What FIFA taught us: A lack of ethics will cost you

There is a need for a more values-driven leadership model in business worldwide, says a South African leadership expert, and the evolving FIFA scandal illustrates this only too well.

This August, FIFA will hold a special meeting with its sponsors to inform them of the progress made in purging the organisation of corruption.

Three months on from the eruption of the scandal, which saw top FIFA officials arrested on charges of racketeering, wire fraud and money laundering as part of a US prosecution that also indicted 14 people, the global football organisation is reportedly struggling to sign new sponsors ahead of its 2015 tournament.

Major sponsors, Visa, Coca-Cola and McDonalds have all been unusually vocal in their criticism of the scandal prompting secretary-general Jerome Valcke to admit last month: "The current situation doesn't help to finalise any new agreements."

The situation has highlighted that unethical leadership and reputational damage will impact the bottom line of an organisation, a leading academic has said.

Professor Walter Baets, director of the UCT Graduate School of Business (UCT GSB) and Allan Gray Chair in Values-Based Leadership, says that now more than ever, there is a need for values-driven leadership in organisations in South Africa and the world. “Organisations that think they are focusing solely on the bottom line can learn, in the most painful ways, that this kind of thinking comes at a tremendous cost,” Baets says.

This is a viewpoint that has been echoed by critics across the world, as the extent of the corruption within FIFA has become clearer since its seven officials were arrested in Zurich.

FIFA’s main commercial sponsors contribute over €1.1 billion over a four-year World Cup cycle, providing a platform for their brands. And according to Robert Brown from reputation inc.: “[All sponsors] are now forced to protect their own reputations by encouraging full accountability in an attempt to distance themselves from the alleged failed ethical processes of the sporting organisation.”

In South Africa, where citizens are facing controversy surrounding the Nkandla homestead as well as the hosting of the 2010 World Cup, it is critical for business to lead the way in terms of a more ethical example, says Baets.

Baets has long advocated a more holistic approach to business leadership, where leaders become more introspective and approach the organisation in a more integrated manner – a topic at the core of a new leadership short course. The course: Creating and Leading the Values-Driven Organisation is convened by Dr Tim London and includes modules offered by, among others, Archbishop of Cape Town Thabo Makgoba.

Makgoba, whose module is on spiritual leadership, says: “A core element…is to serve, not to put oneself first, following the leadership model of Nelson Mandela, Gandhi, Pope Francis and the musical guru Hayden. The leader facilitates greatness, and is in this way the very heartbeat of the organisation.”

Makgoba relates that, most often, when executives attend the course, the first thing they ask is whether their profitability is going to suffer if they embark on a new style of leadership. “But fortunately these things are not mutually exclusive,” says Makgoba. “In fact, sometimes the opposite is true.”

Even on a day-to-day basis, there are bottom-line benefits to a more ethical and holistic style of leadership, he adds. Studies show there are financial benefits in terms of greater staff retention – which reduces costs and can increase profits through opportunities to keep skilled and experienced staff.

Belinda Gibson, former Deputy Chair of the Australian Securities and Investments Commission, told Women’s Agenda Magazine: “Leaders of every organisation, whether it is corporate, not-for-profit, government or academic, ignore the health of its ethical culture at their peril.”

The return on investment, for creating a healthy climate for staff and leaders to thrive goes without saying, argue Gibson, Makgoba and Baets, while the cost of taking shortcuts around core, value-driven leadership is incalculable.

“A South African workplace survey conducted by Deloitte in 2014 revealed that 60% of companies considered leadership gaps as their biggest challenge, and 89% described the issue as urgent and important. Somewhere, leadership is missing something. Could this kind of introspective, service-oriented leadership be it?” says Baets.

For more information about the course, visit www.gsb.uct.ac.za/Create-Lead-Value

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