Why Leaders Need To Care About Trust and Ethics

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My intention with each of these posts is that you’re challenged to interrupt the noise and routine in your life, just for a moment, to think more deeply about what really matters in life… your relationship with yourself and with others in your professional and personal life.

None of us are perfect. We all make mistakes.

However, when someone is ‘caught out’ for an intentional deception, that is not a mistake … it was intentional.

For example, in 2013, after Lance Armstrong publicly admitted to using banned performance-enhancing drugs during his seven wins of the Tour de France, in an interview with Oprah Winfrey, he said:

“I made those decisions; they were my mistake and I’m here to say sorry”.1

Mistake or Intentional Deception

For his ‘mistake’, Armstrong was stripped of his titles and medals.

Saying “sorry” in hindsight when you have made a genuine and unintentional mistake can be a courageous action.

There is quite a difference however, if you’re saying “sorry” in hindsight for an intentional deception simply because you have been ‘caught out’.

As a professional conference speaker and corporate educator for almost three decades now, I have been and will continue to constantly challenge this type of statement:

“Trust and ethics just aren’t important topics that conference organisers, corporate leaders or their teams want to hear.”

That statement, or variations of it, is usually followed with a list of ‘hot conference topics’ that currently include: Leading Remote or Hybrid Teams, Managing Disruption, Resilience and Reinvention, Digital Transformation and Data Optimisation, and the evergreen topics of Motivation, Sales, and Customer Experience.

Sure … all of these ‘hot topics’ are important, but consider this summarising statement on the 2021 Edelman Trust Barometer:2

“After a year of unprecedented disaster and turbulence – the Covid-19 pandemic and economic crisis, the global outcry over systemic racism and political instability – the 2021 Edelman Trust Barometer reveals an epidemic of misinformation and widespread mistrust of societal institutions and leaders around the world. Adding to this is a failing trust ecosystem unable to confront the rampant infodemic, leaving the four institutions – business, government, NGOs and media – in an environment of information bankruptcy and a mandate to rebuild trust and chart a new path forward.”

Companies Behaving Badly

Surely it is only a rare occasion that a ‘trusted’ company would be ‘caught out’ for an unethical and intentionally deceptive action. Not so, according to Australian Competition and Consumer Commission (ACCC) Chair Rod Sims.

In a July 2018 lecture at the University of Tasmania titled ‘Companies Behaving Badly’, Sims listed a number of “well known and respected major Australian companies who have admitted, or been found, to have breached our competition and consumer laws”.3

Included in Sims’ list of companies behaving badly were:

Ford admitting to engaging in unconscionable conduct in the way they treated customer complaints about their cars shuddering with PowerShift transmission. Ford were ordered to pay $10 million in penalties.

Telstra’s third-party billing service exposing mobile phone customers to unauthorised charges. Telstra was also ordered to pay $10 million in penalties.

Thermomix making false or misleading representations to some customers over a safety issue by remaining silent when knowing about the fault. Thermomix was ordered to pay over $4.5 million in penalties.

Flight Centre attempting to induce three international airlines to enter into price-fixing agreements. Flight Centre was ordered to pay $12.5 million in damages.

But Wait … There’s More!

It is worth also noting that these examples of companies being caught out behaving badly were from just one month, April 2018.

The list, as Sims put it, was unfortunately “just the tip of the iceberg”.

He went on in his speech to identify big name companies such as:

Heinz for misleading consumers regarding a product they claimed was good for children, when two-thirds of the ingredients was sugar.

Reckitt Benckiser for misleading consumers (and charging higher prices) by marketing four different versions of their Nurofen product to treat different types of pain, when each product contained the same active ingredient.

Sims also ‘called out’ Meriton, Optus, Pental, Kimberly-Clark, Coles, Bet365, and Acquire Learning and Careers for breaches of trust, misleading claims, or unconscionable conduct.

I know you will recognise many of these large organisations, and you would be right to be shaking your head in disbelief.

If you were to read any of the annual reports of these companies you would find, somewhere near their vision and values statements, an item regarding how much they value their customers.

Indeed, that was Sims’ observation as well, when he said:

“These same companies regularly proclaim they put their customers first”.

For companies behaving badly, being caught out – and apologising in hindsight – is a costly matter, and not just from a financial perspective.

Today’s leaders need to be intentionally proactive in applying ethical and trust-based planning techniques and strategies to ensure better decision making that considers the impact of any planned action on all stakeholders.

Until this is done, we will continue reading headlines like ‘Companies Behaving Badly’ and shaking our heads at the unethical, trust-breaching, and intentionally deceptive tactics in the pursuit of short term profits and empire building.

  1. Clark, L. (2013). ‘Lance Armstrong admits doping in Oprah Winfrey interview, AP reports’. The Washington Post, 14 January. https://www.washingtonpost.com/sports/lance-armstrong-admits-doping-in-oprah-winfrey-interview-ap-reports/2013/01/14/a635a424-5eaf-11e2-9940-6fc488f3fecd_story.html
  2. https://www.edelman.com/trust/2021-trust-barometer
  3. Sims, R. (Chair ACCC) (2018). Giblin Lecture. ‘Companies behaving badly?’, 13 July. https://www.accc.gov.au/speech/companies-behaving-badly
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