Today, companies face major challenges in how they should conduct their business. With the growing importance of climate and social emergencies in the eyes of an increasingly demanding society, it is imperative that companies take a more active role in taking responsibility for the consequences of their activity and trying to make a positive impact. Responsible leadership can thus be a potential response to these challenges.

This week our Center (Center for Responsible Business & Leadeship), published the results of a year-long-study: Responsible Leadership: what does it mean and the future for Portugal. The study aims to identify the differentiating characteristics of responsible leadership in itself and compared to other leadership styles. In addition, it seeks to understand the perception of the Portuguese public on this topic, including how it understands its defining characteristics, the aspects that enhance or hinder it, and its impact.

The study is based on three distinct but interconnected parts: a systematic literature review, a questionnaire study (including two samples based in Portugal and a sample based in the United States of America), and a qualitative study (including 15 interviews with Portuguese leaders from different companies).

A systematic review of the literature provided a theoretical and conceptual basis for the project. Through the questionnaires, it was possible to understand which groups of stakeholders are included within the "responsibility" of the responsible leaders; as well as understanding whether there are differences in the perception of what is responsible leadership between academic literature and practice, and between the Portuguese and American executives.

This study indicates, in the questionnaires and interviews conducted, as the five main characteristics of responsible leadership (1) ethics, (2) honesty, (3) authenticity, (4) being a source of inspiration, and (5) humility.

Also in a comparison made with American executives, the characteristics identified by the Portuguese and American samples present many similarities, as 4 out of the 5 characteristics identified as more relevant were the same: honesty, ethics, authenticity, and being a source of inspiration. The only obvious difference is that the Portuguese sample points out the humility of the leader as more important, while the Americans place more emphasis on the empowerment of subordinates.

The interviews with the leaders allowed us to understand that one of the main obstacles to the implementation of responsible leadership remains the cost involved and the great investment it requires. When a company faces financial problems, the path of sustainability may be affected.

However, despite the multiple obstacles, this leadership style has been seen as the best viable solution in the long run, and as essential to any business that wants to be sustainable (in the holistic sense that includes the economic, social and environmental dimensions). In fact, responsible leadership was regarded as the best way forward, not only for its intrinsic qualities, but also because it constitutes a competitive advantage. If leaders do not follow this direction, they may be overtaken by competition that is able to offer more appealing alternatives to consumers.

It was also verified that the role of the organization's employees appears to be crucial to the success of the implementation of sustainable and responsible measures. Thus, a motivated team that believes in the values, mission and purpose of the company becomes essential.

In short, despite the barriers identified, responsible leadership was seen as the most correct and viable way to ensure the long-term survival of the company. Companies without purpose and values, where the only concern is profitability, run the risk of failing in the long term unless they take the initiative to change the way they conduct their business.

Responsible leadership can thus correspond to the leadership of the future.

Have a great and impactful week!

Nuno Moreira da Cruz
Executive Director
Center for Responsible Business & Leadership 

This article refers to edition #166 of the "Have a Great and Impactful Week" Newsletter and covers SDG 8 and 17.
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