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- Brian Peckrill, head of the McGowan Charitable Fund, says ethical leadership is essential.He told BI that organizations that invest in their people do better in the long term.This article is part of "Culture of Innovation," a series on how businesses can prompt better ideas.
As artificial intelligence promises to accelerate the speed at which many businesses can move, it could leave less time for focusing on ethics and values.
Yet forgoing those discussions is a risk companies shouldn't take, said Brian Peckrill, executive director of the William G. McGowan Charitable Fund, a family foundation focused on what it describes as compassionate philanthropy and ethical leadership — the idea that there's more to consider than just the bottom line.
William McGowan was the founder of MCI Communications, a telecom company whose legal fights with AT&T preceded Ma Bell's 1984 breakup on antitrust grounds.
Peckrill told Business Insider that while many CEOs support the McGowan Fund's call for maintaining a focus on ethical leadership, pressures to maintain profitability can be intense.
Even though it can be a difficult balance, he said, leaders can get into trouble when they don't pull it off.
"The truth is, if you're cutting corners, it's going to catch up to you at some point. And that's what we hear," he said.
Pecrkill spoke with Business Insider about how those running organizations should think about the values they maintain as leaders.
The following has been edited for length and clarity.
Business Insider: What shapes your thinking around ethical leadership?
Brian Peckrill: What Bill McGowan, our benefactor, saw is that when a business lacked ethics and they were fully focused on profits, what suffered was people.
Ten years after Bill died, MCI and WorldCom got wiped out by a massive accounting scandal. Those who worked for MCI became millionaires because of their success at MCI, and if they didn't cash out prior to the bankruptcy, they lost everything.
So, it was very clear to our board that ethical leadership transforms lives — that this is not just a matter of what's good for society. It's good for people.
We need to create leaders who, when making decisions, look to their values. They are transparent. They're accountable to the people that they work for. They're accountable to their clients. They are they have integrity. They're thinking about how their words and their actions align, and they're empathetic to the ways that people struggle.
If you look at a metric like the Edelman Trust Barometer, there's been a slide in workers' trust in their employers.
It's shocking to see how it's fallen off. I've been thinking about this a lot in regard to the not-for-profit sector, which the data is a little bit stronger on. What I keep coming back to is that to be a trusted entity, ethical leadership matters because it means that your actions and your words align, and that you can get trust by being empathetic and credible.
Courtesy William G. McGowan Charitable Fund
With AI threatening jobs, is rebuilding trust now a bigger challenge for for-profit CEOs?
I wouldn't say that I think it's harder now. Society is constantly going through cycles of innovation. The way that our business leadership and education have progressed has put more and more of an emphasis on profit maximization. You look at MBA programs, and when they were founded, they were deeply philosophical. They were about building a whole-minded individual who can think broadly about business, and over time, they became more focused on the mathematical economics of making profits.
Once you've maxed out efficiencies, the only place to go is either breaking the law or harming people. We need to return to that holistic way of thinking. Part of that is asking not can we, but should we? What's the effect on people?
When you look at the most trusted businesses — those that are using ethical leadership as a frame — their horizon of profits is greater. Those businesses that think about their people, think about how they can invest in their people, and are not just focused on short-term profits through efficiencies, do better in the long term.
What lessons can for-profit CEOs learn from nonprofit leaders about building trust?
A major element to this is that when I say independence in the not-for-profit sector, this means leading with your values. It's setting up a charter between your stakeholders in your organization that you're going to deliver on a certain mission and that you're going to invest your money in this type of approach. I don't think it's very different for the for-profit sector.
When people align themselves with an organization, they're expecting the organization to live up to their values. It's when organizations lack integrity and they fail to live up to the values that they put on their website and that they posture through media, that people lose trust in organizations. And I think that the for-profit sector could learn some lessons from not-for-profits in this regard.
