Ethical Decision-making & Leadership: Key To Long-term Business Success

In every part of the globe, effective ethical decision-making is crucial for long-term business success. An EY research revealed that companies prioritising ethics outperform those that do not, with 85 per cent of investors considering ethical considerations when making investment decisions. Moreover, organisations with strong ethical cultures experience 30 per cent higher profitability, according to Harvard Business Review.

As leaders navigate complex challenges, integrating ethics into decision-making is vital. Speaking at a panel session on 'Stakeholder Capitalism, Business Ethics and Leadership Challenges Today', experts emphasised the importance of ethical conduct in both personal and professional life and highlighted the role of education in fostering personal ethics and diversity. 

Meenakashi Lekhi, lawyer and former MP said that ethical conduct and behaviour match in life, not just in business as it is just one small part of what people do. “We live, we need money, we need to be gainfully employed, we need to make profits. And that is just a small part of our lives.” "

While talking about technology, Lekhi added that ethics play a crucial role in AI adoption. We can utilise AI to enhance safety or risk exacerbating social issues like unemployment and crime. The key lies in the moral compass, she added. Rather than prioritising cost-cutting and automation, there is a need to focus on responsible AI deployment, integrating ethical living, corporate social responsibility, and stakeholder engagement.

Anand Stanley, Member, Board of Trustees, Darden School Foundation & President, Asia Pacific, Airbus stated, "Business is not just about profits, it’s about creating value. But what is the value? Is it shareholder, customer, employee or community value? This led to even bigger questions about morality, ethics and leadership.”

Stanley added that being a good leader is not just about business success, it’s about purpose. The hardest challenge is managing yourself, your ethics and your impact. Ultimately, purpose is what drives everything else, caring, listening and leading with integrity. That’s the core of true leadership: not just profits, but purpose-driven impact.

Ethics In Business And Education
While talking about corporate, profits, excellence and ethics, B. Thiagarajan stated that this excellence may not be ethical. He added that there is a need for legislation. “To pay the rentals who are micro, small and medium enterprises in this country, you require a law that is within so many days, you need to pay. I do not think that it is compliable in big corporations even today.”

While sharing his personal experience, Thiagarajan narrated, “I was in with classmates last week, the time that we spent here in this country to receive payment is some 70 per cent of a total bank debt management and corrections. Now, individuals say that my value system is different as an individual, but when it is companies or businesses, it is okay, because the corporate purpose is making profits. So the question is, is it the stock market that is right? Because stock markets look at the profits that are changing. Of course, fraud is taken as an unethical subject. But other than fraud, there are ethical issues that how you conduct the business that has not happened.”

Notably, there are key techniques and leadership challenges that still exist across the spectrum. Effective leaders face common obstacles, from personal experience to mentorship. During the discussion, Deepali Nair, Group Chief Marketing Officer, CK Birla Group shed light on academic and professional experiences spanning decades distilling key techniques and timeless principles.

Nair stated, “I think the schools and the colleges that we go to, owe it to society, to teach both personal conduct and ethics and kind of point out the right path for future generations and gender sensitivity. I do hold schools and countries responsible for that. We have the opportunity to shape younger minds and it is extremely important for these discussions to happen.”

R. Marc Johnson, Senior Associate Dean and Chief Strategy Officer, UVA, Darden School of Business emphasised that an informed citizenry is crucial for a functioning democracy, stating, “If we think not enlightened enough the remedy is not to take it from them, but to inform their discretion by education.” In this era of artificial intelligence (AI), Darden recently launched the Lacy Institute for Ethical AI in Business, aiming to equip leaders with the skills to navigate AI's complexities while benefiting society.

Meanwhile, experts noted the importance of personal ethics, family values, and the role of education in shaping leaders.