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I wish I could remember where I read this, but recently in the blogosphere someone pointed out that your external reputation can never be better (for long) than your internal reputation. What your employees think & feel about your company has a huge influence on the reputation you have with the rest of the world.

I agree that having a good reputation is a type of "social capital" that can be spent when disaster strikes.

But, there are other types of social capital to consider as well. For example online presence. If someone start badmouthing your company online, you can be the most ethical company in your market, but if you don't have online fans that will come to your aid you might just be, out of luck.

I agree with the gist of this article, which is excellent. In a world in which the term "ethical leadership" is often considered to be an oxymoron, I agree that an individual's and an organizations' reputation should never be compromised by any act(s) or omission(s).

Leaders should lead by example, rather than empty words. Here are my views on leadership:

Leadership is the art of mobilizing others toward shared aspirations. Leaders must take care of employees who, in turn, are responsible for taking care of customers, stakeholders, and related outside parties, such as the government and the community, in an ethical manner. This approach also considers implications for the environment and results in profitable growth combined with an increase in the welfare of all parties involved.

Great leaders are visionaries whose intuition helps them to recognize and capitalize on business opportunities in a timely manner. Their success is based on surrounding themselves with “like-minded” professionals who complement them to help reinforce their strengths and eliminate their weaknesses. They build teams consisting of individuals who complement one another in a way that ensures consistent performance in line with corporate goals. The mantra embodied herein is “Build grand castles in the air while ensuring that they rest on solid foundations.” This is in direct contrast to mediocre leaders who surround themselves with yes-people who, by their very nature, are unable to contribute positively to the bottom line!

The wisdom of effective leaders enables them to appreciate the views of their inner circle and others. In situations where consensus cannot be reached, they have an uncanny ability to cut to the chase and make informed decisions. They foster an environment that encourages the sharing of ideas through brainstorming while realizing that innovation need not be preceded by the existence of committees.

True leaders place a great deal of emphasis on culture and shared values. They realize that business involves human beings and that profitable growth results from fruitful relationships. They normally possess both formal and informal power. Formal power is entrusted to them by virtue of their position in the company. Informal power results from their core belief system. They lead by example, thus earning the respect and admiration of their peers and subordinates. As a result, employees are enthusiastic about going beyond the call of duty for “their” leaders.

Great leaders build organizations that are vibrant and performance driven. They structure employee compensation packages in a way that promotes and reinforces the right behaviors and rewards people on the basis of individual as well as team performance. They believe that a base salary pays the bills, whereas variable compensation, including earnings before interest, taxes, dividends and amortization (EBITDA)-based bonuses, motivates employees to challenge themselves and increase their contribution to the firm on a consistent basis. These leaders find reasons to pay bonuses as opposed to those leaders who find reasons to deprive employees of bonuses they truly deserve!

Leadership traits can create a virtuous cycle for the firm’s management, employees, clients, stakeholders, and others. Great leaders have a natural flair. There are those who believe that their effectiveness can be increased through education, other methods of training and development, and experience, though to a limited extent.

Ethical leadership calls for morals, fairness, caring, sharing, no false promises or unreasonable demands on others, etc. Is “ethical leadership” an oxymoron?

I have a policy of distributing free abridged versions of my books on leadership, ethics, teamwork, motivation, women, bullying and sexual harassment, trade unions, etc., to anyone who sends a request to crespin79@hotmail.com.

Maxwell Pinto, Business Author
http://www.strategicbookpublishing.com/Management-TidbitsForTheNewMillenium.html