refine what compliance looks like.

So what should be the successful approach? I often state that regulations give us the opportunity and excuse to do the right thing. Developing our corporate moral compass will get us there.

Risk Center addresses this issue in a book review today. Whereas I don't agree with their broad assertions that moral leadership naturally leads to corporate success, such an ethical standing makes a lot of complex business decisions easier.

One example of moral leadership not automatically leading to success is Joe Clayton, who served for many years at the helm of Thomson in the US, building the RCA brand among others. He was a strong leader for the company, but when it came time to close plants in the US, that was something that he was unwilling to do. So he was replaced, and his replacement did what the organization required. I'm sure Joe would argue that his strong sense of doing the right thing caused his downfall at Thomson, but in reality, he was unwilling to adapt his moral compass to a new market reality. True leadership does not come from trying to control market forces and even your own employees, as that will only lead to failure. Rather than attempting to rigidly control our environment, how can we use it to serve our objectives?

True moral leadership is much more complex than this article describes. The reality of developing a moral compass goes far beyond the emotional intelligence factors mentioned here -- it requires developing order out of chaos, and finding clear solutions without limiting your viewpoint by seeing things in terms of black and white. However, I'm thrilled to see this level of discussion, particularly in the risk community, as it will focus attention away from the checklists which tell companies whether they are doing right and wrong, and towards sustainable growth. Now if the mainstream press can pick up on these concepts.....