Download Ethical Leadership and the Constitution

REPUBLIC OF KENYA
EXECUTIVE OFFICE OF THE PRESIDENT
THE ROLE OF STATE CORPORATIONS’
BOARDS IN PROMOTING ETHICAL
LEADERSHIP
State Corporation Boards Induction: Mombasa Continental Resort, 28th September – 5th December, 2015
Ethical Leadership and the Constitution
Mwongozo is anchored on The Constitution of Kenya 2010:
Article 10 – National values and principles of governance
Chapter 6, Article 73 – Emphasis on public trust, honor and
dignity of public offices
Article 232 – Reinforces personal Integrity, values and principles
of public service., which also provides for efficiency,
effectiveness and economic use of resource
BACKGROUND
.
Ethics- the moral principles that govern a person’s or group’s
behaviour
Ethics is the foundation of good governance.
Ethical leadership is the willingness to accept responsibility and
involves acting and leading ethically
Ethical leadership requires a clear and coherent ethical framework
for decision making.
Mwongozo Chapter 4: Ethical leadership
and Corporate Citizenship
Governance Statement
The operations of the organization should
be guided by ethical practices that seek to
promote good corporate citizenship.
Governance Principle
The organization should commit to
operate ethically and promote corporate
social responsibility and investments.
4.1 ETHICS AND INTEGRITY
Integrity is defined as….“adherence to moral and ethical
principles
The board should:
 Provide ethical leadership in the management of the
organization.
 Establish the core values of the organization and ensure that
the values are aligned to the constitution of Kenya and
underpin sustainable practices.
 Ensure that all members of the organization adhere to the
core values.
 Ensure that the corporate strategy includes measurable
targets for improving ethical behavior.
 Ensure that the ethical practices of the organization are
effectively monitored.
.
4.2 Code of Conduct and Ethics
A set of principles designed to help organizations conduct
business honestly and with integrity.
The board should:
 Ensure that a code of conduct and ethics is developed.
 Ensure that all members of the organization subscribe
to the code of conduct and ethics.
 Review the code of conduct and ethics as necessary.
 Promote ethical conduct and sanction misconduct.
 Ensure that a corporate gifts policy is in place.
 Receive from the committee responsible for governance
and compliance, a report on the level of adherence to
the code of conduct and ethics by members of the
organization.
.
4.3 Conflict of Interest
A situation that has the potential to undermine the impartiality of a person
because of the possibility of a clash between the person's self-interest and
public interest.
The board should:
 Ensure that a policy on management of conflict of interest is place.
Board members shall:
 Declare any real or perceived conflict of interest with the
organization upon appointment to the board
 Declare to the board any real or perceived conflict of interest that
may subsequently arise
 Not take part in any discussions or decision-making regarding any
subject or transaction in which they have conflict of interest
 Not influence in any manner whatsoever decision-making on any
matter in which they have interest.
.
4.4 Corporate Reputation and Image
Reputations are overall assessments
of organizations by their stakeholders.
The board should:
Ensure that the organization
develops a strategy on corporate
reputation and image.
Promote a positive image of the
organization.
4.5 Corporate Social Responsibility and
Investment
CSR," is a corporation's initiatives to assess and
take responsibility for the company's effects on
environmental and social wellbeing
The board should ensure:
That a policy on good corporate citizenship is in place
That the policy on good corporate citizenship is
implemented
That a sustainable and appropriate budget is allocated
for corporate social responsibility and investment
That the organization respects and promotes
sustainable environment
.
4.6 Whistle-Blowing
Whistle blowing reveals wrongdoing within
an organization to the public or to those in
positions of authority.
The board should ensure that:
There is a whistle-blowing policy in the
organization
The whistle-blowing policy protects and
prohibits victimization of those who disclose or
provide information in good faith
An independent party is responsible for
receiving and investigating reports received
Importance of ethics in the Public Sector
 Ethical behavior leads to trust and a sound
enduring reputation for an organization
Improves transparency and accountability in
the state corporations
Leads to prudent utilization of public resources
Reduces corruption due to improved moral
standards
Importance of ethics in the Public Sector
Leads to competitive advantage
Leads to improved performance and revenues
Attracts investors and enhances investor confidence
Improves legal and regulatory compliance
Ethical leaders build a Legacy
Challenges to Ethical Leadership
Challenges are situations which hinder the fulfillment of ethical
requirements.
 Self-Interest
 Combination of commercial pressure and inherent greed.
 Advocacy
 Temptation to support an opinion purely to advocate a
position that is not supported with relevant evidence or
degree of objectivity
 Familiarity
 Nature of relationship with a party becomes too sympathetic
that it compromises the objective requirement of the code
Challenges to Ethical leadership
Intimidation
 Where there exists directly or
indirectly material or psycho-social
threats that prevent one from working
objectively
Futility of determinism
 Resignation to the status quo: We have
trouble fighting own natural
inclination so why bother
Role of Leadership In Ethical Culture
The role of leadership is critical in creating and upholding
ethical culture through:
 Rewarding and celebrating ethical conduct
 Demonstrate unequivocal importance of ethics from the
top (CEO-Chief Ethics Officer!)
 Making ethics essential for career advancement
 Publicly reward ethical behavior and punish lapses
Food for thought:
Singapore 1963
Singapore today
Thank You