INTERVIEWER: Hello and welcome to latest IBAC podcast. IBAC is Victoria’s first anti-corruption agency and our role is to expose, investigate and prevent public sector corruption and police misconduct.
Today we’re fortunate to be joined by Dr Michael Macaulay, Director at the Institute of Governance and Policy Studies and Associate Professor in Public Management at the School of Government at Wellington’s Victoria University.
Good afternoon Dr Macaulay.
DR MICHAEL MACAULAY: Good afternoon. Thank you very much for inviting me.
INTERVIEWER: You’re in Melbourne to speak with public sector managers about ethical leadership, and its role in preventing misconduct and corruption. What is ‘ethical leadership’ and why is it important?
DR MICHAEL MACAULAY: Ethical leadership is important primarily because it’s also effective leadership. There’s no shortage of studies to show that the more integrity we think our leaders have, the more effective we find them as well. Even more importantly, though, maybe, is that the behaviours that ethical leaders demonstrate are those that we all now recognise as effective behaviours as well. And now in years gone by, the good leader has been seen as someone who is very task orientated, who can get the job done so on and so forth, but I think now there is a much better understanding that the way in which we get the job done as well also matters. And to be clear in your expectations, to be supportive, to display empathy, emotional intelligence – these are all the hallmarks of ethical leadership.
INTERVIEWER: So, what practical steps can managers take to strengthen organisational integrity through their leadership?
DR MICHAEL MACAULAY: Well there’s all sorts of things they can do. They can set up integrity management systems to make sure the effective processes and practices are in place, to make sure there is an effective monitoring and evaluation system, to make sure there’s ethical competencies built into a performance framework, to make sure there an appropriate rewards and sanctions so on and so forth.
But there’s also a number of different behaviours that they can model. I mean just even the bottom line one, the most important ones have a very highly visible good standard yourself, maintain an outward orientated people focus, be open and communicate, have good listening skills, have a very strong sense of your own personal accountability. These are the kind of leadership traits and leadership behaviours that you can exhibit as well.
INTERVIEWER: But ethical leadership is just one aspect of preventing corruption and misconduct. While, recognising that every organisation is unique and they’re going to face different circumstances, what other key building blocks are there of an effective integrity management system?
DR MICHAEL MACAULAY: The key building blocks to an integrity management system are essentially the same building blocks to any kind of management system and an effective IMS needs to have, essentially, a balance between values and compliance. Organisations that completely focus on compliance alone don’t tend to have ethical cultures within their organisation and don’t tend to have ethics embedded within the system itself.
There needs to be the appropriate programs to translate values into action. Traditionally, we see that with things like codes of conduct, but obviously there’s a whole host of other things in place. And again, you don’t want to focus too much just on the compliance mechanisms alone because if you go down that path, as I said, you’re not going to embed the ethical culture. So the other key building blocks, really, I’d say are to make sure that firstly as many people as possible are involved in the defining and creating of what those organisational values are.
The decision making process itself comes really, really important in trying to build that welcoming, supportive and discursive culture. Another thing is to make sure there’s the best ethical leadership at all levels. It isn’t just about senior management and senior leaders, although they are obviously crucial. I’ve just alluded to the idea of building integrity into continuous improvement and building it into performance frameworks, developing the idea of ethical competence so on and so forth, and making sure that’s appropriately evaluated whenever it’s necessary.
INTERVIEWER: You mentioned ethical competence. Can you expand on that a little bit?
DR MICHAEL MACAULAY: There’s a number of ways we can think of competence. If we think of competence in that classic kind of human resource way of knowledge, skills and attitudes or sometimes knowledge, skills and attributes depending on your point of view, you can actually model ethical and integrity behaviours into that competences. And these are the kind of things you can demonstrate in a personal development program every year. For example, ethical decision making – do you follow a structured, logical decision-making model, maybe one that was already known within an organisation, or did you just follow your own logic. Do you weigh up evidence appropriately? Do you make a judgement that is fair? Do you try to monitor, rectify and minimise the harms that might be caused by your decision?
Another one would be, perhaps, moral sensitivity. You can actually measure people and their degree of empathy that they display or the degree of small p politics sensitivity. You could look at even something like moral motivation. You can look at things like public service motivation and people having an outward focus in their decisions and you could get people to demonstrate the behaviours and the times they’ve displayed that. When have they definitely put the public interest above their own interests or when have they put their team first, above themselves.
INTERVIEWER: We often hear about the term ‘setting the tone at the top' in terms of ethical behaviour. What does that involve, and how does that fit in with what you’ve been talking about?
DR MICHAEL MACAULAY: It’s quite a multi-faceted thing but I’d say there’s at least three essential components if we’re talking about tone at the top. One is making sure there are very clear expectations made. You make sure everyone in your organisation knows what is expected of them. Two, you’ve got to make those expectations realistic. You’ve got to make sure that people have got something they can actually achieve and find attainable and so they’ll feel rewarded and intrinsically motivated on top of that. And finally, number three, and probably the most important, and I think I may have mentioned it earlier, is that you mirror those behaviours yourself. There’s nothing that causes unrest more than the smell of hypocrisy or double standards. Nobody likes a leader who says one thing but does something completely different.
INTERVIEWER: So what challenges would managers or organisations face if they’re trying to instil these types of values in their organisations?
DR MICHAEL MACAULAY: The first one is just the challenge of actually embedding an integrity culture. One of the things I think people push back on a little bit is that as soon as you start using the words ethics, morality, integrity and all these things, there’s almost an implicit assumption that you’ve being judged and that something is wrong.
Now, building a high integrity culture, you could do that in an organisation that performs very well already. It’s not an acceptance or indication that there’s a massive, massive problem. Although, obviously, sometimes there is. So you’ve got that kind of, concern about trying to make sure you’re actually being proactive and not being reactive – that you’re doing things to improve and you’re not doing things to try and judge or get rid of a particular problem. And linked to that – the other real challenge and this is a constant challenge is that the journey never ever, ever ends. You cannot stop when you suddenly think you’re an ethical organisation – ‘we’re marvellous’. There are plenty of organisations that have done that. They’ve won awards and all sorts of things and people have taken their foot off the gas. And inevitably, little issues emerge. The key thing to remember about integrity, whether this is about the individual or at the organisational level, is that it is the process of constant reflection. Your moral views and values would have changed in your lifetime and that’s a good thing and they probably will change again. There’s a myth that moral values are these universal, set in stone, they don’t change kind of things and that’s just not true. We do change, society changes, our expectations change, and our workplace changes. And if we are not going to be honest, reflective and listen to other people, as well as inwardly reflective in our own behaviours and values, we might as well just forget the whole thing.
INTERVIEWER: Now part of ethical leadership is setting the standard between what’s right and wrong. But what happens when that distinction between what is right and what is wrong get muddied?
DR MICHAEL MACAULAY: It’s typically this manifested self either in a clash of values versus behaviours – so people saying one thing and doing another, but more often, it actually usually comes around through a clash of different values – so your own individual beliefs against the thing you’ve been asked to do or the organisation’s values versus the idea of what you perceive to be the public interest, or the public good and this can manifest itself into things like noble cause corruption and those kind of areas.
INTERVIEWER: You used the term "noble cause corruption”. That could imply something is positive and the wrongdoing could lead to greater public good. But can "the ends" ever really justify "the means" and can deliberate breaches of the law or codes of conduct ever be justified?
DR MICHAEL MACAULAY: The ends rarely justify the means to be brutally honest with you. More ethicists have a general rule of thumb that when you’re thinking about an ethical dilemma, you think about them in terms of consequences and ends and what will happen and you also think of them in terms of principles, what are my obligations, what are the values clashes etc. And the general rule of thumb is that principle-based arguments always outweigh consequence-based arguments no matter what they are, unless the consequences are really, really extreme. So the classic one is the torture dilemma, do you torture a man who you know has information about a bombing in the city¬ – absolutely not in any circumstances unless it’s a nuclear bomb and it’s going to obliterate everybody. In those situations, or most noble cause corruption situations you don’t even need to have a principles versus consequences based argument because the ends themselves are frequently misunderstood or not understood at all. So the classic one again, the torture dilemma – you don’t need to apply the principles or the sanctity of human rights, although they’re good things to apply, you can simply apply the very factual argument that torture doesn’t work.
INTERVIEWER: So going to a more traditional idea of corruption where there’s personal benefit involved. Where perpetrators claim they were undertaking those acts for a noble cause, do you think that reflects a genuine ethical dilemma for the employee or in your experience, is it more often a way for people to excuse or rationalise wrongdoing after they’ve been caught?
DR MICHAEL MACAULAY: I think there’s another form that it takes. It’s more along the idea of ‘I was following orders’. In a major organisation, if you don’t feel like you have the power or maybe sometimes also the authority to say no or to challenge and you feel like you have to blindly obey whatever the directions are that come your way because you feel you’re in that part of the hierarchy then that’s a much more realistic problem I think than the traditional idea of noble cause corruption. Because it’s things that we find – it’s about the power of relationships in our organisations and potential bullying, potential intimidation, potential coercion, potential fear, potential collaboration of course and collusion. Whatever the individual motivations may be, there will be environmental factors and structural factors that play in an organisation that allow that to happen or to mitigate against that happening and that’s what we can protect against with integrity management systems.
INTERVIEWER: And for an individual, who feels like they’re coming up against those kind of environmental factors, is there anything they could do in general to overcome them or are those mitigation strategies going to be different in every circumstance?
DR MICHAEL MACAULAY: It is obviously all context dependent. The first thing to see is what are the institutional support mechanisms there, and hopefully, if you’re in a robust enough organisation, they will be there. There will be a person you can speak with, there will be a hotline you can call. If it’s a problem with your line manager, you’ll be able to circumvent that and talk to somebody else. If they’re not there, you obviously need to do other things – you need to keep records, you need to form alliances, you need to check to see if you’re going mad or whether other people are experiencing these things, but that’s not easy of course. It’s far better to have the institutional mechanisms in place to, as I said, allow people to have that kind of psychological safety, and that ability to feel – not necessarily protected, although protected is important as well – but just kind of comfortable and safe and say ‘actually, I think there’s a problem here, and I know where I can talk about it and who I can talk about it with’ – that’s what you would need.
INTERVIEWER: But building a culture like that, it’s almost an amorphous concept. It’s easy to know when you’ve got there but if you’re coming from an organisation that, maybe, hasn’t had a history of a supportive culture like that, how do you get from that position to where you want to be going?
DR MICHAEL MACAULAY: That’s a fantastic question because that brings us all the way back to the initial part of the circle in ethical leadership. Now clearly if you’re at the coalface of working, there’s probably very little that you’re actually going to be able to do. But if you’ve a little bit of autonomy and a bit of decision-making responsibility then you use that wisely and ethically as you can. But this is why you require an ethical leader – this is why ethical leadership is just good leadership because it’s not a case of just thinking ‘oh, we’re building an integrity culture’ – although you will be doing that anyway. You’re just thinking, ‘we’re building an effective culture, discursive culture, supportive culture, transparent culture, a caring culture’. We should work in an organisation that is open and supportive no matter which organisations they may be.
INTERVIEWER: Dr Macaulay – thanks so much for talking with us today and sharing your insights on leading ethical organisations.
DR MICHAEL MACAULAY: Thank you very much.
INTERVIEWER: That was Dr Michael Macaulay, Director at the Institute of Governance and Policy Studies. For more information about corruption and how to prevent it, go to www.ibac.vic.gov.au or follow us @IBACVic on Twitter.