Corruption and ways to prevent its occurrence

We often encounter the abridged biblical proverb “pride comes before a fall” in our daily lives, but in few arenas is the destructiveness of pride more evident and the subsequent fall more abrupt than in the business world. Leaders who don’t practice humility can become arrogant and believe they are infallible simply by not engaging others within their organizations and understanding that other employees are making valuable contributions as well. On discussing the inherent problems associated with leadership, James Kouzes and Barry Posner write that no problem is more insidious to a leader than the “treachery of hubris”, and go on to maintain that leaders who focus on their follower’s achievements are more likely to be able to avoid the temptations of power. (2002, pp. 396-397). Afsaneh Nahavandi concurs that power changes how leaders view themselves, causing them to distance themselves from their followers, and resulting in them making unethical decisions, (2006, p.171).
Former Enron CEO Jeffrey Skilling, routinely described as arrogant by the media, used this distance as a defense in his trial by claiming that he was unaware of his employee’s actions in manipulating the firm’s accounts. The accounting manipulations ultimately caused the collapse of Enron and resulted in losses of $60 billion in shareholder value. Skilling’s arrogance, displayed throughout his career at Enron, was apparent to observers at his trial as well, where he appeared controlling, refused the advice of his attorneys, and was even witnessed telling his attorneys what to do from the witness stand, (Clark & Lavelle, 2006). Observers of the trial could not perceive that someone in need of so much control was unaware of what was going on within the company. Power had so corrupted Jeffrey Skilling’s sense of self-confidence that he had become arrogant, he believed himself infallible to the extent that he hindered his own defense.

In his seminal article on the subject, Daniel Goleman defines emotional intelligence as a competency that allows a leader to effectively implement change and lead others, (1998). Through researching leadership at 200 global companies, Goleman states that there are five components to emotional intelligence that make a leader successful: 1. Self-awareness, the ability to realize how your emotions affect others, 2. Self-regulation, the ability to think before acting, 3. Motivation, a passion to work towards realizing ones goals, 4. Empathy, the ability recognize the emotion make-up of others, and 5. Social-Skills, the ability to manage relationships. Goleman elaborates that the basic hallmarks of these components respectively as: self-confidence, integrity, organizational commitment, sensitivity, and persuasiveness. Summarily, although intelligence and skills matter in leadership, without the traits that comprise emotional intelligence someone can never be a great leader. Additionally leaders with these personality traits are less prone to becoming corrupt.

Leaders with narcissistic or Machiavellian personality traits are more prone to corruption as leaders as individuals with these personality traits are more likely to abuse power. Nahavandi states that the behavior of these personality types can wreak havoc within an organization by terrifying their colleagues and subordinates and eroding trust, (p.172).

Goleman states that evidence suggests that some people are born and raised with higher levels of emotional intelligence; that it naturally increases with age through maturity, and also can be learned but that the process of learning requires “sincere desire and concerted effort”, (1998). Organizations can facilitate this effort by establishing codes of conduct that raise the ethical and moral behavior of employees, facilitating training on these standards, and implementing a response initiative that encouraged employees to report ethical abuses.


References:

Clark, K. & Lavelle, M. (2006, June 6). Guilty as charged. U.S. News and World Report, 140 (21), 44-45. Retrieved from EBSCOhost Business Source Complete.

Goleman, D. (1998, November/December). What makes a leader? Harvard Business Review, 76 (6), 93-102. Retrieved from EBSCOhost Business Source Complete.

Kouzes, J. M. & Pozner, B.Z. (2003). The leadership challenge (3rd ed). San Francisco, CA: Jossey-Bass.

Nahavandi, A. (2006). The art and science of leadership (4th ed.). Upper Saddle River, NJ: Pearson Prentice-Hall.