Griffin (2014) states that due to negative media reports about organisations, the executive management had been stunned. This is a matter of urgency that high ethical standards become a necessity for leadership, particular in executive management positions. How can executive management reprimand other members of management, even the lowest rank employees, if they as leaders do not uphold the highest form of ethical principles? That means that leaders must lead by example. Executive leaders should not only uphold high ethical and moral standards, but also should ensure that all the team members adhere to high ethical standards.
The concept of corporate governance gained importance in the 1980s because of failure of some organisations and stock market crashes due to poor governance practices (Francis, 2000). There is not an acceptable universal corporate governance definition because countries differ from each other in terms of culture, legal systems and historical development (Ramon, 2001). The Australian Standard defines corporate governance as the process by which organisations are directed, controlled and held accountable (Wong & Mulili, 2010). Shleifer and Vishny (1997) define it as the ways in which providers of finance assure themselves of a good return on their investment. Sir Adrian Cadbury who chaired the United Kingdom’s committee on the financial aspects of corporate governance provided a bench mark for corporate governance in many countries (Monks ; Minow, 1996). The Cadbury Report (Cadbury, 2002) states that good corporate governance must include four key aspects. These four aspects are: a board should have clear responsibilities and its role should be different from the entity’s day-to-day management; checks and balances should be established to ensure that no person has autonomous power.
According to the King III Report (Institute of Directors of Southern Africa, 2009) leadership is characterised by the ethical values of responsibility, accountability, fairness and transparency. According to the good governance arrangement, institutions should work to ensure that efficiency, effectiveness and economics are rooted within the management culture. These three elements will permeate all levels in the organisation and its various internal and external stakeholders to the benefit of all.
There should be transparency in directing and controlling the entity and lastly that there should be boards established with executive and non-executive) members. Improved corporate governance can assist in attracting foreign investment (Mathur & Chatterjee, 2003). Adherence to good corporate governance can ensure that private and public institutions of higher learning will attract much needed financing. Lack of proper governance, amongst other, has a meaningful adverse influence on foreign direct investment (Dupasquier & Osakwe 2006). Public institutions of higher learning, in particular, around the world, experience a lack of funding from their government to achieve their mandates. The call for stronger corporate governance models in all organisations will lead to situations where the stakeholders demand more commitment and accountability to uphold these corporate governance principles.
According to the Corporate Governance Code of Namibia (NamCode) (Namibian Stock Exchange, 2014) the boards, which are the supreme leaders of an organisation, should uphold ethical leadership. That entails having leaders with integrity. According to the NamCode (Namibian Stock Exchange, 2014) the following are the characteristics of responsible leaders who will ensure that the organisation is seen as a responsible entity. Responsible leaders should uphold ethical values, accountability, fairness and transparency. Ethical leaders build sustainable organisations to ensure the economic, social and environmental uplifting of the society in which they operate. To ensure the uplifting role of their business in society, accountable leaders should consider the short term and long-term impact of their personal and institutional decisions on the economy, society and the environment. These accountable leaders operations are ethical and not only because of supervisory requirements. These leaders should uphold a value of personal and organisational ethical appropriateness. Accountable leaders will not compromise the environment and the maintenance and existence of future generations. Leaders with ethical principles will encircle a shared future for all internal and external stakeholders.
The above characteristics of a leader are of crucial importance to ensure that organisations operate for an unforeseen future to the benefit of all its stakeholders and the society. A lack or absence of these ethical principles of a leader who heads and manages an organisation will lead to t