Importance of the interrelationship between governance, leadership and ethics – Part III
THIS IS THE THIRD and final part of the article that supports the proposition that governance, leadership and ethics are interrelated and part of a whole that delivers the optimum results . We look at how the link between governance, leadership and ethics works to the advantage of all institutions, whether private enterprise or state structures.
Corporate governance has much in common with governance in government. The Organisation for Economic Cooperation and Development’s Principles of Corporate Governance and the Institute of Directors of Southern Africa’s King II Report both go beyond the financial and regulatory aspects of corporate governance and advocate an integrated approach to good governance in the interests of a wide range of stakeholders. They argue that having regard for the fundamental principles of good and sustainable financial, social, ethical and environmental practice and leadership is core. In adopting a participative corporate governance system of enterprise with integrity, the King Committee in March 2002 successfully formalised the need for companies to recognise that they no longer act independently from their societies and the environment/s in which they operate.
To be relevant and sustainable, an organisation should achieve a competitive advantage. The foundation of sustainable competitive advantage is realised through the continuous achievement of advanced efficiency, innovation, quality, superior human resources and responsiveness to customers. This is as relevant in public organisations as it is in non-profit and propriety organisations. Government must meet the demands of its citizens by being responsive to their needs by way of the delivery of quality services at minimal expenditure, and by doing so innovatively.
Effective leadership is in high demand. In particular, there is a call from the public and private sectors as well as from civil society, for strong, effective and ethical leadership that can produce the required resultsii. President Obama supports this notion by saying to those “… (leaders) around the globe who seek to sow conflict or blame their society's ills on the West (others), know that your people will judge you on what you can build (results), not what you destroy”.
The leaders of the future will be those who create a culture or value-system centered upon principles such as those outlined in good governance frameworks. Creating such a culture in a business, government, school, hospital, nonprofit organisation, family or other organisation, will be the tremendous and exciting challenge of this century. According to Stephen Covey, this will be achieved only by leaders, emerging or seasoned, who have the vision, courage and humility to constantly learn and grow.
In summary, good governance is achieved through the interrelationship with effectiveethical leadership. Governance cannot attain its promised results if it is not supported in an interactive relationship with effective-ethical leadership. This approach forms the basis of the new module Leadership, Governance and Ethics (LGE) in the MBA programme at Milpark Business School. Botha, H.J. 2006. ‘ The interrelationship between governance and leadership: a theoretical study’, Dynamicus Journal for Private Higher Education, 1(1). Northouse, P.G. 2004. Leadership: theory and practice. 3rd Edition. California: Sage Publications.
Dr Hendrik Botha Faculty of Management and Leadership,
Milpark Business School