1. rdeshpande@hbs.edu LP 2011 Thinking about Leadership Character and Responsibilities For Control Systems: 3 Questions 3 Questions Am I comfortable with the likely consequences of this action? Am I meeting my duties and respecting others’ rights? Am I meeting my commitments and my company’s commitments?

2. Consequences of Actions StakeholdersLikely Impact: Short-TermLikely Impact: Long-Term Stakeholder 1 (Customers) Stakeholder 2 (Employees) Stakeholder 3 (Suppliers, Employees of Suppliers; i.e., B2B supply chain) rdeshpande@hbs.edu LP 2011

3. rdeshpande@hbs.edu LP 2011 Thinking about Responsibilities: 3 Questions Am I comfortable with the likely consequences of this action? Am I meeting my duties and respecting others’ rights? Am I meeting my commitments and my company’s commitments?

4. rdeshpande@hbs.edu LP 2011 Thinking about Responsibilities: “Duty of Fairness” Types of “Fairness”? “Procedural Fairness” (equal treatment under defined rules) “Distributive Fairness” (fair allocation of rewards/benefits) Fairness for Whom? Customers? Employees? Customers’ Employees (B2B Supply Chain)? Suppliers? Suppliers’ Employees (B2B Supply Chain)? Investors?

5. rdeshpande@hbs.edu LP 2011 Thinking about Responsibilities: 3 Questions Am I comfortable with the likely consequences of this action? Am I meeting my duties and respecting others’ rights? Am I meeting my commitments and my company’s commitments?

6. Fiduciary Principle: act in the best interests of your company and your investors Property Principle: respect property and the rights of those who own it Reliability principle: keep promises, agreements, contracts, and other commitments Transparency principle: conduct business in a truthful and open manner Dignity principle: respect the dignity of all people Fairness principle: deal fairly with all parties Citizenship principle: act as a responsible member of your community Responsiveness principle: be responsive to the legitimate claims and concerns of others rdeshpande@hbs.edu LP 2011 Responsibilities : 8 Principles for Action Commitments Adapted from the Global Business Standards Codex, Paine, Deshpande, Margolis, Bettcher, HBR Dec 2005

7. A single universal code of conduct (business standards) applied globally or situational business ethics following the “when in Rome”* notion. *When I go to Rome, I also fast on Saturday: when here, I do not. If you go to any church, observe local custom…” fourth century Ambrose, bishop of Milan, quoted in Peter Brown, Augustine of Hippo: A Biography (Berkeley, CA: Univ. of Calif. Press, 2000), 77-78. Research reported in “When in Rome: A Global Leader’s Guide to Managing Business Conduct,” Harvard Business Review Online, August 2011 (forthcoming), Rohit Deshpandé, Joshua Margolis, and Lynn Paine. rdeshpande@hbs.edu LP 2011 Control – Systems and Processes: The Dilemma