Teams commit when they know their leaders value transparency over expediency. In short, ethics pays.
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When we were selected as part of the very first class of William G. McGowan fellows, neither of us fully grasped the journey ahead. At the time, we admittedly thought we had earned a scholarship. What we gained instead was a lifelong reminder that leadership is not just about results. It is about values.
The McGowan Fellows Program is unique in that it doesn’t merely reward academic excellence. It challenges each fellow to confront how decisions are made in business, especially in the gray areas where “legal” and “ethical” may not align.
But for us, it was an early nudge to ask: “Would I feel comfortable standing before my peers and defending this choice?” If the answer was no, we knew we had to chart a different path.
Ethical business leaders needed now more than ever
This kind of grounding feels more urgent than ever. A recent State of Moral Leadership in Business report found that 95% of employees believe that moral leadership is more important than ever, yet respondents said only 9% of CEOs and 11% of managers consistently conform to the highest level of moral standards.
The result is a growing crisis of trust.
Gallup further reports that just 21% of employees are engaged at work, with lack of engaged managers supervising them cited as a key reason why.
And customers, too, are voting with their wallets. The latest Edelman Trust Barometer shows that 63% of global consumers buy from or advocate brands based on their beliefs and values.
For business education ‒ our future leadership pipeline ‒ the time is now to seize the day and fill the gap of values-based leadership.
In our experience, ethics and values-based leadership is frequently a single elective subject in college. With mounting demand for principled decision-making, MBA programs have an excellent opportunity to drive integration of ethics further into curricula and to weave ethics into culture.
When we first convened as McGowan fellows, we were not given a blueprint; we were given a challenge: Decide how you can have an impact. Our cohort developed an ethical leadership curriculum.
Ethical leadership should be seen as a cost
Today, the experiential learning and the values embedded within the curriculum we shared brought us together as business partners, and that initiative, born from 10 students scattered across the country in the first McGowan cohort, still influences young leaders today. It is proof that values-based education can move beyond talk to tangible outcomes.
But this work cannot stay on the margins. If today’s organizations want resilient, innovative leaders, they must invest in embedding ethics at the heart of training and mentorship.
Consider the costs of inaction: Corporate scandals erase billions in market value, and reputational damage is nearly impossible to recover. As Warren Buffett famously put it: “It takes 20 years to build a reputation and five minutes to ruin it.”
Our careers since McGowan have only reinforced this lesson. Ethical leadership is not a cost; it’s a long-term advantage.
In competitive trust-based industries, stakeholders remember integrity. It’s part of the reason the McGowan Fund established the Ethical Leader of the Year Award, an accolade bestowed to one leader from the Fortune 500 annually. Honorees are those who exemplify courage and accountability ‒ principles directly connected to bottom-line growth.
Teams commit when they know their leaders value transparency over expediency. In short, ethics pays.
The call to action is clear. Business schools are well positioned to answer the call and elevate ethical leadership from elective to essential, from a single course to a defining ethos.
Business ethics is a ‘bottom-line’ issue
Employers must recognize that cultivating moral leaders is not a luxury, but a strategic imperative.
And alumni, like us, must demonstrate by example that ethical decision-making is not just possible in business, but it is powerful and it is profitable.
Decades ago, few MBA programs offered entrepreneurship tracks. Today, they all do, because the market demanded it.
Now, the demand is for leaders with internal compasses strong enough to guide companies through complexity and crises. Higher education and corporations can offer key solutions to filling the gaps in confidence of their workforce and the trust of society.
We believe the McGowan Fellows model offers a way forward: experiential, values-driven, accountable leadership development.
The business world has no shortage of intelligence or ambition. What it needs, now more than ever ‒ and what the next generation must supply ‒ is courage rooted in ethics.
Gordon McLaughlin is an experienced investor and operator with two decades of experience spanning a wide range of operating businesses and real estate assets. He is a cofounder of Element8 Partners. Frank Sasso is the cofounder of Element8 Partners, a value-oriented real estate investment firm with offices in New York, Columbus, Ohio, and Charlotte, North Carolina.
