Positive Culture and Good Governance - The Virtuous Cycle

Positive Culture and Good Governance - The Virtuous Cycle

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In the prior blog posts we discussed that each of us has “A Duty of Care” and that duty is guided by our faith. Fortunately, the common themes in the guidance across all major faiths, along with the Sustainable Development Goals (SDGs), help us increase our individual impact through the power of numbers and through collaboration.

There is something else at work that helps us improve. We can’t see it, so we can take it for granted. Think of it as a virtuous and self-reinforcing cycle. The cycle exists in cultures where good things are routine.

In a society, when we see people helping others in need, the norm or the societal expectation is that everyone helps. This positive culture contributes to more good things being done and the virtuous cycle reinforces the positive culture. Conversely, when people see others focused on helping themselves as opposed to others, often to the detriment of those without power, then the society lacks an expectation of help and lacks the virtuous cycle.

The same is true in companies, when employees see colleagues (and especially the leaders) treating customers, other employees, and suppliers with respect, dignity, and integrity, the norm or corporate culture is that everyone deserves respect, dignity, and integrity. More good things happen, and bad things are less likely; another virtuous cycle. Conversely, when employees see employers (and especially the leaders) treating stakeholders poorly, then the company lacks a positive culture.

Wells Fargo, a bank in the US, is a company without a positive culture. There have been a series of scandals that reveal that the company has not treated customers with respect, dignity, or integrity. The company is being punished for its bad behaviour. Material weaknesses in the company’s governance helped a bad culture to fester. Wells Fargo is trying to change; however, a lot of damage has been done and regaining customer trust will not be easy.

Whether it is a country or a company, the elements to create positive norms and a strong culture are part of governance. Good governance provides fertile ground in which good things grow.

Good governance enables the virtuous cycle. When people live with good governance, they see others living “A Duty of Care” and find it easier to do their duty. The virtuous cycle enables good actions to beget more good actions.

As leaders, we need to be aware of whether we are nurturing the virtuous cycle through our actions or whether we are harming the virtuous cycle through neglect or, even worse, through actions detrimental to the virtuous cycle. By creating and reinforcing the elements of good governance, the virtuous cycle is easier to maintain.

Both of us are late in our careers. We find the importance that the younger generations place on these sorts of issues very gratifying. As part of our duties, we strive to help them pursue their noble aspirations, while applying some of the practical lessons we have learned throughout our careers.

Each of us can contribute to one or more virtuous cycles. Faith can be an important part of clarifying your duty and faith leaders can help you understand how your duty enables these virtuous cycles. One of the best ways to reconnect with your duty is through reflection. Every faith has guidance to be reflective. During those periods of reflection, ask yourself:

  • What have I done to live my duty?
  • What can I do to make the virtuous cycle stronger in my community? …in the company where I work?
  • What have I learned that would be valuable to people younger than me? What can I do to share this wisdom?

Wassalam

Kurt and Daud


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Comments (11)
2 years ago
Responsible Finance & Investment Foundation

This is a great reminder and one point I would add is that not only do employees follow when leaders treat customers well, they are more likely to treat customers well when they feel their leaders value them and their contribution. In Wells Fargo, in addition to the scandals you mention, the company pushed employees to treat customers badly and also tried to punish employees who pushed back. Here is a podcast from NPR's Planet Money on it: https://www.npr.org/sections/money/2016/... (edited)

2 years ago
DVA Consulting Sdn Bhd

Many thanks for this valuable contribution Blake

2 years ago
Magni Global

Agree - an excellent point!

2 years ago
NAICOM

A fantastic piece. Also, what example one is setting or what legacy is one leaving behind. (edited)

2 years ago
Magni Global

Agree

2 years ago
IslamicMarkets.com

Wells Fargo is a perfect case study in how culture can be a competitive disadvantage. But as stakeholders and investors, we need a better measurement and actionable metrics of culture within organisations, and employee turnover could be one good proxy for this.

This means not just looking at how many employees are leaving, but which ones and from which departments. And we're all used to having exit interviews by companies, but how about exit interviews led by independent bodies / regulators, especially for large corporates? (edited)

2 years ago
Iium

well a perfect case study, in terms of customs and culture, but from financial points of view let us think outside the box (edited)

2 years ago
Magni Global

Interesting point. Having the interview done by a third party would be very interesting. (edited)

2 years ago
Waqaf Clinic

Truly agreed, the key to a good governance lies in each and every one of us in the organization or community that will contribute to a healthy vicious cycle in any organization. Together with a good governance and good conscience, we can certainly create a healthy living or working environment that will help to steer our country to a greater height of achievement. (edited)

2 years ago
DVA Consulting Sdn Bhd

Thanks for your support and kind comments. You clearly get the message. The challenge is always in the execution

2 years ago
Magni Global

agree