In: Corporate Governance: Principles, Practices and Challenges ISBN: 978-1-63484-940-1
Editor: Edmund Klein  2016 Nova Science Publishers, Inc.
Chapter 3
AN ETHICAL AND VIRTUES-BASED MODEL
OF LEADERSHIP FOR A GOOD GOVERNANCE
INSIGHTS AND REFLECTIONS BETWEEN THEORY
AND PRACTICE
Del Baldo Mara*
Department of Economics, Society and Politics
University of Urbino Carlo Bo, Urbino, Italy
ABSTRACT
The chapter addresses the theme of responsible and good governance based on a
moral and virtues-based leadership approach.
Leadership is essential to the success of implementing ethics within the organization
and the benefits of diffusing ethical practices have been demonstrated stressing the
importance of the leaders’ virtues. Starting from these premises, the works focuses on
entrepreneurial and managerial leadership and on its attributes and role in developing an
authentic responsible orientation and a good governance. How does leadership affect the
dissemination of a virtues-based orientation at all levels of the organization? Which are
the attributes of a moral-based and virtues-based leadership? How do they affect
governance? These research questions are the thread from which the study has been
developed, focusing on the factors affecting moral and virtues-based leadership and
governance and related actions and strategies. The analysis addresses attention to the
balance between conditions under which strategies are carried out (models of work
organization, corporate governance and business atmosphere, intra and extra-corporate
relationships and leadership).
Initially the work describes the theoretical framework paying specific attention to
moral and virtues-based models of leadership and governance. Subsequently the chapter
presents the first results of an empirical analysis centered on exemplary case-studies
relative to Italian companies, which are included among the best performing ones and
* Corresponding author: University of Urbino Carlo Bo, Department of Economics, Society and Politics, Via Saffi,
42 – 61029-Urbino (PU) – Italy. E-mail: mara.delbaldo@uniurb.it.
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86 Del Baldo Mara
have for years built a responsible orientation through their mission and governance
models. The results of the study underline how virtues-based leadership can promote a
cultural reorientation and valorize humanity and relationships with stakeholders.
Moreover, findings highlight the need for developing further empirical research on the
relationship between ethical values, virtues, integrity and good model of entrepreneurial
leadership and governance.
Keywords: leadership, values, virtues, authenticity, business, integrity, common good, good
governance, responsibility, sustainability
INTRODUCTION
The business ethics literature emphasizes the values dimension of the entrepreneurial and
managerial activity. Concepts such as management integrity, authenticity and virtues are
becoming widespread in the corporate context, giving rise to models of good governance
aimed at constructing a more civil economy (Carrol, 2000; Driscoll & Hoffman, 2000;
Pruzan, 2001; Cortright, & Naughton, 2002; Argandoña, 2003, 2011; Gui & Sugden, 2005;
Zamagni, 1995; Zadek, 2006; Ketola 2008; Hemingway & Maclagan 2004; Del Baldo, 2015).
Moreover, several studies - which are placed within ethical theories (Garriga & Melè, 2004) -
underline how entrepreneurial and managerial behaviors, attitudes and values lie at the base
of social and sustainability-oriented strategies and actions (Spence, 1999; Vyakarnam et al.,
1997; Spence & Lozano, 2000; Revell & Blackburn, 2007; Godoz-Diez, et al., 2011).
In the last decades leadership ethics literature have increasingly focused the leaders’
behavior and the values and virtues from which it depends (Riggio et al., 2010). Leadership is
a process which involves influencing others, within a group context, directed toward goal
attainment (Olsen, 2010). Accordingly, leadership could be defined as “articulating visions,
embodying values, and creating the environment within which things can be accomplished”
(Richards & Engle, 1986: 206; Hetland, 2004). Several theoretical frameworks posit
leadership: trait theories (that are concerned with identifying the leader’s personal
characteristics; functional theories (which focus on what leaders do); style theories (which
concentrate on the manner of leadership adopted), as well as situational approach and
contingency theories (that view differing leadership styles as being appropriate in different
situations) (Cambridge, 2015: 296). Moreover, leadership theories and approaches include:
transational leadership (Burns, 1978; Bass & Bass, 2008); passive-avoidant leadership (Bass
& Riggio, 2006); servant leadership (Greenleaf, 1977); transformational/transforming
leadership (Burns, 1978); ethical leadership; spiritual and moral leadership (Bass & Bass,
2008; Brown, 2005; Brown & Treviño, 2006; Alford & Signori, 2014; Malloch, 2008; Fry,
2003; Pruzan, 2011; Capaldi, 2013).
Moral behavior and leadership are interrelated (Bass & Bass, 2008). Leadership is
essential to the success of introducing ethics within the organization (Martin & Cullen, 2006;
Kaptein, 2009; Kaptein & Wempe; 2002; Lloyd & Mey, 2010). The benefits of implementing
ethical practices have been demonstrated pointing out the importance of entrepreneurial
leader virtues (Dutta & Banerjee, 2011; Davis & Rothstein, 2006; Martin & Cullen, 2006;
O'Fallon & Butterfield’s, 2005; Riggio et al., 2010; Flores & Green, 2013; Brown, 2011).
Starting from these premises, the chapter focuses on entrepreneurial and managerial
leadership, as well as on its attributes and role in developing an authentic responsible
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An Ethical and Virtues-Based Model of Leadership Good Governance Insights … 87
orientation and a good governance. How does leadership affect the dissemination of a virtuesbased
orientation at all levels of the organization? Which are the attributes of a moral
leadership? How do they affect governance? In order to answer these research questions the
study focuses on the factors which affect moral and virtues-based leadership and governance
and related actions and strategies. The analysis addresses attention to the balance between
conditions under which strategies are carried out (models of work organization, corporate
governance and business atmosphere, intra and extra-corporate relationships and leadership).
First, the work offers an analysis of the theoretical framework paying specific attention to
values and virtues-based models of leadership and governance. Secondly, the paper presents
the first results of an empirical analysis, centered on exemplary case-studies (Yin, 2003;
Naumes & Naumes, 2006; Eisenhardt & Graebner, 2007) related to four Italian companies,
some of which are included among the Italian best performing ones (Marchegian excellent
companies – Istao, 2014) and have for years built a responsible orientation in their mission
and governance models. The empirical study has been developed using different research
tools (interviews, participant observation) and following the action research approach
(Contrafatto, 2011).
The results of the study have both scientific and managerial implications and underline
how virtues-based leadership can drive a cultural reorientation and valorize humanity and
relationships with stakeholders. Moreover, findings point out the need for developing further
empirical research on the relationship between ethical values, virtues, integrity and good
model of leadership and governance.
THEORETICAL FRAMEWORK
Moral-Based Leadership and Governance
In the ethical leadership construct (Brown, 2005) a good leader is portrayed as a moral
person (e.g., fair, honest, behaving morally both in personal and professional life) who
influences followers’ moral conduct and ethical behavior. Leadership is not possible without
ethics as “being a moral leader and doing, acting with moral leadership are one” (Hoivik von
Weltzien, 2014: 3). On the one hand moral behavior1 is influenced by situational factors such
as role modeling, diffusion of responsibility and conformity (Bass & Bass, 2008). On the
other hand individual differences (i.e., personality and values) act as antecedent of moral
behavior (Brown & Treviño, 2006; Rest & Narvaez, 1994).
When linked to spirituality moral leadership has been viewed as the mean by which
religious beliefs impact leaders, the workplace and the society (Hoivik von Weltzien, 2014;
Alford, 2015; Bouckaert, 2011). Managers and entrepreneurs who hold a spiritual perspective
on life are more ethical in their business conduct than those who do not hold a spiritual
perspective (Parry & Proctor-Thompson, 2002; Bouckaert, 2011; Pruzan, 2011). The
“spiritual leadership” literature assumes that leaders create a sense of spiritual meaning in
followers through values such as honesty, humility, frugality, motivated by leaders with a
calling to serve God or humanity (Fry, 2003; Bouckaert, Opdebeeck & Zsolnai, 2007;
1 Moral behavior is defined as the ability to implement justice requirements derived from a fair distribution of rights
and duties in a demanding operational context (Greenberg & Colquitt, 2005).
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88 Del Baldo Mara
Capaldi, 2013). In this regard Malloch (2008) provides several examples of “spiritual
enterprises” in which virtues are daily applied in the operative, organizational and strategic
management. These companies – also called visionary companies - possess a high level of
social and spiritual capital, are characterized by different religious faiths and are diffused both
in developed and emerging countries.
Ethical standards in business setting, levels of corporate responsibility and the role of
religion in business ethics are the interrelated concepts that Sauser Jr. (2005) addressed in his
work developing the idea of business as a calling in a religious sense, that which leads to a
particular attention paid by business leaders in creating an ethical organizational culture, a
good governance and developing an authentic orientation toward CSR (corporate social
responsibility). Indeed ethics literature has emphasised management integrity, authenticity
and virtues which are becoming widespread in the corporate context, giving rise to new
models of governance and business aimed at constructing a more civil economy (Driscoll &
Hoffman, 2000; Pruzan, 2001; Cortright & Naughton, 2002; Argandoña, 2003 and 2011;
Luthans & Avolio, 2003; Gui & Sugden, 2005; Zamagni, 1995; Zadek, 2006). These studies
are a significant and emerging part of the theoretical framework on CSR and sustainability
(Garriga & Melé, 2004; Becker, 1998; Brown, 2005; Ruisi, 2010; Malloch, 2008).
The organizational culture imbued with moral leadership enjoys several benefits:
understanding of the interdependence with stakeholders; learning environment; respect and
trust; cooperation; responsibility and accountability. As we can see in the following sections,
this is not an idealistic approach and one can find examples (i.e., the Norvegian company
Stormberg A/S; see Hoivik von Weltzien & Melé, 2009) of organizations that apply it and
where moral leadership is inspired by constitutive moral elements: innovation, intuition,
imagination and attention (Hoivik von Weltzien, 2014). The moral imperative of innovation
requires seeing the whole and understanding how human action impacts on others, including
the environment (Bruni, 2012; Bruni & Sena, 2013). Moral leadership and moral creativity
have become ever more important for businesses and for the development of sustainability. A
challenging approach suggested by Visser (2011) rests on the notion that business survival
depends on a continuous striving for sustainability and that moral leadership is a key driver to
implementing authentically responsible and sustainability-driven strategies (Goffee & Jones,
2009).
While these strategies can (and could be) be opportunistically used as a commercial
instrument, formalized and aimed to increase legitimacy (Porter & Kramer, 2006) and
external recognition (Matten & Moon, 2008; Castelló & Lozano, 2011), many companies are
characterized by a business culture making responsibility and sustainability a moral duty
driven primarily by an intrinsic motivation (Graafland & Van de Ven, 2006). Furthermore,
extrinsic orientation is mainly diffused among large companies while SMEs (small and
medium-sized enterprises) and family businesses are more often intrinsically motivated by
and are nurtured by social capital and values tipical of the entrepreneurial and familial
capitalism. They rely on their long-standing informal networks rather than on formalized
policies (Spence et al., 2003; Steurer et al., 2012; Fifka, 2012; Looser & Wehrmeyer, 2015).
Several studies in recent decades have in fact highlighted the existence of many
companies, often little known, even silently, which are witnesses of authenticity in their
strategies and actions. Particularly, intrinsic motivations are diffused among “ideal-based
company” (Malloch, 2008; Molteni, 2009; Capaldi, 2013; Del Baldo & Baldarelli, 2015),
such as community-based companies (Peredo & Chrisman, 2006), territorial companies (Del
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An Ethical and Virtues-Based Model of Leadership Good Governance Insights … 89
Baldo, 2010b), economy of communion (Eoc) companies (Baldarelli, 2011), as well as
family-based enterprises, whose social responsibility vision affects its responsible behavior
(Aragòn Amonarriz & Iturrioz Landart, 2016; Del Baldo, 2012). All these companies form a
diversified network that, throughout the world, offers example of authentic ethical-based
connotation (Hoivik von Weltzien, 2014).
The business world needs for “the application of successful intelligence and creativity
toward the common good” and brave leadership capable of contrasting mainstream
economics and business conducts which consider only monetary values, disregard non-market
stakeholders and discount the future (Zsolnai, 2015). “When one thinks of a good leader
(manager or entrepreneur), one thinks about a person who can get the most out of others.
Such a leader can then find a way to motivate others to excel and to provide the resources to
allow people to develop their capabilities in a way that coheres with the greater community”
(Bertland, 2009: 145).
Authenticity as a driver of entrepreneurial and managerial behaviour relates to the
expression of integrity (see Kaptein & Wempe’s (2002) “diamond of integrity” management
model) that is about being sincere, honest and genuine (Trilling, 1972; Cardon et al., 2009;
Aragón Amonarriz & Iturrioz Landart, 2016). Entrepreneurial and managerial authenticity
influences the nature and extent of responsible and good governance and the stewardship
approach adopted to manage stakeholders’ expectations. Organizational integrity means that
the organization’s values should guide its interactions with internal and external stakeholders”
(Painter-Morland, 2006: 358). It reflects the organization’s identity, goals and culture and is
supportive of ethical behavior. It can only exist where there is mutual trust between the
organization and its stakeholders (Paine, 1994) which, in turn, depends on the manner in
which the organization succeeds in living according to its stated values.
Principles which express authenticity in the business context translate into acting with
honesty and fairness with customers and suppliers (providing good and safe products and
services; openly share knowledge and competences; building lasting relationships); being a
good citizen (providing opportunity for less privileged people; making a full and fairly
contribution to society); nurturing a responsible and responsive employer (treating everyone
with dignity and ensuring people continuous improving and learning foster innovation,
leadership and accountability); being a guardian for future generations (contributing to protect
the natural world and conserve its finite resources; investing in developing skills, knowledge
and understanding in wider society); having a purpose (holistic development) which delivers
long-term sustainable performance (Sorci, 2007; Bebbington, 2007; Ketola, 2008).
Accordingly, practices that are formed from authenticity include a cultivation of direct
relationships with stakeholders beyond what is economically required, and the fostering of
trust is relationships within the company and between the corporation and its stakeholders
(Thomson, & Eynikel, 2011).
Alford (2015) suggests a framework to orient a good governance, whose purposes are: 1)
the common good, intended as “delivering value by serving society” and 2) the dignity and
value of people. Coherently, behaviors needed to to achieve these purpose are: solidarity
(other people “matter”); subsidiarity (freedom with responsibility); reciprocity (building trust
and trusted relationships); plurality (valuing diversity and building “bridges”); sustainability
(stewardship of people, values and resources).
Governing and running a company then requires exercise a leadership based on values
such as caring, people-centredness and integrity, so as to ensure its prosperity founded on
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90 Del Baldo Mara
transparency, accountability and responsibility (Von Ahsen, 2015; Oreg & Berson, 2011).
Literature distinguishes between authentic and pseudo-transformational leaders (Bass &
Steidlmeier, 1999) and focuses on “authentic leadership” as a “root-construct” and a vital
component of good leadership and governance (Luthans & Avolio, 2003).
The nexus between corporate governance and the entrepreneur/managers’ responsibility
is a theme which, in recent decades, has fully merged into the ethics of responsibility theory
marking the shift from a governance centered on managerial/entrepreneurial aims to a multipolar
and holistic model (Sacconi, 2008). In this sense, stakeholder theory (Freeman, & Reed,
1983) - which introduced the concept of equity (fairness) toward stakeholders - also becomes
an ethical theory, in which values and principles of moral nature are recalled (Sciarelli 2007).
At the same time, stewardship theory - founded on psychological and sociological traditions -
represents an alternative model of motivations and managerial behaviours (Davis et al.,
1997), based on a concept of “man” moved by a complex of motivations that are at once
economic (extrinsic and tangible), social, and emotive and oriented toward cooperative and
non-conflictual government, founded on trust and a long-term perspective of development
(Del Baldo, 2012).
Moreover, an interpretative key of authentic and moral leadership is provided by the
construct of virtues-based leadership, briefly described in the following section.
Virtues-Based Leadership and Governance
The role of virtue ethics is becoming increasingly relevant. Virtue ethics represents a
developing approach within business, following on the “recovery” of the idea of virtue in
mainstream philosophical ethics in the second half of the twentieth century (MacIntyre, 1985;
Liu, 2007; Battaly, 2010; Alford & Signori, 2014). Virtue ethics attempts to ground ethics on
the basis of character rather than rules (Bertland, 2009) and emphasizes integrity. Among the
“virtue ethics” is a Neo-Aristotelian approach applied to business ethics by Solomon (1992ab),
Hartman (2011) and Nussbaum (2000) (See Melé, 2009b).
Virtues (from the Latin virtus, i.e., strength) are the realization of the potential of human
beings to be able to achieve what is good for them and for others (the so called “good life”).
They develop gradually and in relationship with others and help us act in excellent ways
(Table 1).
Aristotle distinguishes between virtues of character (moral virtues) and virtues of mind
(intellectual virtues). The moral virtues, such as courage and generosity, arise through habit
(Aristotle, Book II, Chapter 6, 1106b–1107a; Aristotle, 1980) and involve rational choice. By
intellectual virtues (skill, scientific knowledge, practical wisdom, wisdom and intellect) a
person may achieve excellence in reasoning and truth. They are acquired primarily through
teaching (Aristotle, Book VI, Chapter 3, 1139b). Practical wisdom is as a bridge between the
intellectual and moral virtues.
Virtues are also conceived as spiritual values and include both the aforementioned four
cardinal virtues and the three theological virtues (Faith, Hope and Charity). Recently, scholars
have begun to stress the relevance of cardinal virtues (fortitude, prudence, temperance,
justice; St. Thomas Aquinas) in the business context both at the individual and organizational
level (Malloc, 2008; Melé, 2009a-b; Ruisi et al., 2009; Ruisi, 2010; Del Baldo, 2013a; Del
Baldo, 2015).
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An Ethical and Virtues-Based Model of Leadership Good Governance Insights … 91
Table 1. Virtues in the Classical and Christian Thought
Cardinal
Virtues (Plato)
Temperance: ability to moderate sentiments
Courage: strength of spirit to carry out virtuous behavior
Wisdom/Strength: control of passion
Justice: equilibrium
Ethical/Moral
Virtues
(Aristotle)
Courage: balance between cowardice and boldness
Temperance: balance between intemperance and insensitivity
Generosity: balance between avarice and prodigality
Magnanimity: balance between vanity and humility
Mildness: balance between quick temperedness and idleness
Justice: balance between conferment of honours, wealth and goods
Intellectual
Virtues
(Aristotle)
Arts: technical abilities
Science, Wisdom, Intellect: ability to think clearly
Practical wisdom, Prudence: ability to know the right way to achieve an
objective
Teological
Christian
Virtues (St.
Paul)
Faith: belief in God and His revelations
Hope: eternal life as the achievement of happiness
Charity: loving God above all else and loving others as one loves oneself
Transcendental
Cardinal
Values (S.
Thomas
Aquinas)
Fortitude (Courage): persevering or pursuing what is good in spite of
obstacles.
Prudence (Practical wisdom): aids practical rationality in identifying the
right thing to do in each situation. It supports the suitable means for the
attainment of purposes, ultimately self-realization.
Temperance (Moderation): ability to control one’s emotions by accepting
her/his deficiencies.
Justice (Friendship): regulates the relationships with others
(commutative/reciprocal, regulative and legal justice). In a broad sense
justice refers to benevolence and care for the good of others and thus it is
close to caritas, communion and friendship. It comprises all of the virtues
regarding human relations including: honesty, loyalty, gratitude, generosity
and solidarity.
Source: our elaboration.
Bastons (2008) underlines the role of virtues in the framing of decisions and in particular
the habits and virtues (cardinal virtues) in classical Ethics (Aritotelian and Thomistic ethics).
These virtues are cardinal because they are related to the human faculties that determine the
structure from which decisions are made (Pieper, 1966). More specifically, fortitude
(Courage) means persevering or pursuing what is good in spite of obstacles. Prudence
(practical wisdom) aids practical rationality in identifying the right thing to do in each
situation and supports the suitable means for the attainment of purposes, ultimately selfrealization.
Temperance (Moderation) is the ability to control one’s emotions by accepting
her/his deficiencies. Justice (Friendship) is a virtue that regulates relationships with others
(commutative/reciprocal, regulative and legal justice). In a broad sense, justice refers to
benevolence and care for the good of others and thus is close to caritas, communion and
friendship. It comprises all of the virtues regarding human relations including: honesty,
loyalty, gratitude, generosity and solidarity. In a business context courage is competence for
operating decisions; prudence is competence for predicting; temperance (the habit of self-
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92 Del Baldo Mara
control) is competence for evaluation and justice is integrity for action. Other similar moral
virtues are: generosity - balance between avarice and prodigality, magnanimity - balance
between vanity and humility, mildness - balance between quick temperedness and idleness.
Charisma and ability to motivate members of the organization by leveraging the
transmission of corporate values and the ability to create and manage working groups and
orient them toward common goals, the level of members involvement in the decision-making
process as well as the human support to collaborators, are all factors placed among the
leadership dimensions identified in the Globe research program (2008) - global leadership and
organizational behavior effectiveness - aimed to understand the cultural characteristics that
positively or negatively influence the leader effectiveness. Some of these dimensions include
aspects such as compassion, generosity and charisma, which can be traced back to the
transcendental virtues. Moreover, Flores & Green (2013) verified that leader assessments on
the Leadership Virtues Questionnaire - used to measure four leader virtues: prudence,
fortitude, temperance and justice - were positively related to assessments of authentic
leadership, ethical leadership and transformational leadership2.
Virtue ethics contributes to an environment for business that fosters best practices (Flynn,
2008) and allows us to understand the “roots” of a good governance as per the examples
provided in the next sections.
VIRTUES-BASED LEADERSHIP AND GOOD GOVERNANCE IN ACTION
Methodology
In order to verify whether a virtues-based model of leadership and governance are
applied in the business context, four Italian companies have been selected from two different
databases. The first is a national database related to companies monitored by the ISVI Italian
Observatory (Istituto per i valori d’impresa – Institute for the Company’s Values) and
included among the excellent companies (Marchegian excellent companies – Istao, 2014).
The second one is the international Observatory of the Economy of Communion companies
(www.eoc-online.org). All businesses are sustainability-oriented and over the years have
implemented many actions, projects and accountability tools (Del Baldo, 2010a; Del Baldo,
2013a; Del Baldo, 2014; Baldarelli & Del Baldo, 2015). The empirical study was developed
according to a qualitative approach and a case study methodology (Eisenhardt, 1989; Yin,
2003; Naumes & Naumes, 2006) and is placed in a body of research which involves both
academics as well as practitioners (included entrepreneurs and managers) making ample use
of case-studies to critically evaluate innovative leadership and governance model at the bases
of authentic CSR and sustainability-driven strategies. Indeed recently, scholars have called
for a return to in-depth methods, such as narrative and case-studies (Gartner, 2007) that are
valuable for generating theoretical propositions (Eisenhardt & Graebner, 2007) and for
actively contributing to face business challenges through the direct involvement of managers,
entrepreneurs and scholars (action-research approach) (Contrafatto, 2011).
2 The Leadership Virtues Questionnaire (LVQ) was developed through successive pilot tests representing over 1,000
managers.
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Table 2. Companies’ profile
Company’s name Ownership and size
Economic Sector and
Activity
Italian
Region
Year of foundation Market
Brunello Cucinelli Spa Listed
Open-family company
Large-sized
Textile: production of high
quality clothing, shoes, and
accessories
Umbria 1978
1,300 employees
National and
International
BoxMarche Spa Not listed;
Family based company
(open to external
members)
small-sized company
Paper industry: design and
production of packaging for
the food and houseware
sectors
Marches 1969
50 employees
Mainly National
Loccioni Group Not listed;
Family-owned mediumsized
company
Electronic industry: electrical
and automatic equipment;
plants-design-robots;
automotive; integrated
technologies for
environmental monitoring
and quality control;
biomedicine and medical
equipment; equipment for the
management of domestic
energy (green energy);
training courses and
consultancy for technical and
management education
Marches 1968
More than 300
employees
Mainly
international
Mercurio Net Not listed;
Non- family owned
Small-sized
Economy of Communion
company
ITC - Informatics solutions
(hardware, software, services)
Marches 1994
7 employees and 10
external collaborators
Local and
Regional
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law.
94 Del Baldo Mara
Data have been collected through a variety of sources: interviews addressed to the
entrepreneurs, the top and mid-management team, as well as internal collaborators, local
partners and external stakeholders; direct observation during company visits, meetings, and
focus-groups; documental analysis (relative to social and sustainability reports, ethical codes
and information available on the company website) as well as technical, managerial and
scientific publications refereed to the selected enterprises. Some of the companies have for
years been involved in different forms of collaboration (interventions in entrepreneurship
education initiatives, workshop and conferences).
The period of analysis is multi-year (starting from 2012 and still in progress). Table 2
summarizes the essential attributes of the selected companies.
Below, for each company, portions of the interviews addressed to the entrepreneurial/
management team are cited. Moreover, some projects and strategies that concretize the
virtues-based model of leadership and governance are briefly described.
Brunello Cucinelli Spa
Convinced that the peaceful atmosphere and the beauty of a local area enhance creativity
and the respect of human values, Brunello Cucinelli set up the headquarters of the company in
the fourteenth century village of Solomeo, in Umbria, in the same places where he absorbed
St. Francis’s philosophy since his childhood. The entrepreneur is actively involved in
working for the common good by producing a shared value, which is the fruit of his
involvement, together with his employees and the local community.
“I dream of a form of modern capitalism with strong ancient roots. I believe in a
humanistic enterprise, which always places human values in first place. I think that there can
be no quality without humanity. In my organization the reference point is the common good.”
(B. Cucinelli, 2015)
“All revenues are divided in four equal parts: the first is attributed to the company, in
order to consolidate future investment; the second one to the entrepreneur; the third to the
employees, whose salaries are about 20% higher than the national contract, while the fourth
part is to beautify humanity, that is, the creation of services, i.e., a theater or a hospital, that
can benefit the entire community.” (B. Cucinelli, 2015)1
“I would like to convey our land and the place from which we come through our artifacts,
trying to work with dignity, tolerance and respect. Our daily work becomes a partaker of
spirituality.” (B. Cucinelli, 2015)
BoxMarche spa2
The BoxMarche’s mission is “a call to reach the summit” in all fields and to be an
excellent company based on solid principles such as partnership, the centrality of the person,
constant improvement, respect for environment and territory and instilling a relationship of
trust and transparency among the local community and with the public sector. A true art
thrives in BoxMarche - the art of running a harmonious business by reconciling economic
objects and human interests on a day-to-day basis. BoxMarche has a soul, and never forgets
its origins; it has character, which is the fruit of the set of values and principles ingrained in
its mission and translated into its governance. The firm is conceptualized as a “narrative
1 www.brunellocucinelli.com/it/filosofia#/page1
2 For a more detailed analysis of this case, see: DelBaldo, 2010b.
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An Ethical and Virtues-Based Model of Leadership Good Governance Insights … 95
identity” that is an entity that “tells a story” every day. Responsibility and sustainability are
not considered as a mere opportunity for improving the firm’s visibility and reputation, but
are experienced as a “way of doing business.” They are motivated by moral reasons. Value
orientations and ethical principles (which are shared among the entire organization) guide
strategic decisions and reinforce the organizational culture. The conviction that permeates
BoxMarche is that entrepreneurial and managerial leadership founded solidly on ethics, has
greater probability of emerging and ensuring competitiveness and resilience.
“The true roots of BoxMarche and of many Marchegian entrepreneurs, can be traced
back in the agrarian culture based on the Christian doctrine, and which became the
foundation for sustainable, authentic and humane socio-economic development. The
management of BoxMarche is the classic demonstration of a category of entrepreneur who
has embraced the precious education inherited from one’s ancestors: the fundamental values
of family, faith, work, commitment, energy and courage. It is the reason why the company
stands out, a badge of honor for our land.” (Don Lamberto Pigini, President of Pigini Group,
partner, 2013)
“We have an emotional tie to our territory. We want to use our abilities to sustain the
local economy. Our activities are not only business choices but are networks made, first and
foremost, by human beings.” (T. Dominici, Managing director of BoxMarche, May 23rd,
2012)
“Perhaps it’s a little presumptuous, but we love to define ourselves as the agents of
civilization. The small entrepreneur is a “builder” (of activities, of men, of wealth). Our firm
embodies a narrative identity and tells a story. For this reason, it has a soul linked to the
spirit and dignity of the persons and is called to a great responsibility, inasmuch we have
inherited the land from our fathers, but we also have it on loan from our children.” (T.
Dominici, Managing director of BoxMarche, April 5th, 2011)
Loccioni Group3
Enrico Loccioni’s entrepreneurial venture represents an excellent example of an
evolutionary path (started in the 1960th) taken toward a knowledge-based business, centred
on the principles of tradition and innovation. At the same time it exemplifies the industrial
processes of many Italian small towns launched first by entrepreneurs who gave value to the
heritage of customs, traditions, civil conditions that their sharecropper ancestors had left. This
inheritance of co-responsibility is deeply entrenched in the Marchegian spirit and culture
based on solidarity, good sense, wisdom, prudence, work ethics and neighbourliness.
Nowadays the Loccioni Group is included among the Italian best performing companies
(Marchegian excellent companies – Istao, 2014) and has been recognized as “the best place to
work” and “top employers company” 2014 by the CFR and the Great Place to Work Institutes
(CRF, 2012). Moreover, a multitude of recognitions have been attributed both to the founder
(Enrico Loccioni) and to his Group: for the excellent level of innovation, the authentic
implementation of CSR and sustainability-oriented projects and the genuine ethical
orientation (i.e., the Sodalitas Social Award in 2005, 2008 and 2009, for “Internal Processes
of CSR and network enterprise model,” the “Metalmezzadro project in the knowledge-based
business” and “Sustainability Projects”); the “Business and Culture” Award in 2003; the
Legambiente award (for the “Leaf Community Project: Leaf Energy and Future” and for
3 For a more detailed analysis see: Del Baldo, 2013b.
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96 Del Baldo Mara
being a partner of the European Commission in the Sustainable Energy Europe Campaign);
and the “Olivettiano Business of the year 2008” by Ernst & Joung.