The vast majority of U.S. employees want greater moral leadership from their managers and CEOs—but that demand outpaces supply. A new study from The HOW Institute for Society reveals that 88 percent of employees believe the need for moral leadership is more urgent now than ever, yet only 16 percent of managers and a mere 12 percent of CEOs consistently demonstrate behaviors associated with moral leadership.
This gap has consequences. Moral leadership—or the lack of it—impacts everything, from the levels of trust within teams, to employee loyalty, to the bottom line, asserts the firm’s new 2022 State of Moral Leadership in Business report.
“The HOW Institute for Society is committed to developing new metrics that measure the HOW—and not just the ‘how much’—of leadership, decision-making, and behavior,” said Dov Seidman, founder and chairman of The HOW Institute for Society, in a news release. “It is our sincere hope that this report will encourage leaders to take the deliberate and necessary steps to build their own moral authority and scale moral leadership across their organizations. Moral leadership is a precious resource, but it need not be a scarce one.”
The report represents an ongoing effort by The HOW Institute to study the presence of moral leadership and how it inspires elevated behavior in people, shapes values-based organizational cultures, strengthens performance, and leads to deeper relationships with communities and society.
Among other findings, the study shows that:
Moral leaders inspire teams animated by high ethical standards, respect, learning, and trust
Employees with managers ranked as top-tier compared to bottom-tier moral leaders are 8X more likely to strongly agree that their team takes full responsibility for their actions; 8X more likely to strongly agree that people on their team treat each other with respect, even in conflict or disagreement; and 9X more likely to strongly agree that there are high levels of trust on their teams.
Moral leadership inspires exceptional organizational performance
Employees who ranked their most senior leader in the top-tier compared to bottom-tier for moral leadership are 5X more likely to strongly agree that their organization has satisfied customers; 6X more likely to strongly agree that their organization is poised to improve its business results in the next year; and 8X more likely to strongly agree that the organization adapts quickly to change.
Moral leadership inspires employee loyalty
Virtually all (98 percent) employees would recommend their organizations as good places to work when their most senior leader is ranked as a top-tier moral leader: 90 percent of employees who have seen their manager apologize would recommend their organization, compared to just 65 percent for those who have not.
CEO activism does not equal moral leadership
Only 51 percent of employees report they are aware of their most senior leader taking a public stand on a political or social issue on behalf of the organization. Further, of those 51 percent, only 41 percent strongly agree that when leaders are communicating their organization’s stance and actions on political or social issues, the actions refer to their organization’s values as part of the rationale. Only 43 percent strongly agree their leadership create opportunities for thoughtful dialogue among and between colleagues on social and political issues.
Employees who do strongly agree that their most senior leader creates opportunities for thoughtful dialogue among and between colleagues are 3X more likely to strongly agree that their organization adapts quickly to change.
Implications for leaders include:
- Leaders have an obligation to strengthen their moral leadership, inspire it in others, and scale it in their organizations.
- Moral leadership is something that can be learned and invested in by organizations.
- Leaders need frameworks for when and how to engage on social issues.
- Strong team cultures are animated by deliberate pauses of reflection.
“We believe at The HOW Institute that the single greatest leadership challenge of the 21st century is to nurture and develop moral leaders who lead with moral authority and ensure that these, and only these leaders, occupy positions of formal authority at every level, sector, and dimension of society,” Seidman said.
Defining moral leadership
As defined in the study, moral leadership goes beyond the narrow focus on ethics and compliance. It is a constellation of behaviors that relate to putting principles and values before self-interest, extending trust to colleagues rather than micromanaging them, listening and learning from perspectives that challenge one’s views and assumptions, and more.
When asked to give an example of this kind of leadership at their organization, one public-sector employee said, “Because of the recession we’re currently experiencing, hours have been cut and we’re all suffering financially. My manager has assisted with that burden proactively by helping us find other positions in and around our hospital. We’re all experiencing strain during these dark times, and his actions as a moral leader help elevate the culture of our organization.”
To determine the presence of moral leadership among respondents’ managers and leadership, the researchers applied a tiered framework. Depending on respondents’ reporting on a variety of behaviors associated with moral leadership, they assigned managers and executives to one of five tiers. For simplicity, they used the term CEO loosely in this report to mean an organization’s most senior leader regardless of industry and the actual survey questions were more agnostic to the specific name of this leader.