Ethics and Leadership: An Executive’s Perspective

Catherine Heigel

On January 28th, Catherine Heigel, President of Duke Energy South Carolina, after delivering a keynote address at the Anderson Area Chamber of Commerce Annual Meeting, was kind enough to meet with me and answer a series of questions I had about ethics and leadership. This is the second such discussion in a series featuring perspectives from some top executives in the area. A summary of the discussion follows.



I&P
In the past few years, we have seen a few scandals with business leaders in the US (Enron, Nortel, Phar-Mor, Parmalat, etc…). How important is ethics for a business leader and a corporation?

Heigel
Ethics is critical to the success of a business leader and a corporation. In the case of Duke Energy, a regulated business by the State and Federal government, ethical leadership is essential.


I&P
Do you think managers and corporations are now more conscientious in ethical decision making after those scandals?

Heigel
Managers and corporations are definitely more conscientious about ethics now following the ethical lapses that led to the financial crises in 2008. Over time, Duke Energy has developed and put in place several training programs and anonymous tip lines in order to help employees make ethical decisions every day.


I&P
Is creating or sustaining a corporate culture one of your responsibilities as President of Duke Energy South Carolina? If so, please tell me about the process(es).

Heigel
The South Carolina division of Duke Energy has just been created. The position of President of Duke Energy South Carolina is a new role. The objective has been to create a focus on the unique needs and interests of our South Carolina constituents, yet also enhance the sense of connectedness with the corporation, headquartered in Charlotte, NC. For that, I’ve sought to sustain a corporate culture based on transparency of decision making and implementation, and passion for our business.


I&P
How critical is it for top executives to model values when creating or sustaining a corporate culture? What were the characteristics that you sought in the  individuals that you selected to be part of your new management team?

Heigel
It is definitely essential for top executives to model desired values when creating the corporate culture. In the case of Duke Energy South Carolina, I was seeking specific characteristics in the individuals who would then be part of my management team: being open-minded, collaborative, strategic thinkers with a positive attitude, a bias for action, a strong work ethic and good communication skills.


I&P
What are some of the traditional ethically charged issues in the energy sector?

Heigel
The energy sector, being a regulated business, has specific ethically charged issues. The relationships between companies and their local, state and federal regulators can be sources of ethical issues. Strict ex parte communications rules, such as those in place in South Carolina, help boost public confidence that regulatory outcomes are not influenced by improper communications between regulators and the businesses they regulate. Another source of potential ethical issues can be the accounting decisions surrounding the determination of customer versus shareholder costs. For example, advertising costs are borne by customers or shareholders, depending on the nature of the costs.


I&P
How do you see the evolution of the US energy sector and its regulations in the future? What will be the impact of renewable green energies?

Heigel
The US energy sector and its regulations have been evolving quickly in the recent past years. With an increasing focus on environment, the number of regulations has grown along with the investments on renewable energies. Companies are committed to developing cleaner energy resources.


I&P
How have you, throughout your career as a leader, made difficult decisions on a regular basis? Please tell me about the framework or approach you have used in making ethical decisions (Toolbox, etc…)?

Heigel
There is not a formal framework that I use to make ethical decisions. Instead, I simply ask myself, “What is the right thing to do?” In answering that question, I not only consider what is legal and ethical, but also what a disinterested third party would think of my decision. It has been my observation that the appearance of impropriety can be as damaging to a business’ reputation as an actual breach of ethics.


I&P
How does Duke Energy make and implement complex decisions that have ethical implications, in particular, how does Duke Energy handle the challenges that come with having many levels in the organization? Are there specific measures or training programs in place?

Heigel
Duke Energy has different tools and programs in place to help employees make ethical decisions. First, there are many policies and procedures as well as a strict delegation of authority guideline that regulate the way decisions are made and who makes them. Secondly, Duke Energy has a corporate ethics department based at the headquarters in Charlotte and an internal audit department that periodically audits for compliance with the company’s code of business ethics. Then, employees also have access to an ethics hotline that they can call whenever they feel that they need it. Finally, I emphasize the critical importance of communication internally with other employees and executives and externally with state and federal government regulators for example.


I&P
What advice would you give to Clemson students about ethical decision-making and becoming recognized as an ethical business leader?

Heigel
Ethics is very important to be a successful leader. It is part of your character and defines who you are. You should always be transparent on your agenda and your decisions so that you are trusted and respected by others. You should always be thoughtful in your decision making and at the same time be proactive in making things happen.



Julien Camiade is a second year MBA student working with the Rutland Institute for Ethics this academic year. He studies here as a Rotary Ambassadorial Scholar from France, sponsored by the Rotary Club of Clemson. His undergraduate degree is in Mechanical Engineering.

Julien Camiade