MINNEAPOLIS, Minn. -- The Center for Ethical Business Cultures (CEBC) announces its publication of James A. Mitchell’s The Ethical Advantage: Why Ethical Leadership is Good Business.

Based on Mitchell’s experience during nine years as chairman and CEO of the IDS Life Insurance Co. and on research by CEBC, The Ethical Advantage examines the long-term competitive advantages of creating an ethical business culture. It suggests that an ethical culture will make the economic pie bigger for all of an organization’s stakeholders, including employees, customers, communities, as well as its owners and investors.

Mitchell’s research indicates that more than 90 percent of a firm’s effectiveness is attributable to its culture. He sees ethical leadership as the way to create and maintain a productive and ethical culture. The ethical advantage created by this culture, he explains, is quite real and can be very large. 

Over the long term, a business with an ethical culture will be significantly more profitable than a business without such a culture.  In examples cited, over a period of 11 years, revenues grew four times, employment expanded eight times and stock prices increased 12 times as fast in companies with an ethical culture compared to those without.

Mitchell identifies the main components of ethical leadership. “By ethical leadership, we mean creating a framework for the organization that attempts to balance the interests of all its key stakeholders -- customers, employees, owners and the community at large -- and to maintain that balance in both the short term and the long term.

“We mean articulating a mission and values for the organization that motivate employees to get engaged -- to bring their whole selves to work and unleash their creative efforts. We mean developing leaders who constantly try to walk the talk by living the firm’s values. And we mean having systems and processes throughout the firm that reflect its values and reinforce the kinds of behaviors that are desired.”

Recently retired as executive vice president of marketing and products for American Express and chairman and CEO of IDS Life Insurance Co., Mitchell serves as executive business fellow at the Center for Ethical Business Cultures where he focuses on issues of leadership and ethics. Under Mitchell’s leadership, IDS Life became the fastest-growing and most-profitable firm in its industry, with profits growing at a compound annual rate of 23 percent and return on equity at twice the industry average.

The Center for Ethical Business Cultures is a 24-year-old nonprofit organization whose mission is assisting business leaders in creating ethical and profitable business cultures at the enterprise, community and global levels.

The center operates in a partnership with its business members and the University of St. Thomas College of Business and the University of Minnesota Carlson School of Management. The center’s research, publications, products and services focus on ethical leadership, management and culture, corporate citizenship and employer-employee relationships.

The Ethical Advantage is available in PDF format via the web at www.cebcglobal.org.