Employees say they want moral leadership from CEOs, managers

Dive Brief:

  • Employee demand for moral leadership from CEOs and managers is on the rise: The percentage of those who believe it’s more urgent than ever jumped from 86% in 2020 to 93% in 2024, according to findings by The HOW Institute for Society, a leadership development firm.
  • Moral leadership involves “putting principles and values before self-interest, extending trust to colleagues rather than micromanaging them, listening and learning from perspectives that challenge one’s views and assumptions,” The HOW Institute said in a Feb. 15 report. Moral leadership — or the lack of it — impacts everything from team trust to employee loyalty to the bottom line, the findings revealed.
  • For example, moral leadership improves employee retention and reduces the likelihood of turnover: Only 11% of those reporting to leaders ranking high on the moral leadership scale are looking for a new job, compared to nearly 1 in 3 of those reporting to bottom-tier leaders, the data from a broad cross-section of 2,500 U.S.-based employees showed. Moral leaders also are accountable for themselves and their teams; they find ways to make amends when mistakes occur, such as apologizing, and they foster environments of accountability as well, the report noted.

Dive Insight:

Put another way, while formal authority is about one’s official status, moral leadership focuses on the way one uses their authority to lead and “stresses the importance of connection, inspiration and a deep sense of purpose,” the report explained.

”Moral leadership has evolved from a worthy pursuit to a critical survival skill,” Dov Seidman, The HOW Institute’s founder and chairman, said in a statement. However, although moral leadership appears profoundly needed, supply isn’t keeping up with demand: Employees say that only 1 in 10 CEOs and only 13% of managers consistently demonstrate behaviors associated with moral leadership, according to the findings.

The gap has been brewing for a while. A 2023 nationwide survey by GE and global polling firm Ipsos revealed a disconnect between senior executives and entry-level staff over whether the execs effectively represent their company’s leadership mindset.

The survey defined leadership mindset as characteristics a company fosters to help employees become strong leaders, achieve its business goals and ensure long-term success. Both groups identified quality, reliability, integrity and innovation as key. They also agreed that leadership mindset must be clearly communicated to staff. But while almost all of the C-suite leaders said their executive teams successfully embodied these philosophies, fewer than 60% of the entry-level employees felt the same way.

In many instances, the disconnect could be caused by leaders struggling to identify what they should prioritize in the new world of work, as Deloitte reported last year. Nearly half of those responding to a Deloitte survey said their organization’s leaders are grappling with these paradigm changes, and less than a quarter said they believe their leaders have the capacity to lead through today’s distractions.

The tumult of last year’s layoffs may have deepened the disconnect, a recent report from outplacement firm and consultant Challenger, Gray & Christmas suggested. HR professionals and business leaders reported a declining trust in company leaders: Although 56% said their employees had a favorable view of leadership, this was down from 65% months earlier. The respondents pointed to inefficacy, inconsistency and poor communication as causes.

That’s where moral leadership plays a crucial role, The HOW Institute argued: “People are seeking leadership that works to forge shared truths and engender an abundance of trust, and that scales deep human moral values at all levels,” Seidman said.