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Is the leader accountable for the entire organisation?

Ksenia Zheltoukhova

10 September 2012

In an ongoing Reuters’ series Lucy Marcus - an eloquent panellist from The Work Foundation’s annual debate on responsible capitalism – explores the questions pertinent in modern boardrooms, including the opportunities of social media, the gender divide, and the shareholder voice.

One of the episodes called “Director Contagion” raises an important issue of leaders’ accountability for the decisions that intentionally or unintentionally harm  organisational performance, customer experience and organisational brand. A wealth of recent examples from across the UK showed many respectable CEOs  in an unflattering light, causing them to resign so as in order to appease the growing lack of confidence in their leadership.

Lucy Marcus states that for such leaders, stepping down is an honourable thing to do, implying that leaders hold ultimate accountability for anything that goes wrong in these organisations – and that is hardy disputed, even by the leaders themselves. Indeed, The Work Foundation this year has heard top managers admitting that they are simply paid to take a bullet, and go from hero to zero, if needed. Such ability to self-sacrifice is, in fact, a behaviour of a leader.

What is not so leader-like, though, is the prior assumption of those at the top that no responsibility follows unethical actions, as long as you are not caught out. No need to go further than The Apprentice to see that ruthlessness and over-confidence in entrepreneurs go a long way. In this case, removal of the head of the business is an exemplary punishment to stop the contagion across the business.

It is curious to remember, however, that all of those leaders now singled out as unethical were chosen to be in their roles. This brings to question not just the integrity of the individuals themselves, but the integrity of the selection procedures, as well as the criteria deemed to bring about organisational success. A ‘surgical’ approach to solve this cultural issues is simply not enough.

Instead, a thorough ‘treatment ’ of internal and external organisational values is needed. Until that treatment is applied, there will never be a lack of (short-lived) jobs at the top.