How to Judge the Integrity of a Leader

Understanding the integrity of a leader is important when investing in a company. If you can find a leader with good integrity and a track record of increasing revenue, net income, EPS, and ultimately the share price of a company, you will increase your probability of earning a return.

The following checklist will help you discern a good leader from a bad leader. It will also help you assess the people in your work life as well as your personal life.

If you are a good judge of character and can read people easily, this article will be straightforward. However, if you’re someone who constantly feels like you’re being taken advantage of by others or are continuously stressed out by those around you, this might be a guide to improve your social circle.

Based on my experience of working with small business owners on up to C-Level executives of publicly traded companies, I’ve been able to compile a checklist which acts as a guide to understand the integrity of those around me. Feel free to use the checklist below and if you like, go ahead and add additional criteria.

1) Are they a manager or a leader? There is a difference. A manager seeks to manage whereas a leader is appointed or called to the position. I once worked for a large company, which I will not mention, and on day 1 I was warned “This company is filled with a lot of managers but very few leaders. One should be wise to know the difference.” Within the first week I quickly confirmed this particular company was indeed filled with managers. The managers never owned their own mistakes, they were quick to interrupt, they made decisions based on emotions, and they did not have self-awareness. We’ll touch on a few of these points and more, below.

2) Do they first seek to understand before being understood? A good leader will typically listen first before responding. They will analyze the content of the discussion as well as the people in the conversation first and then formulate an educated response. Unfortunately, I see a lot of managers who interrupt others. This is a red flag. A good leader does not interrupt and if they do, they acknowledge and apologize for their poor actions. If you’ve ever seen the show Shark Tank, take notes on who typically speaks last. There is a common thread here. That person happens to be Mark Cuban. He sits back, let’s the other sharks make their comments, formulates his own logical opinion, and then speaks. Of all the sharks in the room, Cuban happens to be the only billionaire.

3) Do they react with logic or emotions? One of the C-level executives I worked for at a large company once told me “The more logic and data you can apply to a decision, the less likely you will fail.” I’ve applied this logic to my business and personal life and I found this to be absolutely true. On the opposite side of logic are emotions. Unfortunately, most people react with emotions, especially on social media. This is why good leaders typically avoid social media. Social media is filled with people hiding behind their keyboards, making emotional responses on subject matter they know nothing about. As quoted by Mat Fraser, 5 time fittest man on earth (CrossFit) “No one successful ever puts others down either on social media or in person.” I may be paraphrasing this quote but the essence is most successful people in any profession neither have the desire nor the time to put others down.

4) Are they prideful or humble? We’ve all seen “boys” on social media with photos in front of private jets or Lamborghini’s trying to impress others. The foundation of this behavior is based on pride. They are not motivated to solve problems and remove pain, they are motivated to elevate their pride. A good leader does not brag or boast. A good leader is focused on solving problems and providing value to others. Even humble bragging is a form a pride and is typically easy to notice. If you see or hear this type of behavior, this is another red flag.

5) Are they anonymous? Have you ever seen someone doing something good or make a donation and then talk about it or post about it on social media? This contradicts the positive action and echoes the foundational issue in point 4. That issue being pride. I see this often where people will do something good and then post about it on social media. As if it’s justifying how good of a person they are. I recently saw a social media post where a waiter (a young man) was managing double if not triple the number of tables he usually managed which caused food to be delivered to customers about 30 to 45 minutes late. One couple sat back and observed and when they finished their $50 meal, they left a $100 tip with a note saying “We know what you’re going through. We’ve been there ourselves.” The issue is, the woman who left the tip posted this on social media. It’s wonderful that she helped but the fact that she announced it publicly, revealed her true integrity. The purpose of leaving the tip was not to help (and encourage) this young man, the purpose was to show others how generous she is. A good leader will do good work with no consideration for acknowledgement as it does not matter. The purpose of doing good work is to provide value or remove pain. The correct approach is to do the good work, keep your damn mouth shut, and keep doing it over and over again. One of my favorite quotes is from Vince Lombardi, coach of the Green Bay Packers in the 1960s where he led the team to 5 total NFL championships in 7 years. He said “Act like you’ve been there before.” The meaning behind this is essentially do good work and don’t make a show of it. Remain humble and keep doing it over and over again.

6) Do they pass the credit and own the mistakes? When something goes well and leader is given credit, pay attention to what they say. If they say “thank you” and leave it at that, you have yourself a red flag. A good leader will say thank you and pass the credit onto others. They should never take credit themselves. On the flip side of this equation, when something does not go well, does the CEO place blame on others or do they own the mistake? A good leader will own the mistake no matter if it’s their own fault or not. When they accepted the role of a leader, they accepted the responsibility to own the mistakes whether they like it or not. A poor leader or a manager simply does not understand this.

7) Are they self-aware? A good leader is typically very aware of their surroundings. They can read a room with little to no effort. They can read body language without hesitation. They can see issues before they occur. I was recently listening to a podcast where someone said “If more people in this world can keep their head on a swivel and pay attention to others before themselves, this world will be a better place.” Unfortunately, poor leaders and managers are focused on themselves, not others. A good leader will assess the situation and ask how they can help others before an issue is verbally raised in the first place.

The best way to understand if a CEO is a good leader is to simply Google their name. Try to find out what other people say about them. If they are not a good leader, you should be able to find those reviews fairly quickly.