“We need moral courage”

1 May 2013. “Who does not dare does not win” is not only a popular adage but is also applicable in business practice. Thus it does not come as a surprise that courage is often invoked as an attribute of successful leadership in management theory: the courage to run risks, lauded as a chivalrous virtue in battles for glory and honour in olden times, thus becomes an economic virtue in the competition for market shares.

Courage without a sense of proportion
Good executives should therefore make bold decisions. The incentive is often provided by ample bonus and commission payments. If their decisions pay off, managers receive princely remuneration. Who dares a great deal should win a great deal. And thus the stakes become higher and higher, the risks bigger and bigger. The courage to speculate turns into speculation mania, virtue degenerates into daredevilry. It is this kind of courage, courage without a sense of proportion and without any regard for consequences, which ultimately brought us the biggest financial and economic crisis since the Great Depression. And today, we are all facing the music together.

The general public’s trust in our economic leaders’ willingness to keep the welfare of the community in view has suffered in the past few years. One of the key lessons to have been learnt from the crisis is the fact that an economic system of integrity cannot be had without people whose actions are imbued with integrity. But it is precisely acts of integrity which appear to become ever more difficult under the systemic conditions of our economy.

Pressure jeopardises integrity
Constantly increasing competitive pressure, precarious working conditions, job insecurity, on the one hand, and excessive rewards for purely result-driven actions, on the other hand, provide an obstacle to considerations guided by principles time and again. Working in organisations often has an additional aggravating effect; clique and group mentality, uncritical loyalty, fear of exposure or disadvantageous performance evaluations often result in a situation whereby employees close their eyes to moral infringements instead of making them known.

One example we remember only too well is that of Kweku Adoboli. The UBS trader was only allegedly able to build up trading positions over a lengthy period of time without being noticed. Now he is in prison because of it.

The really courageous people are not those who sacrifice themselves to serve profit maximisation, but those who consistently accord their values and principles priority even if this results in personal disadvantages for them. They are the people whose actions, even in adverse conditions, are guided by justice and the common good instead of personal gain. Such people also exist in the economy.

Managers with a sense of the common good
Let us think, for example, of the managers and entrepreneurs who revolted against the South African apartheid regime in the mid-1980s, or of the so-called whistle-blowers who risk their careers in order to point out wrongs in corporations. Or let us think of people like the American, Brooksley Born, who gave an early warning of the collapse of the financial system and spoke up in favour of a consistent regulation of derivatives against all resistance and in spite of scorn and derision, albeit in vain.

Courage is also displayed by university graduates who decline lucrative and prestigious offers because they link the choice of employer to overriding principles and to conditions of responsibility instead of the amount of their salaries alone. Or by employees who give their families priority over their career objectives. Or by entrepreneurs who provide disadvantaged people with an opportunity to do a meaningful job in spite of competitive disadvantages that might threaten themselves. It is not the courage of (personal) success but the courage of morals which characterises such people.

Self-restraint instead of an exaggerated opinion of oneself
Moral courage is quite generally the courage to do the ethically correct thing, even if a decision is linked to personal risks and disadvantages. It is a courage that is not driven by opportunity but by personal integrity: the courage to stand up for values and principles instead of tacitly accepting their violation.

Contrary to what we conventionally conceive of as courage, this courage is not defined by stretching and extending our limits; rather, it is characterised by setting and accepting limits. Moral courage is based on self-restraint instead of an exaggerated opinion of oneself. It is the courage to accord reason priority over (herd) instinct.

Opportunists do not improve the world
Moral courage is the link between higher principles and their implementation in practice; without it, responsible economic activities are impossible. Thus it is moral courage that should be specified in managers’ job profiles, and we would do well to well to encourage it in the education of future leaders – not only because the survival capacity of the economic system as such depends on it but also because in the past, it has never been opportunists, but always morally courageous people who improved the world to lasting effect.

Bild: Photocase / Vodoo!