The modern world context for responsible leadership

The increasing dynamic and complexity of daily business, a variety of lifestyles and beliefs about what is right or wrong, as well as differing legal regulations make the task of leading responsibly in a globalizing economy more difficult, complex and uncertain.

In addition to this, grand challenges like global warming, rising inequality, global migration and poverty, put not only pressure on governments and international organizations, but also on business firms to contribute to a sustainable future for people and planet.

As a consequence of the above, those in leadership positions at firms find themselves increasingly facing demands to assume responsibility, not only toward shareholders, but also toward society and the environment.

Societal groups and NGOs ask for transparency of business conduct as well as socially and ecologically responsible decisions from business leaders. The notion of responsibility is therefore clearly an important one for a firm operating in the 21st century. Yet, unlike other more traditional aspects of business, examining responsibility raises many questions for which the answers are not always simple.

One reason that we cannot find simple answers to questions of responsibility is that it is a concept that is difficult to pin down. While responsibility can and should permeate through the whole firm and should underpin and influence every business action, it runs the risk of being perceived as something that is difficult to grasp and less concrete than other aspects of doing business.

Because of the far-reaching yet sometimes hazy nature of responsibility and responsible leadership, business leaders often find themselves faced with an initial and key challenge: how to define what responsible leadership really is. The problem is that the term can appear vague and mean different things to different people. How can you become a responsible leader without having a clear definition of responsible behaviour to guide you?

Theoretical thoughts as well as asking managers facing these challenges of the 21stcentury revealed common themes. Managers questioned about the role of responsible leadership in business firms tend to agree on a series of common aspects. These aspects also reflect what scholars increasingly consider responsible leadership to be in today’s globalised business environment.

In a very basic sense, responsible leadership can be defined as the management of a corporation’s interactions with society aimed at addressing the corporation’s various stakeholder concerns and contributing to the multiple bottom lines of economic, social and environmental performance. The leader is thereby the one who enables and moderates interactions with the various stakeholders of the company.

A key element of responsible leadership is having the ability to make informed ethical judgments about existing norms and rules. Especially when overseeing global business operations, where leaders face a diversity of rules and regulations, have to engage with various cultural norms, and operate in contexts where there might be insufficient legal guidance. Here responsible leaders should be able to critically question norms of business conduct they deem wrong.

 

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…With Atta Kwaku Boadi

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