CEOs receive poor ratings on business ethics and integrity

95% Of Employees Surveyed Believe CEOís Ethical Behavior Plays A Meaningful Role In The Way Business Gets Done;

Yet, Employees Believe Most CEOs At Large Companies Are ìRuthless In Their Pursuit Of Successî and ìLack Integrityî

Nearly all (95%) of the 1,655 respondents surveyed in the US and abroad in the latest ìFast Track Leadership Surveyî say that a CEOís business ethics remain very important and play a meaningful role in the way business gets done. Yet, when asked to grade CEOs on specific attributes respondents said CEOs at large companies ìare ruthless in their pursuit of successî (79%) and few believe CEOs ìhave integrityî (28%).

The survey, conducted in July 2005 by Fast Company magazine, Switzerland-based IMD MBA and Egon Zehnder International, includes responses of 1,665 business professionals in the US and abroad who were asked a series of quantitative and qualitative questions about the relationship between CEO leadership and business performance. Additional survey findings are included in the September issue of Fast Company, on newsstands today, and on the magazineís website, www.fastcompany.com.

Are CEOís Business Ethics Important?
As part of the ìFast Track Leadership Surveyî respondents were asked: ìRealistically, do the ethics of the CEO play a meaningful role in the way business gets done? Why?î

The overwhelming majority (95%) of survey respondents said yes.

The reasons most frequently provided to explain why they believe a CEOís ethical behavior matters include:

Leadership starts at the top; leaders must lead by example.

It has an influence on people in the organization both in terms of hiring, who works in the organization and how those people act.

The CEO represents the brand and reputation of the company. The CEO is the face of the company.

Businesses are built on trust.

Good ethics can save you money.

Those survey respondents who said that CEO ethics do not play a meaningful role in business (5%) most frequently offered the following reasons for this view:

Ethics is no longer important.

The CEO doesnít impact front line employees.

Business is all about profitability and the bottom line.

ìThese survey findings indicate that a significant disparity exists between the ethical behavior that employees expect of CEOs and what actually happens in the workplace,î said Professor Sean Meehan, Director of the IMD MBA Program. ìThe survey further reveals that employees are clearly overwhelmingly concerned with CEO ethics and integrity in business today which is vital to sustaining order in industry and the worldís capital markets. This is a universal issue. We are confronted with it by the MBA participants in all of our programs. Managers have very, very high expectations of their leadership. Leaders need to know where they stand, how to tune in to the real sentiment of their people.î

CEO Leadership Attributes
Survey respondents answered 17 questions using a scale from 0-5 (where 0 means leaders do not display a specified attribute at all and 5 means they display it most strongly) about specific leadership attributes in large corporations, small corporations, the government and media sectors and at their own company. The percentage of respondents who answered 4 or 5 is listed in below in parentheses.

Large Corporations
According to the survey, the top three attributes most associated with CEOs at large corporations are international mindset (87%), ruthless in the pursuit of success (79%) and strategic and visionary thinking (70%). Only 28% said that CEOs at large corporations have integrity.

Small Business
CEOs in small companies are considered to be passionate about their work (93%), innovative (90%) and have stamina and perseverance (76%). The majority of respondents (56%) said they believe that CEOs at small companies have integrity.

Government
Leaders in government are thought to be ruthless in their pursuit of success (32%), empathize with people from different backgrounds (29%), have an international mindset (27%) and have stamina and perseverance (27%). Only 17% said they believe that leaders in government have integrity.

Media Industry
CEOs in the media industry are considered to be ruthless in their pursuit of success (65%), passionate about their work (57%) and have stamina and perseverance (39%). Only 11% said CEOs in the media industry have integrity.

Own Company
Respondents believe that their own companyís CEO is passionate about his work (77%), has integrity (71%) and has stamina and perseverance (68%).
ìItís clear from the survey results that employees are expressing the need, value and importance of solid ethical leadership in business,î said Mark Vamos, Editor of Fast Company magazine. ìWhatís concerning is employeesí view that CEOs in certain sectors lack integrity and that CEOs give little measure to the importance of ethics and its impact on business performance. This should send a loud wake up call to everyone in the business community, government and the media.î

Examples of Great Leadership
When asked to ìname a person who exemplifies great leadership,î survey respondents most often cited (unaided responses) the following individuals in this order:

1. Jack Welch
2. Steve Jobs
3. George Bush
4. Nelson Mandela
5. Colin Powell
6. Mahatma Ghandi
7. Bill Gates
8. Rudolph Guiliani
9. Abraham Lincoln
10. Jesus
11. Winston Churchill
12. Bill Clinton
13. Oprah Winfrey
14. Tony Blair
15. Martin Luther King, Jr.
16. Richard Branson
17. Lance Armstrong
18. Pope Jean Paul II
19. Michael Dell
20. Warren Buffett
21. Dalai Lama

Among all active and non-active political leaders, Nelson Mandela was most frequently named (10%) followed by Colin Powell (9%), Mahatma Ghandi (7%), George W. Bush (7%), Bill Clinton (6%) and Rudolph Guiliani (6%).

In the business community, Jack Welch was most frequently cited as an example of great leadership (15%), followed by Steve Jobs (14%) and Bill Gates (8%).

Among entertainment and sports figures, Oprah Winfrey was frequently cited (28%), followed by Lance Armstrong (17%) and Ernest Shackleton (10%).

In explaining why they cited the people they did as examples of great leaders, respondentsí qualitative responses fell into three broad categories:

Demonstrate entrepreneurship to build a lasting legacy. The majority of individuals in this category were business leaders who had built a successful, dynamic global organization from scratch.

Have a core belief and work tirelessly to achieve its goal. This covered many of the political, academic and religious leaders nominated.

Demonstrate a high level of personal integrity and tenacity. This category related primarily to sports and entertainment leaders.

ìThe surveyís results show the importance of the effectiveness and quality of a CEOís leadership on his or her organization,î said Justus OíBrien, partner of the Global Consumer Practice at Egon Zehnder International.

ìCorporations are at last refocusing on the growth imperative. When we talk to recruiters about defining future leaders, they tell us they need people that can grow businesses. Thus, entrepreneurship in an ethical leadership frame is becoming an even more highly valued competence,î added Meehan.