A rt Psalms: Lessons for a “Tone at the Top” ICL based on Trust and Justice e DOV FIscHER Brooklyn College, CUNY HERSHEY H. FRIEDMAN Brooklyn College, CUNY ABSTRACT: Today’s leaders need dependable models for restoring organizational trust. This study integrates biblical teachings with two streams of business literature, the leadership/trust literature and the governance/control literature. First, we map the modern concept of organizational trust and its components to the biblical concept of justice. Second, we derive specific lessons on how to improve governance and control with a “tone at the top” based on justice or trust. Psalms 72, 82, and 101 emphasize the importance of just leadership/organizational trust with three components: ability, benevolence, and integrity. Many of the justice/trust themes in Psalms mirror those of the secular literature, but we also derive unique biblical insights that go beyond secular notions. Key Words: organizational trust, justice, Psalms, tone at the top INTRODUCTION behavior, it becomes extremely difficult for employees to resist the temptation to bend the rules (Bowden & The Gallup Organization conducts an annual poll Smythe, 2008; MacDonald, 2007). Corporate auditors in which respondents are asked the following question: have long looked to the “tone at the top” of an orga- “Please tell me how you would rate the honesty and nization to see if leaders set an example for ethics and ethical standards of people in these different fields — very integrity throughout the firm (Committee of Sponsoring high, high, average, low, or very low?” The professions Organizations of the Treadway Commission “COSO,” that are top-ranked in ethics/honesty were nurses (85%), 1992; 2013). The highly publicized corporate failures in pharmacists (75%), doctors (70%), engineers (70%), the past two decades call for a reexamination of the lead- dentists (62%), and police officers (58%). The profes- ership qualities required to set a proper tone at the top. sions that did quite poorly were bankers (28%), business The accounting and auditing profession in particular executives (21%), lawyers (19%), members of Congress needs to regain public trust, which is the basis of the pro- (10%), and car salespeople (8%) (Newport, 2012). The fession’s credibility and usefulness. The past two decades Harvard Center for Public Leadership and its National have witnessed high-profile corporate scandals in which Leadership Index similarly ranks Congress and Wall accountants and auditors dismally failed in their fiduciary Street at the bottom when it comes to public regard for responsibilities (Cantoria, 2010). As a result, in 2002 their leadership (Rosenthal, 2012). Trust in educational Congress installed a new outside regulator, the Public leadership remains high but has declined in recent years. Company Accounting Oversight Board (PCAOB), to In short, there appears to be a loss of trust in leadership in oversee the auditing profession (Sarbanes–Oxley Act). the United States. The public has lost confidence in busi- The removal of self-regulation from the auditing ness executives, members of Congress, auditors, corporate profession should serve as a wake-up call to leaders and boards, educational leaders, and many more. professionals of all stripes. One of the features that has There is no question that ethics start at the top of the contributed to American dynamism since colonial days corporate hierarchy. If an organization wants to behave has been the ability and willingness to exercise leadership, in a virtuous, upright manner, it requires ethical and just initiative, and self-governance at all levels and spheres of leadership; if the corporate culture encourages unethical society in the form of affinity groups and professional JBIB • Volume 17, #1 25 associations. Lack of trust poses a threat to this unique the nature of leadership to see how it is intricately related feature of American society and therefore poses a danger to trust. to our competitive advantage as a nation. There are numerous definitions and classifications of Boards of directors of public companies are also guilty leadership (Shaver, 2012; Northouse, 2013). A common of not doing their job properly and thus failing in respon- theme in the literature is that to be effective, leadership sibility to shareholders and other stakeholders. Morgenson must be transformational, rather than merely transactional. (2013) identifies two critical areas of failure on the part of Transactional leadership is a style of leadership in which board members. One area of failure is in CEO succession, employees/followers are motivated by a system of rewards and the second area of failure is in their inadequate mea- and punishment. In effect, followers are encouraged to surement of company performance in order to determine certain courses of action by appealing to their self-interest: appropriate CEO compensation. The methods used by do a good job and the result is reward such as higher boards to determine CEO compensation often focus too wages or a promotion; perform poorly, and the result is much on short-term performance when it may take years some kind of punishment (very much like a transaction). to determine whether an investment actually works out. Subordinates, of course, must obey the instructions of In fact, less than four percent of major corporations tie the leader in order to receive the reward and avoid the compensation to long-term performance, as measured by punishment. The chain of command, as well as the goals a performance period longer than four years (Morgenson, and objectives (such as meeting a sales quota), need to be 2013). The result of using the wrong metrics is that CEOs clearly spelled out; supervision is necessary to make sure are encouraged to take huge risks that maximize their pay that subordinates perform as expected (Northouse, 2013; at the expense of long-term stakeholders. Bass & Bass, 2008). Such a leadership style can survive The failure of setting a tone at the top is not limited without trust or justice but only in the short-term. to the business world but extends to government and edu- Transformational leadership, on the other hand, cational leaders as well. In 2011, the television program provides mutual stimulation and elevation in that lead- 60 Minutes ran a sensational exposé of how congressional ers work together with subordinates to effect change. leaders profited from legal but unethical insider informa- The leader inspires followers by finding what needs to be tion (CBS News, 2011). In an even more shocking fail- changed and then communicating the appropriate vision. ure of leadership, one of the largest and most important Subordinates are invigorated and energized, they are public universities in the nation was shaken to its core encouraged to try different solutions and be innovative, by the failure of its president and star football coach to and they are part of the process of changing the organiza- protect children from abusive predators (Freeh, Sporkin tion. Creativity is encouraged, and the goal is to make & Sullivan LLP “Freeh Report,” 2012). all subordinates reach their potential and be successful. This paper will examine three Psalms (72, 82, and Leaders listen to followers, and the goal is to transform 101) that should be used by CEOs, auditors, bankers, the organization (Northouse, 2013; Bass & Bass, 2008). board members, educational leaders, clergy, and members Transformational leadership cannot exist without trust. of Congress to guide them in understanding what leader- ship is all about. A true leader is an ethical leader who is Definition of organizational trust. To trust a leader spiritual and wants to serve people in a just manner. We means to expect that the leader will perform his or her will refer to a model of organizational trust and its biblical responsibilities competently and benignly even when equivalent, just leadership. his or her actions cannot be perfectly monitored or con- trolled (Mayer, Davis, & Schoorman, 1995). According to Martin (1998), “Trust is the root of all great leader- LEADERSHIP AND TRUST ship” (p. 41). Arrow (1974) similarly describes trust as a highly efficient lubricant of social systems. Smith (1999) Effective Leadership Requires Trust gives a biblical example of Daniel as a trusted leader who Organizational trust and effective leadership reinforce persevered against opponents because of the confidence each other. After all, a leader cannot motivate without and trust he inspired. trust. At the same token, trust consists of more than just There is an obvious relationship between transforma- goodwill or benevolence but also includes leadership tional leadership, ethics, and trust. It is difficult to moti- qualities such as ability or competence. We briefly discuss vate employees if they do not feel their leader is ethical 26 JBIB • Volume 17, #1 A and trustworthy. Ethical leaders “distinguish themselves opportunity, creating toxic dumps that will result rt by exhibiting traits that are consistent with normative in numerous future lawsuits, or selling substandard ethical principles such as honesty, fairness, and trustwor- products that will fall apart after a few years of use ICL thiness. These leaders make fair and balanced decisions, are not ways to build a strong, viable company. The and actively consider the appropriateness of those deci- role of the CEO is not to make earnings look good e sions in terms of their ethical consequences” (Piccolo, in the short-run so that a few executives can make Greenbaum, Hartog, & Folger, 2010). Ethical behavior a killing before abandoning a sinking ship. CEOs is also a key construct in the literature on servant leader- have obligations to all stakeholders; their job is to ship and spiritual leadership (Greenleaf, 1997; Fry, 2003; ensure that a company is run in a way that it is Russell & Stone, 2002). healthy and will survive and prosper. Friedman and colleagues aver that CEOs have the obli- “Justice” as the biblical equivalent of organizational trust. gation to “lead the charge and transform companies into This paper looks to Psalms for lessons on how leaders can those with spiritual values.