The Vital Role of Character and Ethics in Finance Leadership

Have you ever stopped to consider the gravity of your role as a finance or accounting professional? We're the guardians of our organizations' critical resources, the moral compass guiding our teams, and the defenders of ethical conduct. In this thought-provoking episode of the Finance Leader Podcast, we explore the significance of character and integrity in our field. We delve into the crucial expectations of high ethics, the importance of trustworthiness, and the vital systems of internal controls acting as safeguards against misuse of assets.

As we challenge conventional wisdom, we pose the question: can strong character be taught, or is it inherent? This episode urges you to reflect on your own character, integrity, and the implications of your actions on your team and your organization. We discuss effective ways to communicate and uphold expectations of character and ethics within our teams. Of course, ethics is not just about preaching - it's about practicing. You'll find out why the most influential leaders are those who display high character and how they shape the culture and practices of their teams. Tune in to gain valuable insights into maintaining high ethical standards in our professions, and how we can continually strive to be better leaders.


Episode outline:

1. Why a high level of character is expected,
2. Internal controls are still a must, and
3. The great leaders display the highest character.

Please connect with me on:

1. Instagram: stephen.mclain
2. Twitter: smclainiii
3. Facebook: stephenmclainconsultant
4. LinkedIn: stephenjmclainiii

For more resources, please visit Finance Leader Academy:  financeleaderacademy.com. 

1. On the website, you can download the Become a Finance Leader Guide. You can use this guide to build your Finance Leadership skills so you can help senior leaders develop and execute the strategy.
2. I also offer a course, Advance Your Finance and Accounting Career: Developing a Promotion Strategy that Sets You Apart.

Transcript

Stephen McLain: 0:05

The finance and accounting fields need professionals of high character. We are trusted to safeguard the company's critical resources cash, cash equivalents, investments, other physical assets and many balance sheet assets so we must ensure we hire for character as well as skills. We talk about integrity, but how do we ensure our team is honest, reliable and trustworthy? Do you talk about and test for character and integrity during applicant screening and hiring? I expect our profession to practice and live by a high code of values and character to ensure proper internal controls are in place to safeguard limited resources. Please enjoy the episode. Welcome to the Finance Leader Podcast, where leadership is bigger than the numbers. I am your host, Stephen McLain. This is the podcast for developing leaders in finance and accounting. Please consider following me on Twitter, facebook, instagram and LinkedIn. My usernames and the links are in this episode's show notes. This is episode number 11, and I'll be talking about why character matters to the finance and accounting fields, and I will highlight the following topics Number 1 why a high level of character is expected. Number 2 Internal controls are still a must. And 3 the great leaders display the highest character.

Stephen McLain: 1:35

Motivational speaker Les Brown said our ability to handle life's challenges is a measure of our strength of character. I want to talk about our personal character. Today we are in a profession that demands strong personal character, but we don't talk about it enough. We are the guardians of our organization's critical resources. We oversee cash, investments, credit and other financial resources and asset management, so we need to make sure we have people in place who are trustworthy and honest to manage and protect those assets. It's not only required, but it's expected. We have to ensure internal controls are in place so the temptation and ability to take from the company is eliminated.

Stephen McLain: 2:22

If you have not listened to the last few episodes, here is a short list so you can go back. Episode 110 I talked about excellence and leadership with the finance and accounting professions. Episode 109 I talked about the Treasury Manager role and how it may be a great opportunity for you. Episode 108 I talked about overcoming obsessive-compulsive tendencies, so it may help in career success. Please go back and listen if you missed them. I believe they can definitely help you in your career growth and skills development.

Stephen McLain: 2:58

Now let's continue to discuss character. Our character comes down to our level of honesty and trustworthiness, especially when people are not watching you. Do you do the right thing when others are not watching or do you cut corners or even steal from the company and leaders? Are you watching out for your team? Are you taking care of them? For example, are you approving time cards on time? Are you counseling them to better performance? Are you helping your team to grow? Are you giving opportunities to those who have earned it? And are you aware of your personal biases so you treat everyone fairly? I have high expectations for all of you in this community and I have high expectations for myself.

Stephen McLain: 3:44

Our profession demands requires that we follow values and practice a high level of ethics. We are expected to act with high regard in protecting the company's assets and for protecting our team. If we don't have a high level of ethics, who will? It comes down to the finance and accounting professionals to protect company assets. Internal controls are still required. We still need a system to ensure no one can take from the company. Our internal controls are as good as we follow them. We need double checks, especially on our most risky assets, like physical cash and other similar assets, and people need to take their PTO so systems can run while people are out. We can trust, but we need to verify also and verify everything. I have been an internal review officer and ensuring we had systems in place to record and count for large purchases like equipment was essential to stopping fraud, waste and abuse.

Stephen McLain: 4:47

How can you test for character when you are hiring? You can use personality testing and screening to help you get a little closer to understanding your applicants, but be aware that bias can be built into such tests. I ask you to look beyond just technical skills and take the time to test character and personality. I know you want people with great excel skills, but don't bring on someone of questionable character and someone lacking in critical soft skills. It's just not worth it. Do you believe that people have character naturally, or can it be taught? We can definitely teach expectations and hold people accountable. Each person has to decide for themselves on the matter of character, values, integrity, honor and trustworthiness. We can measure results to see if our team adheres to these, but what about the inside? Each person must take action for themselves on how they want to or refuse to shift their point of view and moral compass. I am asking you to self-explore and make those shifts yourself, because what we do is important than that. We must live by a higher code of ethics and values, and it is what true leadership is based on. Now, to help you in your finance leadership development journey, I have a written guide for you called Become a Finance Leader. You can download it for free at the link in the show notes or go to financeleaderscademycom and download it there. This guide will help you with your mindset and other finance leadership related topics so you can help leaders throughout the organization.

Stephen McLain: 6:24

Many of you already know that I served in the US Army as a finance officer. I had an oath and an obligation to protect US Army assets, which were actually the assets of the American people. They owned it. As finance professionals in the military, we called ourselves guardians of those resources and we were diligent in holding ourselves accountable. We always asked ourselves who is guarding the guardians? Meaning, are we holding ourselves to a high level of character and ethics so we don't waste or even steal assets that don't belong to us? Now let's talk about why character matters to the finance and accounting fields.

Stephen McLain: 7:04

Number one why a high level of character is expected. Our profession expects us to practice a high level of ethics. If we don't, the risk for fraud, waste and abuse rises exponentially. Our character is critical and we need to hire and develop finance and accounting professionals who have demonstrated high character, ethics and integrity. We are the guardians of the company's critical resources and we have to ensure we will rise to that expectation. I believe that training and great counseling can minimize the risk and improve our values. Standing within the team. You can use character and personality tests in your hiring process to find suitable candidates, as long as you don't solely rely on them. With any tool, bias can be built in, so you must be aware. Additionally, candidates can answer based on what they think you are looking for. It's one tool you can use like any other tool, but should be considered along with many other tools and systems to evaluate the best candidates.

Stephen McLain: 8:10

Number two internal controls are still a must. Even though I'm advocating and encouraging that our finance and accounting professionals be of high moral and ethical character, that is not always the case. So we must ensure we have a robust set of internal controls be in place. And, by the way, internal controls aren't just for our profession, they are needed company-wide. Internal controls ensure we have established systems and double checks in case ethics fail and sometimes it will fail. Always practice your internal controls, perform the checks and double checks with our most vulnerable resources. We must practice good checks on the system so resources are not lost to fraud, waste and abuse.

Stephen McLain: 8:55

Number three the great leaders display the highest character. I believe that many senior leaders are really just managers because they fall short in one key area Making others around them better. I believe every executive leader has this responsibility to, from the chairman of the board and CEO down to each first-line manager. They will always have the incredible task of making sure their teams are growing, developing and getting better. The greatest leaders do this. They put others first. Now, how can you expect your team to have character and integrity if you don't convey values and ethics? If you take shortcuts, they will, too. Your behavior and your attitude set the tone and standard for everyone on their team and for all your direct reports.

Stephen McLain: 9:45

Now, as finance and accounting professionals, great character is expected and is the minimum for what we need to be doing regarding our work responsibilities. Am I being idealistic here? Yes, probably, because some people will not measure up. That is why we also set in place and enforce internal controls. I want to encourage you to be teaching and talking about character as much as you can In every team meeting and in every one-on-one session with your team members. It's that important. Now for action.

Stephen McLain: 10:16

Today, two things for you to consider. The first have you considered your own level of character and integrity? Do you practice great ethics or are you a questionable character? Next, if you are leading a team, what are you doing to communicate expectations regarding character and ethics? Ultimately, our behavior and conduct measuring out to our expectations of character? If not, then we need to make a course correction. Also, please check out financeleaderacademycom when you get a chance, where you want to help you with your goal planning and career advancement. You can find all the previous episodes of the Finance Leader podcast and the Finance Leader Guide I mentioned earlier. Please sign up for the weekly emails so I can share a short suggestion each week. I promise that my emails are short and can be read and easily understood quickly.

Stephen McLain: 11:11

Today I talked about why character matters in the finance and accounting fields and I highlighted the following points 1. Why a high level of character is expected. 2. Internal controls are still a must. 3. The great leaders display the highest character. Finance and accounting professionals are the last line for defending the company's assets.

Stephen McLain: 11:34

As leaders, we have a great responsibility to set a high example of character, ethics, values and integrity. We also should strive to help make the people around us better. If not, then we become nothing but a manager of tasks. Leadership skills are the pathway to advancement and greater responsibility. It takes a leader to take a mediocre organization to become a great one. It takes leadership to bring a team together so they can accomplish team goals, and it takes leadership to solve problems that enable the organization to achieve its long-term strategy. Great leaders grow other great leaders. If you solely focus on the numbers and not your people, you miss out on your greatest opportunity to shape the future for the long term. That is why I say at the beginning of my episodes that leadership is bigger than the numbers. I have high expectations for myself and I have high expectations for those who work around me, and I believe that the people who are listening to me now believe the same thing.

Stephen McLain: 12:42

Next episode, I will be talking about communicating to your team how much of an impact they have and how they can help shape the company. I believe that as leaders, we have a huge impact on the execution of strategy and not everyone understands that, so we get to convey how it may change your people. I hope you enjoyed the Finance Leader Podcast. I am dedicated to helping you grow your leadership skills, to change your mindset and to clarify your goals so you advance your career. You can find this episode wherever you listen to podcasts. If this episode helped you today, please share and leave a quick review so that others may find the podcast. Until next time, you can check out more resources at financeleaderacademycom and sign up for my weekly updates so you don't miss an episode of the podcast. And now go lead your team and I'll see you next time. Thank you.