Marc Le Menestrel

The Wise Power of Utopian Thinking

Marc Le Menestrel — 2019-05-10T01:57:00Z

Imagining an ideal world is a powerful tool for enhancing proactivity and leading organisational transformation.

Today's shifting global dynamics have increased the pressure to navigate into the new and the unknown. Alas, afraid of how the world is evolving; eager to keep for ourselves what we have; willing to preserve the certainties that we have built in our heads; enticed by a new philosophy where we are supposed to maximise happiness — we continue to resist and reject change. Why embrace the future if it is this painful? Why become aware that our world is collapsing?

To avoid a growing sense of helplessness and despair, we then run faster towards that light at the end of the tunnel. Instead of embracing the unknown, we become even more blinded by what we think we know.

Companies only learn agility in order to increase productivity, grow their revenues and make more profit. Governments engage in stakeholder consultations but their conclusions, coincidentally, always happen to confirm the initial intentions of those in power. People are concerned about plastic in our oceans but they ignore why this issue has become so salient. We change in order to remain the same and this is not good enough to meet today's challenges.

As Einstein wrote in 1946, “A new type of thinking is essential if mankind is to survive and move toward higher levels.”

Utopian rationality

Business rationality is at the core of how leaders think. Yet, it has to evolve. In my teaching, I invite executives and directors to become smarter than rational. I do not propose to throw out rationality. Rather, I want to overcome a rationality that imposes itself upon a complex reality in a totalitarian fashion.

To identify a goal, choose the best action to reach it, then measure the consequences and finally claim success once the task is done is not smart enough. In a world full of surprises, we need to dream beyond our goals if they are to have meaning. A sense of purpose is essential for long-term value creation, as the dream that drives our goals will ensure the relevance of work beyond the next quarter or business cycle. We also need to realise that we may not attain our goals, and that can be an opportunity because they may need to be changed. We should never be prisoners of our goals. In a world ready to be deeply disrupted, we need to love what we do right now. Anchored in our values, we can appreciate where we are at present and have our eyes fully open. Instead of serving a system that is at risk of destroying our humanity, we should make sure to put the framework of rationality to the service of our values and dreams.

The ability to dream our future world into being can help us survive. It is also a powerful strategic exercise. At INSEAD, my experience is that the building of a utopia allows executives and directors to free their minds from confining intellectual prejudices. The method draws from the three core principles of Wise Power: duality of mind, emotional maturity and generosity of soul. It is a way of thinking, feeling and dreaming that enhances our ability to meet the world half-way. It is especially useful for important and difficult decisions. Wise power consists of the ability to face surprising, even unpleasant truths bravely and honestly, although they may directly contradict our firmly held beliefs and preferences. Wise leaders are much less susceptible to the fear of the unknown that underlies defensiveness, because they perceive the deeper dynamics of the landscape around them. Instead of being fixated on the light at the end of the tunnel, they learn to pause and see that the tunnel is in fact made of beautiful trees, each of which is also a door to another space where they can discover, learn or just be.

How to generate a utopia?

Now more than ever, strategic business decisions must be taken in light of other realms of power. It is thus essential that utopias encompass the political, social, technological and natural spheres, as well as business. This allows leaders to embrace the growing expectations of multiple stakeholders across myriad issues.

Complex, ambiguous grey zones have a perfect right to exist in these utopias. For example, you do not have to choose between business having freedom to operate, and governments possessing scope to regulate – you can have both.

As participants present their utopias in class, it is liberating for them to express these contradictions. Executives are typically constrained in a discourse where business interests dictate everything. However, they are also citizens eager to exist more fully and freely at work. As they share their utopias and listen to others', they become conscious of common predominant themes: a form of social equality, a government that cares for the common good, technology at the service of humans and not the other way around, and harmony with nature, among others. These commonalities transform what might have seemed an exercise in fanciful idealism into something highly relevant to the everyday exercise of executive power. The unthinkable suddenly becomes almost feasible. The lines between utopianism and executives' habitual “realism” begin to blur.

Why utopia?

Peel back the layers of realism, and you will often find cynicism and pessimism feeding fear a steady diet of rationalisation, e.g. the world is so corrupt, boldly engaging with it is useless. Some cynicism and pessimism can also be valuable. Life is not black and white — and we also need to tame some messianic tendencies that bring us back to the authoritarian form of leadership that we want to transform.

Utopian thinking enables us to perceive the big picture, including the things that upset or even repel us, in a usefully optimistic light, in terms of what could be. It gives us the courage and confidence to see the distance between reality and our dreams as a space of opportunity rather than ipso facto defeat.

Applications of utopia

Utopian thinking can be open-ended, but it can also be tailored to address specific business problems. I have used it to find solutions for a multinational energy company facing a disastrous situation. The company was heavily criticised in the media for its role in the environmental devastation and worsening quality of life of local communities. In response to being painted as villains in the press, executives had adopted a stance of denial of their responsibility. Their relationships with community leaders and government officials were at an impasse.

By inviting participants to conceive of the best resolution imaginable for such conflicts, we foster within them an appetite for the unknown. They start envisioning ways to use their companies' wealth and power for mutual value creation, together with locals on the ground. Most importantly, they become more aware of the pitfalls of a confrontational non-market strategy. Instead of maintaining the belief that they can save the world if they become a force for good (another way to remain in the ego-driven authoritarian form of leadership), companies can cultivate a global vision in which they interact with other forms of power in a more respectful and harmonious manner.

Imagining utopias can also be useful for established organisations in the midst of market flux. For instance, a session on utopian thinking applied to the future of mobility allowed executives of a car manufacturer to better appreciate the multiple facets and layers of their situation. Rather than being constrained by the established discourse and culture of their company, they could engage at different levels and discuss the deeper changes driving the shifts in their industry. They were developing a sense of where they stood within this larger ecosystem and could find new levers to shape their culture and their identity. Instead of nurturing fear and helplessness, their uncertain future provided meaning.

Developing utopia

You do not need to wait for other people to apply utopian thinking. You can start yourself as an individual. Just think of a high-level challenge facing your organisation, industry, or even the nation or region in which you do business. Then apply your imagination to the problem, working through the different perspectives of the relevant stakeholders. Do not fear contradictions and allow space for the commonalities of good intentions and diversity of values. As a transformation of your own mind-set, the exercise will teach you to fear less and embrace more. You can scale up the benefit by involving your team – sharing your ideas with them and adding their contributions until a collective utopia emerges. This dream will help you select your objectives and identify the key stakeholders that can help you. It will also change your attitude to the world. Less afraid to envision change, you will look for opportunities to contribute to a better world beyond strict business objectives.

Marc Le Menestrel is Visiting Professor for Corporate Governance and Sustainability at INSEAD.

I thank Benjamin Kessler, editor at INSEAD Knowledge, whom I met when I arrived in Singapore. It has been the start of a productive and pleasant collaboration, writing short pieces for this online outlet.

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The 3 Principles of Wise Power

Marc Le Menestrel — 2018-09-27T01:48:00Z

If you know how to harness the power of your mind, heart and soul, you will be wiser in the face of surprises and disruption.

One of today's damaging and common leadership misconceptions is the confusion of power with external control. All too often, we think of power as the ability to direct or influence the behaviour of others, or to force the course of events to conform to a predetermined scheme.

But there is an equally necessary kind of power, which is exerted inwardly. It turns out that power is as much about the ability to adapt to the world around us as it is about shaping the world. As the global business landscape becomes increasingly complex, our ability to develop our presence and gravitas has become an indispensable companion of authority.

A harmonious balance of inward- and outward-directed power is what I call wise power. It is the embrace of dualities that helps us meet the world halfway: in between what we want and what is offered to us. Beyond the illusion of full control, wise power is an art of surprise.

So what is wise power? Fundamentally, it is the ability to master the deeper dynamics – not just the surface phenomena – affecting the world, an organisation, a team, an individual, a conscience. Leaders developing their wise power train their attention towards the underlying forces shaping their environment and themselves. They are not as easily blindsided by threats or challenges. As their thinking is not beholden to entrenched prejudices and patterns of behaviour, they can devise more effective and more meaningful solutions.

The first step towards cultivating wise power is to loosen our mental and emotional grip on the tools that enabled our success thus far: our knowledge, experience, skills, philosophy, etc. These dependable tools can still be retained – actually, they are part of us and could not be discarded anyway – but we must be prepared at any time to stow them and grab hold of the new. Especially for high-achieving leaders accustomed to emphasising the will, wise power requires letting go.

Three principles

Three principles in particular are key to developing the self-mastery that nurtures wise power.

First, a duality of mind that comprehends multiple sides of an issue, rather than being restricted to the side that conforms to our pre-existing vision of things. With wisdom of the mind we can go even further, overcoming the mind's natural tendency to create inflexible oppositions. We learn to see a world large enough to hold contradictions in tension without forcing resolution – i.e. a both/and instead of either/or mentality. By being conscious of the way we look at things, we also develop our ability to choose how to look at things.

Second, an emotional maturity that allows us to cope with distasteful things just as well as we naturally warm to other things. The world, after all, contains plenty on both sides. The tendency to shrink from things we dislike diminishes our sense of reality and, by extension, our cognitive agility. Emotional maturity develops our ability to know both our likes and dislikes and to recognise them as feelings that we project onto the world, not innate properties of things. We needn't abandon, nor even resist our natural judgements of goodness and badness. Instead, we need to be fully aware of them so that we can create some distance. Because we can feel without being controlled by our feelings, we learn to influence our emotions while we are influenced by them.

Third, a generosity of soul that feeds on dreams to inspire and motivate real action. When we are well connected with our fundamental dreams and aspirations, we are more susceptible to shift an unexpected turn of events into an opportunity. Instead of reacting to all the things that can make us fail to reach our goals, we learn when and how we must change our goals to succeed in life. Loosening our grip on transitory goals reduces fear of failure and discomfort with the unknown. Instead of being prisoners of our goals, we dream beyond them and learn to master the art of surprise that life can be.

The principles in practice

Let's take a practical example. How could we apply the principles of wise power to a business problem involving, say, technological innovation? First, the cognitive agility that comes with duality of mind allows us to better understand why innovation could be both a blessing and a curse. Indeed, innovation is a major source of competitive advantage for business, yet it can also pose a risk for the environment or for society, locking us into technological choices that are in fact detrimental over the long term.

Moreover, new technologies can often be frightening, as they carry the threat of our own obsolescence. Emotional maturity helps us recognise that the fear of technology has good sides, e.g. sensitivity to early warning signals, consistency of identity, healthy scepticism toward fads, etc. By accepting these emotions, we can avoid becoming the prisoners of innovation. Facing our fears thus feeds the process of cultivating wise prudence.

So what is the purpose of technology? What is the dream beyond innovation? These questions are of crucial importance. As leaders, our ability to answer them with a vision is a powerful asset for organisations. It creates motivation and develops passion for the future. It attracts and retains talent. The power of a dream helps us find a genuine purpose and a meaning in technology. It guides our technological innovation towards a better world rather than making innovation an end in itself.

A wiser approach to crisis management

Wise power also helps in managing potential ethical crises. In the face of a serious accusation of organisational wrongdoing (e.g. corruption or illicit business practice), the first principle – duality of mind – compels curiosity. Rather than immediately dismissing the accusation as inconsistent with what we know of the organisation, we need to seek out all available information. Instead of resorting to reflexive denial, wise leaders may ask the company's accuser, “Oh, if you know something that I don't, tell me everything. I may not be fully aware.”

The second principle – emotional maturity – encourages compassion. Instead of reacting in outrage, we might say to the accuser, “What you tell me makes me feel very bad. I want to do something about it.” Acknowledging and making space for the emotion not only establishes common ground, but it also builds credibility. This breaks the feedback loop of violence (verbal or otherwise) that can make a bad situation even worse.

The third principle – generosity of soul – points the way forward. As wiser leaders, we train ourselves to give substance to responses such as, “What we ultimately want is for the company to be useful to society.” If the accusation proves to be true, action can be taken to bring the organisation's culture and conduct back in line with its original ideal. The crisis can become an opportunity to return the purpose of the business to its rightful place at the very core of organisational activity. The organisation is likely to emerge from the firestorm both stronger than before and with a renewed sense of purpose.

With wise power, we care for end results while learning to forge our own path, aligned with what is most important to us and with a vision and purpose beyond the immediate goal.

Marc Le Menestrel is Visiting Professor for Corporate Governance and Sustainability at INSEAD.

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Can we prevent Policy Capture? Reflections about Public Interest in Business Decision-Making

Marc Le Menestrel — 2017-04-04T10:42:38Z

On March 30-31, I was invited to the OECD Global Anti-Corruption & Integrity Forum in Paris. I had prepared the following short piece to reflect on the theme of our panel: Policy Capture. Thanks to the wonderful colleagues at the panel and the moderator, the conversation took an unexpected turn, promoting intellectual honesty and emotional maturity. I was thrilled to feel the audience, during and after the panel, engaged in tackling these difficult subjects in a smart way, from the heart and inspired.

To benefit public interest while pursuing business interest is one of the greatest challenges of business decision-makers. For business actors, aligning the private and the public, the personal and the professional, the ethical and the profitable represent an ideal that all want to attain. For policy makers, sustaining such alignments and providing the conditions of their manifestation lie as at the source of their vocation. We as humans are all capable of thinking of ourselves and beyond ourselves, and our happiness is closely related with our capability to act both in our name and in the name of others.

And it is interesting to think that our ethical vulnerabilities, the mark of our experience around failing to combine our individual and collective motivations in an ideal way, are actually one of our core characteristics. Although everything lies in everything as a whole, we know that most of the time we are entrenched in one or the other of our motivations and sacrifice the other.

As human decision-makers, we must learn to live at the frontier of ourselves, the place where a line is drawn in the gray zone. Whenever
Our ability to think, to communicate and to act at the frontier of business and public interest may in fact be one of the most important skills to face our human future. In some circumstances, business interests indeed collide with policy making aimed at public interest. To some extent, these situations question the very idea of democracy and market economy promoted by the OECD.

Consider the following examples extracted from my recent research and assignments:

Whenever the demand for fossil fuels grow, their price tends to remain high, leading to sustainable profits for extracting companies. So from this point of view, public policies aimed at promoting demand for fossil fuels are of the industry interest. On the other hand, they are not in the interest of reducing the consumption of fossil fuels.

The Chief Scientist of a technology company receives early warning signals about the hazardous character of an advanced solution. He is having dinner with a former senior executives now working in the corresponding government agency. How could the regulatory dynamics be evoked?

As a policy to reduce the incidence of some particular health issue is publicly discussed, a pharmaceutical company that sells drugs treating affected patients ponders on its lobbying strategy: should this policy be delayed?

As a candidate for national elections advocates peace and partnership with a traditional enemy, the chairman of a defence contractor is reflecting on whether they should stop to finance the party of the candidate: is peace genuinely desirable to all?

These examples are typical of business ethical dilemmas where a business actor faces a decision that either favours his/her/its expected interest or the perceived general interest. Should one strictly apply the idea that the responsibility of business is to maximize profits, a decision against public interest would be prescribed. Business actors thus have the temptation to enter into “political activities” that influence policy makers against public interest (See our discussion with Julian Rode about Why Business fails to listen to Early Warning Signals about technological hazards).

In my experience of the classroom, it is undeniable that business actors are tempted to engage in actions that capture public interest. And of course they sometimes do it. It is also interesting to note that they don't like it and are capable of perceiving the ethical issues that lie behind.

Lobbying, revolving doors, political party financing, and more structurally market commoditization of violence or of drugs or confidentiality of technological innovation are certainly not only good, they also have a dark side. The difficulty to speak about these dilemmas openly is a mere proof of the emotional difficulty that we face in admitting our guilt, our shame or our fear in the ultimate consequences of such practices.

In my experience, it is close to be a systematic opinion among business executives that the current dynamics is unsustainable. There is an obvious truth in the consideration that incentives can orient business behaviours against public interest. As a result, another temptation appears, and in particular among policy makers, which is to condemn these behaviours and their actors as “corrupted”. Corruption becomes the “evil” that ruins the world and we should fight against corruption as a priority. We constitute two categories: good and bad actors and we divide ourselves once again, “us” in the good category, “them” in the bad.

If, as advocated in the OECD introduction to the issue of policy capture, citizens reject the current system that does not serve them, politicians must be corrupted for the system to sustain. There would be therefore no genuine fight against corruption without questioning the system. Moreover, not questioning the system would be a signal that no genuine effort against corruption is truly implemented. We would be once again in a game of words and the anti-corruption discourse takes the risk of a cynical and hypocritical intention.

To which extent OECD questions the system in which it plays a role? And if we take OECD core values as a concrete translation of what “system” means, the question therefore is:

Does OECD question, for instance, the search of economic growth as a political priority? Representative democracy as a political system? Or the extension of market capitalism?

These values are in fact at the core of an ideology that is not perfect and should not be advocated as such. Opening a constructive communicational space to discuss the frontier of these ideas is a must for tackling the issue of policy capture in a credible way.

Market capitalism has ensured the institutionalisation of an economic licence to operate for companies. However, democratic structures are attaining their limits at managing their political licence to operate. One may find the reasons for this in the transnational nature of the economic and financial power of business actors, a power that outmatches the national sovereignty of western democracies. Also, the aggregation of specific business interest creates suboptimal collective outcomes that threaten the welfare of the citizens as well as the ability of human societies to live in their natural environment.

If the distinction between business interest and public interest is not new, the current global situation calls for a new way of drawing the line in these grey zones. As a professor of Decision Making, teaching to business decisions makers and from time to time to policy-makers, I have been advocating and developing tools and methods to tackle business ethical dilemmas like to ones evoked above. It is with precaution that I share three skills that emerge from this experience:

Principle 1: Shadow and Light

Each decision-maker can train his/her/its ability to see the shadows casted by his/her/its own interest and hidden by his own moral justifications. One should be able to understand why one's own interest is in itself problematic and does not only include desirable features. There is a need for a systematic analysis of the ethical dimension of business actions. And it is interesting to note that such an analysis requires suspending our judgement so as not to analyze only what supports it, which should be seen as a prejudice. The courage to face one's own shadows helps to draw the line with less violence, towards others and also towards oneself. It also reduces bad faith argumentations where supposedly win-win approaches are mainly the result of impression management and cover up more important issues.

Principle 2: Dilemmas and Win-Win

Each decision-maker can develop his agility in navigating to see both sides of the frontier separating different interests. Of course, one should be able to understand the interest from one's point of view and from the others' point of view. It is then possible to formulate more precisely the dilemmas and the conflicts of interests, which are somehow always present. It is indeed interesting to note that not all win-win are genuine. As it is always possible to do better from the moral point of view, there is always somewhere a line to be drawn. Whether this is done in full conscience and in the respect of the sacrifices that it entails is a major skill to work out. And when, making the difficult choice of what is good for all, we end up discovering good surprises that are also in our private interest, thse win-win are a most formidable reward.

Principle 3: Collective Dream

Decision-makers benefit from being invited to formulate an ideal solution. The power of dreams allows us to think beyond specific objectives. We should not limit our vision of the future and our conversations to what we think we can do. In fact, we need to create the conditions for emerging solutions to surprise us for the better and this is mostly happening in appropriate collective communicational settings.

Today, and especially in developed countries, it is my impression that the context favours business interest more than public interest in critical issues. This is detrimental to the harmonious development of societies. I thus concur with the intention to preserve public interest from business decision making. In line with the principle above, I am however reluctant to promote any confrontational way. The situation requires us to move to the next level and bring these dilemmas as the main subject of discussion. In this spirit, I suggest three directions for considerations:

Business actors, be them companies, associations, lobbyists, individuals, should be invited to take positions in front of these dilemmas. As these positions affect the public interest, they should be public. As they affect their business interest, they should be included in their reporting. This should promote proactive business behaviours and create advantages for those who consider public actors their allies. It should be respectful of the immense difficulty for some actors to take a position.

Policies as normative and prescriptive solutions may prevent our ability to invent new ways to combine business decisions and policy-making by trapping us in advocacy. We should learn to express without violence or judgement the main dilemmas that business decision-makers face at the frontier of business and public interest. Formulating and releasing to the public space such dilemmas in an objective manner, for example industry by industry will increase our capabilities to face the challenge our societies face.

Business and policy-makers should gather in forums to build ideal solutions to the tensions inherent to the combination of national democracy and transnational market capitalism in the age of globalization. Beyond the market, there is a need for spaces where digital capabilities allow participative approaches to complement political representation. That would also help to harness the growing demand of citizens for a harmonious development, beyond profit maximization of companies and national economic growth.

Angola: Searching for a new Spirit by Looking at the bright side

Marc Le Menestrel — 2016-12-08T04:44:18Z

December 2nd, 2016 was a historical day for Angola. Not because I was invited to speak at a conference on Corporate Governance in Luanda but because this is the day President dos Santos decided not to present himself to the coming elections. After nearly 40 years with him, Angola is in search of a new Spirit. I looked at it from the bright side.

And this is not necessarily easy. As Angola was to access independence from the Portuguese at the end of one of the most sombre European dictatorship of the 20th century, Angola was also discovered to be the bed of a great amount of oil. Under sea, yes; expansive to extract, yes; but of excellent quality. And as Angola is nowadays the largest oil producer of oil in Africa, it has also been the victim of the fall of oil prices in the last years. To be sincere, it has somehow been the victim of oil since its discovery: the famous Dutch disease or Oil Curse that characterized countries which rely too much on the sole wealth of oil to drive their development. But I said I was looking at the bright side. So the question is: how oil can help to nurture a new bright spirit for Angola? I witnessed the strong belief that it should not be through violence. Everyone wants to forget the bloody civil war and build on the stability which followed by the victory of future ex-President, his army and his party. I sincerely hope that the days ahead will allow the national forces to hold the ground and protect the country. With slightly rising oil prices, and a global momentum to move away from a carbon-based economy, there is a great chance to have the right amount of added value from oil to support a diversification. It was especially interesting to learn at the conference how people there dream of self-sufficiency in basic sectors such as agriculture, textile or raw material for construction. In Angola, globalization may not preclude autonomy.

A second most important question was also very much related to the global dynamics of the time: under which conditions banks can help finance this transition? If the dedication of Angola banks seemed sincere and competent, the question arises from correspondent banks that can ensure the connection of Angola's economy with the rest of the financial world. In our discussions, the power of the mighty dollar system was very much felt: as the given currency for oil of course (oil represents 95% of exports), but also through the norms pertaining to transactions and governance. Angola is asked (forced?) to adopt the accounting standards of the United States. And it is interesting to note that such exercise of power uses ethics and anti-corruption efforts as a means. Sensitive to this dynamics, and to the emotions felt by a country so proud of its political independences after a long-fought battle, it is not obvious to find a bright way out. There is however no other solution than taking the best of all systems. As Deng Xiaoping said (around the time Dos Santos came into power!), capitalism and communism are two ways to serve the welfare of the people. There is no need to oppose ideologies and there are many smart ways to combine them in order to avoid the worse of each. Angola may fiercely come to terms with practices that now belong to the past and it may do so without selling its soul.

To this end, the obvious bright side of Angola is the proud richness of its people and of its grounds -be it off shore or for agriculture. We dreamed of them leap-frogging to a green and circular economy that uses wisely the new conscience of our unsustainability. Besides the wise men who founded the economic successes of the country over the past 15 years, it was wonderful to meet a new generation of Angola people proud of their roots and farseeing in their visions. The unity provided by Portuguese as a language spoken all over the country is certainly a resource. Moreover, it seems that Portuguese themselves, who were very present at the conference, and expatriates in general, are grateful for the wealth Angola provide to their business or to their home country. In the difficult circumstances of the time, there is an obligation and an opportunity for a win-win post-colonial relation, based on a sense of care for the country itself and for its promises. The question is thus whether these Angola leaders will dare to invent their future on their own terms under the pressure of external conditions, be them coming from other nations or from nature itself.

This is in this context that I deliver my speech on governance as the wise use of power. Treating the global level as well as the corporate and the personal levels, I proposed three principles for the wise use of power.

Firstly, a principle for the mind that I termed duality. As the mind naturally thinks in classes and value-judgement, I invited participants to make the effort to think contrarily to their natural categories and to their prejudices. As Hermann Hesse wrote in Siddharta, “the contrary to any truth can be as true as the truth itself”. It is thus necessary to suspend judgments and apply critical thinking to our natural thoughts, beliefs and methods.

Secondly, a principle for the heart that is certainly called love. The mind can be treacherous to motivate us and there is nothing better than doing what we love to do it sustainably and with courage. Moreover, being able to accept our vulnerabilities helps to have the emotional maturity to thing broadly and creatively.

Thirdly, a principle for the soul that I called dreams. In a time of disruptive uncertainty, dreams can be like a light house in the storm. We do not necessarily head straight towards them, not even reach them exactly, but they offer an irreplaceable sense of guidance for our vision. Dreams help to avoid the many traps that direct routes hide below the surface.

It is with a sense of achievement that INSEAD organizers concluded the conference. There is a genuine opportunity for such events which allow conversations to take place beyond polemics and prejudices. An academic approach combined with a strong sense of relations in the respect of diversity, all with a superb organization, offer a bowl of fresh air in today's difficulties. In such conferences, the brilliance of INSEAD alumni prove that INSEAD is a business school for the world and it was indeed my privilege to be part of it. I wish Angola, its people and its Alumni to find a bright new spirit for the days ahead.

Reflections on Governance and the Africa Directors Program: at the forefront of responsible board practice?

Marc Le Menestrel — 2016-02-28T10:28:02Z

I wrote this short piece as a Reflection Paper for the Newsletter of the INSEAD Corporate Governance Initiative. It illustrates my commitment towards the transformation of business governance and the profound impact that South Africa has on my reflections about who I am: descending from African ancestors and man of white skin.

When INSEAD Corporate Governance Initiative accepted the invitation of the University of Stellenbosch Business School and their Executive Education branch USB-ED to partner in the offering of the Africa Directors Programme, I was especially interested in the programme's intention to bring ethics at the centre of the governance discussion and practice.

Crises of many types are currently raising new challenges for business organizations. In a context where capitalism is being questioned in its foundations, improved governance has emerged as one response and a critical issue for the credibility of the whole system. A new paradigm is emerging where business and boards have a new and more active role to play, where responsibility and power are two keys going together. This includes a shift towards a stakeholder view of boards, away from the previous shareholder view which is now recognized as having imposed too many negative externalities on other stakeholders (employees, bondholders, communities, governments and the environment).

South Africa at the leading edge of governance for social transformation

In this respect, it is remarkable that South Africa plays a leading role in the current discussion about corporate governance. As part of the post-apartheid transition led by Nelson Mandela's arrival to political power, a committee on corporate governance was constituted in 1993. Chaired by retired Supreme Court of South Africa judge Mervyn E. King, the “King Committee on Corporate Governance” has produced a series of reports over the last 20 years - the “King Reports”- that apply to all listed companies in South Africa.

It is important to understand that the political changes of the post-apartheid South Africa is one more instance of what is a profound transition, one that goes much deeper than the already complex change of political and economic dominance from white to black ownership. As program co-director Arnold Smit taught me, the King Commission was about designing a corporate governance framework that would be able to mirror the values of a progressive constitution, one that would match the new democratic dispensation and one that should guide the rebalancing of South Africa's economic and business landscape to make it fairer and more inclusive for all the country's citizens. As it faces this challenge, South Africa is an important point of focus and even a source of inspiration for the wider transformation of our societies.

Leadership, sustainability and good corporate governance citizenship are at the core of this new vision for governance. The King committee has brought South Africa at the leading edge of the discussion about corporate governance, heralding a different approach, for example, than that which Sarbanes and Oxley have advocated for the U.S.. The latter does not question the supremacy of shareholders, and has instead focused on a greater ability of detecting responsibility for value destruction and in particular fraud. This is mainly because SOX came as a legislative response to the big fraud cases of the 90's and early 2000's (WorldCom, Enron, Tyco …).

The South African approach has to be applauded and has indeed been recognized. It certainly has increased the perception of a greater effectiveness of South African boards. For instance, South Africa ranked #3 in board efficacy according to the Davos World Forum Global Competitiveness ranking.

In this program for African Directors, we are of course guided by the King Reports, which are an inspiration to identify and discuss key principles that could be implemented all over the African continent, a context that offers a broad range of worldviews and business systems. Especially, we allow stakeholders to take a prominent position when conceptualizing the role of corporations. It is held explicitly that business organizations shall be governed in a sustainable manner and for the benefit of society as a whole. This view goes well beyond the primacy of shareholders model and brings new perspectives to the governance conversation. It acknowledges the un-sustainability of the shareholder view and considers that, for business to exist in the future, it has to pay greater attention to human values, ethics, social justice and environmental sustainability. This rejoins the idea that greater performance arises when looking not narrowly at profitability, but also considering social and environmental impacts like in the “Profit, People, Planet” framework. In a sense, this program is one of the first in the world that is strongly built on such a transformative paradigm.

Developing a Capacity for Directors to Use Power Responsibly

In terms of pedagogical intention, the program aims at building capacity of directors for the contribution of business governance towards societal transformation. When we go to the details, it is crucial to realize that, ultimately, governance is very much about the responsible and irresponsible use of power. Thus, building capacity in governance is about developing effective uses of power that contribute to effective corporate transformation, and ultimately beneficial societal transformation. The creation of business value is not an end in itself but a means towards a greater end: the transition to a more cohesive, just and sustainable society. Business rationality is reversed: society is not used as a means to profits but profits are a means to a greater purpose which is to benefit society in the respect of environmental impacts.

Responsible uses of power give meaning to power and the program intends to give meaning to the power of boards. Rather than top down lectures, this is achieved through facilitated conversations: conversations amongst business, political and social actors, conversations across business actors, conversations at board level with employees and stakeholders, conversations preparing these boards which ultimately require deep conversations amongst board members and finally conversations within each board member. In this program, we enter into conversations that give meaning to the use of power in business governance and that prepare board members for the responsible use of power for the benefit of corporations and their positive impact on “people and planet.”

As the world is undertaking a profound transformation on its own sustainability, it is critical that business governance develops a language that allows conversations about the use of board power and its impact on profits, but also people and planet. As a result, this program is unique in its ambition to discuss the broad extent of the power of corporations on their environment.

As an outcome of the program, participants become empowered to give new meaning to their contribution to the boards they chair or sit in. For instance, they find new ways to empower their boards to tackle issues of risks – where excessive risks often lead to fraud and then corruption. Resisting the temptation of excessive or unwarranted risk, and then fraud, and ultimately corruption is thus a novel manner to preserve the value creation of an organization. As my mentor Ludo Van Der Heyden puts it, value preservation more than value creation is the most important responsibility of boards. It is also an opportunity to enter into a new meaning for the role of board members, and through them, of business in society. It is an opportunity that promotes strategies that are based on sustainability and justice. By proposing a language that overcomes the narrow mindset of shareholders profit maximization, we open a space that gives business a greater purpose and a more positive contribution to society and its ongoing and necessary transformation.

Enlightened Power and Ethical Shadows

Going deeper into the theoretical realm, the articulation of governance has been traditionally approached either about interests (how to further the interest of a particular actor, how to coordinate interest of different actors), either about ethics (how to constrain interest by ethical principles, norms and rules). The reality is richer and more complex because it must articulate both.
Governance is about the smart articulation of both interests and ethics. A fundamental principle of this articulation of a bias that characterizes us all: each of us are very good to perceive, think and communicate about the ethical side of our own interests and, conversely, to see and communicate the unethical sides of the interest and actions of the other actors. There is generally very little awareness of our own shadows, while there remains a very strong bias against those who may judge us or infringe our particular interests. This bias creates a sort of tiny corridor where one thinks about ethics, focusing only on one's own interest like the light at the end of the corridor. A main objective of the program is to empower participants to be free from that sort of ethical bias, if not blindness, i.e. to bring light to our own ethical shadows. That is the challenge that needs to be overcome to allow for deeper societal and thus ethical discussions at board level.

The word ethics has been used a lot, so much so that in many quarters it leads to dubious or even cynical reactions. We indeed believe that it should be understood in the presence of another notion: enlightened power. Through the use of carefully designed and facilitated processes, such as a cognitive, emotional and shall we dare say a spiritual awareness of our and our corporation's negative and harmful shadows, we can liberate that enlightened power from having dared to bring new light to our shadows. In the program, the harnessing of directors' enlightened power increases capacity of participants 1) to be free to think strategically about a wider range of opportunities for action and vision, 2) to be emotionally more mature to fully hear and understand the hidden risks of strategies that oppose legitimate interests, so as to combine them better in resolutions that are more satisfactory to stakeholders 3) to enter into board dynamics that leverage the grey zones of interests and ethics in an inspirational manner.
As a result, and as a final comment, this program is not just about governance for social transformation. It also becomes an opportunity for personal transformation. A transformation that equips us with a way to talk about some of the most pressing issues that capitalism face today in Africa and beyond, one that gives us the language to find meaning in our professional life and experiences as a director so as to truly become actors building and contributing to a better world.

As directors become leaders of their organizations, and even enlightened leaders, they integrate the changes and new mindsets their corporations need to acquire by anticipating, integrating, living and being the change before leading, inspiring, supervising it on the others, and particularly on the corporation. Isn't this leading a responsible and new view of the board?

Marc Le Menestrel
Co-Director of the African Director program

The Ethics Challenge: Finding the courage

Marc Le Menestrel — 2015-03-25T02:18:00Z

What sort of courage does ethics require? The search for intellectual honesty faces many emotional barriers that prevent us from seing the truth: we are not as ethical as we like to think.

This easy piece published in a semi-academic journal shares my teaching about ethics, in particular to Directors during classes in Governance. I was glad to benefit from the edits of Ludo van der Heyden and the Editor.

The question that I wish to address here is going to the heart of ethics. The subject has been much debated over the last decades, yet a sceptic could rightfully argue that all the talk has delivered insufficient results in terms of change in business behaviour.

One of the main reasons for which ethics has not delivered may be that most of the effort has been directed at pointing to the lack of ethics in others. These others include employees, managers, CEOs and
senior executives, boards, shareholders,regulators, governments and other stakeholders. Having designed various strategies for “these others” to behave more ethically, we end up lamenting that, alas, our strategies fail miserably. We come back to a state of powerlessness, evoking human nature as the ultimate
culprit.

One of the main reasons for which ethics has not delivered may be that most of the effort has been directed at pointing to the lack of ethics in others. These others include employees, managers, CEOs and senior executives, boards, shareholders, regulators, governments and other stakeholders. Having designed various strategies for “these others” to behave more ethically, we end up lamenting that, alas, our strategies fail miserably. We come back to a state of powerlessness, evoking human nature as the ultimate culprit.

Ethical training should be seen as an investment that invites this courage, and sheds a new light on the – previously unsuspected – risks that we actually face. This training is unavoidable and quite different than any “compliance” training. Such investment may then lead to a wonderful “windfall”: it frees the mind, the body and soul, and prepares the individual, and his or her organisation, for unsuspected future benefits.

The hard climb to building ethical conscience

Participants in seminars I facilitate are regularly overcome with emotions when sharing personal experiences of corruption, intimidation or coercion. Often, strong ethical judgments cloud their mind and stress their heart. Many claim to be relieved to find a space where they can openly discuss the direct or indirect subversion of the democratic sphere, using powerful influential practices or lobbying organizations. Indeed, how many boards and executive committees honestly face up to the contribution business is making to the current destruction of our natural ecosystem – in nature or in our society?

Seeing the full spectrum of ethical and unethical behaviours requires an emotional effort that must not be underestimated. In a very human need of self-preservation, we typically avert or abort thinking about unethical topics precisely because of the deeply unsettling emotions they evoke. This occurs both consciously and unconsciously. As a result of these psychological processes, our thinking is constrained in a tiny corridor bounded by frightening shadows. In an attempt to fight our discomfort, we sometimes desperately focus on the positive aspects of ourselves or on the light at the end of the tunnel, becoming entrenched in a perspective that is blind to the biggest risks we actually face.

The courage that we need shall be found both in the mind and in the heart. The mind must learn to let go of the sometimes obsessive need of a positive self-image and a desperate pursuit of our goals. The heart must learn to love others, as well as ourselves, even in the shadows.

The Restraining Boundaries of Self-Rationalisation

Let us consider corruption: one of the most daunting challenges we face today. From Washington to Paris or Shanghai, I have been engaging with young and senior executives in various industries about corruption for more than 15 years. The quasi totality of the participants I taught would describe themselves as ethical managers, working for ethical organizations. Of course, they all say they would not be corrupted, or corrupt themselves. Yet, my learning process was to reveal – through role plays in ambiguous and difficult situations involving both time, competitive and hierarchical pressures – that, in one way or another, a large majority of them would indeed end up corrupting. And when this is pointed out, in the immense majority of cases, and in particular when working in groups, participants would spend most of their effort, not seeking alternatives, but rationalizing why they cut corners, and why they had no choice but to do so.

I have identified three steps in which participants typically engage when challenged to explain their choices.

Firstly, they try to deny that they are actually corrupting.

Secondly, they justify why they have done it.

Thirdly, they externalize their responsibility to others, and blame them for their being put in such a situation.

These rationalization mechanisms prevent them from being individually, and collectively, more astute in the face of corruption. In some of the cases I teach, there is actually no good reason to corrupt, and people do it because they can't think differently. Most of the time with corruption, we just do it because we don't try hard enough not to do it.

A genuine effort to minimize corruption, in and by organizations, is leveraged by first identifying the way people think, talk and act to perpetuate corruption. This, in fact, is not helped by hastily pointing fingers and apportioning blame to various “rogue elements” or “bad apples”. Changing attitudes to corruption firstly requires understanding how it comes about. From there, one can discover that the drivers of corruption lie in an emotional inability to think wide enough.

Furthermore, in my experience, understanding our own unethical behaviour is a stronger driver for ethical change than preaching and reinforcing ethical behaviour. Compliance efforts help, of course, but they sometimes become a mere attempt to protect top management and feed their self-perception of righteousness: it becomes a self-deceptive practice. Worse, when compliance nurtures a belief that it guarantees ethical behaviour, it actually becomes a hindrance.

The false comfort of ethical blindness

As indicated earlier, we – us humans – avoid discomfort, physical or emotional. When avoiding a direct awareness and confrontation of the potentially unethical aspects of our business interests, we typically switch to a reactive mode. We still deliberate, but our cognition is trapped in various forms of denial, rationalization and externalization of our locus of control – in other words, apportioning responsibility to elements beyond our control – and feeling safe again. By constructing these individual and collective protections at the psychological and emotional levels, we also isolate ourselves from the source of future problems. We become like ostriches with our heads in the sand, seeking refuge from what seems too large a challenge. We are in this case preparing ourselves for bad surprises; we are actually sowing the seeds of real nightmares.

Firstly, and paradoxically, ethics requires suspending judgment. As a teacher, I spend a tremendous effort in my preparation working on my own prejudices towards the people and companies I address. A typical set-up for failure is when I appear to be judging them, projecting my own prejudiced shadows onto the participants or their organizations with the illusion that it serves some good. In reality, it only produces a reaction that reinforces the vicious circles in which we are all trapped: blaming the messenger of bad news to escape our shadows.

To the contrary, a solid and efficient way to proceed is to be non-judgmental, so that participants feel that they occupy a safe, intellectually honest and credible space for courageous and smart conversations to take place.

The Duality of Ethics and the “grey zone”

We prefer to think and talk about our ethics in a positive light. We easily provide arguments to explain how ethical we are. Most companies have success stories about how they contribute to environmental sustainability, advance social justice and promote human values.

However, for all of us who are neither saints nor devils, our ethics typically fall in a grey zone. It lies somewhere on a continuum between being “completely unethical” and being “fully ethical”. There is some good in most of our actions, as well as some bad. If most of our actions are therefore both ethical and unethical at the same time, it is profoundly different to look at the ethical aspects, as opposed to look at the unethical aspects. In my experience, companies whose behaviours raise the most daunting ethical issues, have developed the strongest blinding bias towards their own ethics. It is normal and profoundly human to move away from the disagreeable, to want not to see it, and rather prefer to dull ourselves in good conscience.

But there is more: we also are biased against others. In a typical business setting, we are biased in favour of the ethical side of our own actions, while focusing on the unethical side of others' actions, especially if they are those of our competitors. In general, our ability to think about both sides of the ethical judgment is significantly influenced by our emotions, our interests, our mental habits and self-image, our cultural context, our work environment, and, finally, our power to act. An aspect of ethical training is thus to learn to see both the good, and the bad, of any situation or action. For instance, consider the following questions:

Is it ethical to close a profitable plant?

Is it ethical to compromise on the safety of a product?

Is it ethical to influence a government?

It is likely that you will naturally answer yes or no to these questions. Yet, there are substantial and compelling arguments to answer both yes and no. Thus, observe your own bias and observe your own (in)ability to overcome it. Sometimes, it needs others to show us the other side of our own thought, and then it becomes obvious. Training this ability to explore our own ethical perspective requires discomfort and effort.

Considering that an action has both an ethical and an unethical side does not preclude the comparison between actions, i.e. judging that an action is more ethical than another. On the continuum, some actions lie closer to “fully ethical” or “completely unethical” than others. It is not because we must reject an absolute and categorical synthetic judgment about the ethics of a particular situation that all becomes relative.

Interestingly, this duality is useful to decode discourses, and to perceive the implicit preferences and objectives that lie behind them. In a series of work about the way the oil industry was influencing the science and politics of climate change, it became very clear to my colleagues and I, that the ethical aspects of actions that were profitable to the industry were emphasized, while unethical aspects highlighted.

Drawing a line in the grey zone

For our own actions, analysing both sides of the ethics equation is the only way for us to consciously choose our ethical opinion.

With effort and training we can develop our ability to look consciously at both the ethical and unethical aspects of any action. As we have seen, this is emotionally difficult. It is also cognitively difficult, because the mind does not like the ambiguity of grey zones, and even less the frontiers of the grey zone, preferring to seek the simplicity of black and white assertions. Often over-estimated for its ability to control emotions and decisions, the mind prefers to categorize each action as either ethical or unethical. Accepting that both are true is a challenge for our logical thinking and it is particularly easy to dismiss it as pure relativism: everything then goes.

The truth is that separating grey situations into two categories, in an attempt to draw a frontier between what is unacceptable and what is acceptable in a particular situation, is essentially subjective. But it is not because each one of us may draw our ethical lines at a different point of the grey divide that the extremes cannot be objectively defined. As far as both black and white exist in themselves, the good and the bad may be clearly defined concepts. It is when a particular instance of an action, situation or person is totally reduced to one of them that we create a problem. As Shakespeare reminds us, the good and the bad are not a property of things, but of a particular perspective we take on them.

One of the goals of ethical training is to clarify what is objective (agreed upon by all) and what is subjective (specific to each one) in ethical judgments. For the objective, it is impressive how we can get absolute consensus on the negative and positive aspects of particular behaviours in a collective setting. If trust is present, all arguments for the good or for the bad can be made explicit, may be agreed upon and accepted. The plurality of experiences helps the uncovering of these multiple arguments. What remains subjective is whether, overall, these arguments should deem a particular action “ethical” or “unethical”. In reality, do we really need such a categorical opinion? And what does it mean? What does it mean to say that a particular grey is black or is white? Not a lot indeed. What we need is to consciously draw a line, to freely choose a frontier by saying something like “this is too bad for me to do it”.

For each one of us to consciously choose where we want to draw the line, we better be able to see both sides of the line. Having such a dual and systematic analysis increases ethical awareness at the individual and collective level and helps elaborate and improve conscious, free and powerful ethical judgment. It is a difficult process that requires us to separate the ethical analysis from the behaviour itself and to work outside of our comfort zone. Taking the pain to analyze systematically the good and the bad in our actions, doing so in contexts where a diversity of perspectives enrich the exercise, suspending our categorical judgments over people and actions, are the intellectual and emotional efforts we have to pay in order to generate alternatives that we can freely choose, instead of merely living in denial and providing excuses.

Uncovering Ethical Risks

The concept of Ethical Risk refers to unexpected negative consequences stemming from a lack of ethics of our actions. Because we tend to be unaware of the unethical aspects of the actions that we choose, especially when these actions are in our self-interest, we cannot anticipate the negative consequences emanating from them. Indeed, it is likely that the stakeholders concerned will respond in an adversarial manner by seeking to impose negative consequences on us. These can be legal and reputation costs in particular, but also breach of trust and revocation of license to operate. At the individual level, it is sometimes the whole meaning of professional life that becomes questioned, which then becomes a source of profound suffering. Because we tend to deny the unethical aspects of our actions, these negative consequences are unexpected and constitute bad surprises: these are ethical risks.

As I said, when confronted with the unethical side of our actions, we tend to react negatively, emphasizing the ethical aspects of our actions and denying their unethical aspects. For instance, because we have implemented a compliance program, we find the exposure of our unethical aspects unfair, and we trap ourselves in a reactive attitude. These attitudes further reduce the self-awareness of ethical risks and can progressively lead us to an increased propensity towards unethical action. This is the “slippery slope”.

Such reactive attitudes deal with ethical risks only superficially, because denial and justification are merely designed to appease our minds and are only effective for our own conscience. They also lead to increased secrecy and confidentiality surrounding unethical aspects of decisions taken, and consequences learnt. As a result, the whole organization becomes trapped in a culture of self-censorship and deception and eventually, we begin to believe in our own propaganda.

Who? Me?

For others, denial and justification tend to nurture the adversarial attitude of stakeholders that are alerted or harmed by our unethical actions. Offended by our lack of understanding, frustrated by our lack of attention for issues impacting them, disabused by what they perceive as a lack of good faith, they push us towards an ethical crisis. We then face escalated costs in order to mitigate unexpected negative consequences, which can be a good opportunity for PR companies, but not for us. In a series of crises that I have investigated with colleagues, this nightmarish slippery slope leading to boycotts, dismissals, violent events or even societal crisis, can be fatal. A key learning from it is that the cost of anticipating ethical risks would have been pocket money compared with the cost they actually bear on us when they crystalise.

A Paradigm of Ethical Rationality

In reaction to our unethical behaviours, we end up pointing to external influences, as if we had no other choice. In this manner, we reduce our own power to identify a profitable alternative course of action. We reduce our freedom to choose, and deny ourselves a choice. Indeed, without proper ethical analysis, a typical justification of an unethical action is that an alternative course of action would have been too costly.

Inclusive awareness of ethical and unethical aspects triggers a natural search for more ethical solutions.

Awareness of potential ethical costs increases the relative attractiveness of alternative, more ethical actions.

A rational analysis of the benefits of a more ethical alternative can avoid an exaggeration of its costs and benefits.

The re-framing of the situation, an adjustment of the terms of a new paradigm by which we measure success often allows the identification of new opportunities otherwise hidden to us.

Eventually, with some ethical effort, an alternative and more ethical action may be implemented and without much additional cost, even considered as a strategic investment. I have witnessed wonderful experiences of individuals, teams and organizations rejecting corrupt practices to discover a simpler process to promote their products and ensure the smoothness of their processes.

I recall in particular an executive who stood up in front of his boss to refuse indulging in a practice that was decidedly “too much”. As a result of his disobedience, the boss of his boss, a senior executive of the company, summoned him to his office where he explained that he refused to act against his own values. That was to be the long awaited call that the senior executive was unconsciously waiting for, and the beginning of a strategy with the executive committee to modify certain practices. The company eventually became a leader within its sector group to fight against corruption, and that senior executive later took executive positions worldwide. It was impressive how he was the only one to be able to raise these subjects in meetings, beyond emotion or guilt, opened views to both sides and intelligently, and powerfully pushed the frontier towards the better.

For him, like for others, avoidance of ethical risks opened the path to unexpectedly positive consequences. It transformed the individual, the team and the company by recovering their true identity, their meaningful purpose and unleashed again the pleasure of working and doing good business.

Ethical Training Reloaded

Proper training about ethics and ethical risks allows the identification, mitigation and transformation of ethical risks, at once improving organizational efficiency and developing organizational identity.

In my experience, ethical training shall always start at the individual level. However, it is particularly interesting to work with executive teams, so as to both share our ethical analysis and confront our different perspectives. Rather than looking for systematic alignment about where to draw the line, we first look for consensus on the extreme and establish a common understanding of the various shades of grey. We can then rely on the diversity of personalities and characters present to enrich the team's capabilities to face ethical situations. Again, rather than judging, it is first important to understand the full dynamics that has led to some ethical or unethical decisions, independently of whether such decisions have led to success or failure. Further, at the level of the company itself, dedicated programs whereby a significant proportion of top executives are trained, are especially useful for companies intent to forge a culture or develop new attitudes towards emerging or transforming markets.

Regarding identification, ethical training allows us to identify systematically the various unethical aspects of our actions, thus reducing the awareness bias, the tendency to stick with intuition and the “obvious” solution, and identifying ethical risks before they lead to bad surprises. At the individual, team or organizational levels, identification requires a safe space, a trusting environment and non-judgmental facilitation. This can be eased by a past crisis that has liberated a motivation to “do something about it”. Sometimes, different modalities and formalities are required so as to protect the company and so that individuals feel free to express themselves without fear of embarrassment or retribution.

Concerning mitigation, ethical training allows us to describe our behaviour more objectively and to anticipate the possible unravelling of ethical crisis. Simulations, case studies, sharing of personal and organizational issues are good supports for these stories to be told and for conversation to take place. The learning space shall allow participants to experience both their ethical and unethical behaviours so as to understand their attitudes at each side of the frontier. In terms of stakeholders, management are trained to recognize the legitimate part of stakeholders' reactions, communicate with more sincerity and engage with them, thereby preserving trust and alliances. Rather than behaving reactively, they learn to empathize and act proactively towards the mitigation of the unethical aspects of their actions.

With regards to transformation, ethical training enables us to spend at least as much time looking for opportunities. This intends to un-bias our tendency to justify the actions that we expect to maximize our interest, while being unaware of the unethical risks they bear. Decisions not to engage in more ethical actions become more salient, and the training allows participants to develop their power of discrimination.

It is this change at the individual level that makes the organization less vulnerable and more resistant to ethical crisis. Moreover, decisions to engage in more ethical actions do not follow a blind faith in favour of ethics. In this manner, ethical training develops resilience and fortitude: it turns ethical risks into opportunities by dedicating cognitive and organizational resources to creating good surprises.

It is a constant surprise to me to realize how much we are blind to our ethical shadows. Still, the individual and organizational courage to face the risks that these shadows entail quickly brings us to a change of ethical conscience and a natural transformation of our behaviour. There is no better driver of ethical behaviour than conscienciousness of our unethical behaviours.

The author wishes to express his gratitude to Ludo Van Der Heyden and Anthony Smith-Meyer for their editorial support in writing this article.

Marc Le Menestrel is Professor at the Department of Economics and Business of University Pompeu Fabra (Barcelona, Spain) and Visiting Professor of Ethics at the Social Innovation Center of INSEAD (Fontainebleau, France). He is a specialist of the role of ethical values in business decision-making and he has been teaching and coaching executives across a wide range of critical topics. Among his preferred ethics assignments, he is noted for his teaching about business influence on the science and politics of climate change, and teaching ethics to tobacco companies, banking, the nuclear energy industry amongst many others.

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