We are experiencing a leadership crisis today. With so many instances of poor leadership, employees, stakeholders, shareholders and others are searching for leaders that they can believe in again.

A long list of CEOs and their companies have helped cement this negative perception in the past few decades: Ivan Boesky (insider trading), Michael Milken (junk bond fraud), Kenneth Lay (Enron), Dennis Kozlowski (Tyco), Lehman Brothers (sub-prime mortgages), Worldcom (bankruptcy), Union Carbide (Bhopal disaster), Bernie Madoff (Ponzi scheme), Tom Petters (Ponzi scheme) and many others have contributed to a low public perception.

Studies have also shown this alarming trend. The 2010 Edelman Trust Barometer concluded: “Although trust in business is up, the rise is tenuous.  Globally, nearly 70 percent of informed publics expect business and financial companies will revert to ‘business as usual’ after the recession.” In 2009 The Marist College Institute for Public Opinion in 2009 conducted a poll that found: “More than 75% of Americans said the moral compass of corporate America is pointing in the wrong direction.”

Other studies seem to say the same thing: we’ve lost trust with our leaders.  So if this is case, how do you identify the difference between a good and bad leader?

One way to look at leadership is Courageous Character.  This refers to one’s moral integrity, which is the inner strength to live in accordance with high moral standards.  If some of the above-listed business 'leaders' embodied these traits as will be outlined below, these organizations probably would not have gotten into this situation in the first place.

Courageous Character Defined
Courageous Character is a cluster of attitudes and behaviors, which draw upon the virtues of love and fortitude.  Character is closely related to the idea of integrity and moral courage.  Integrity comes from the Latin integras, meaning whole and sound.  Someone with integrity is the “real deal,” authentic in terms of living out one’s identity and values.  Integrity is validated as it is demonstrated in acts of moral or at times, physical courage—doing the right thing, especially for others, when it is not the easy thing.  As C. S. Lewis put it, “Courage is not simply one of the virtues, but the form of every virtue at the testing point.” Courageous Character is moral integrity put to the public test and validated in concrete acts of care and concern for others in situations that place the one expressing care and concern at risk.

Dimensions of Courageous Character
There are three strands to Courageous Character.  (1) Love—the capacity to pursue the best for others, to seek their welfare even when it places one’s own at risk.  (2) Courage—the strength to put something one values at risk for a noble purpose. (3) Integrity—the strength to live in accordance with what one values, to live as one, whole and morally healthy person, even and especially when it is inconvenient or comes with a price tag attached.

Courageous Character is Innate
Rescuers: Portraits of Moral Courage in the Holocaust recounts the heroic efforts of ordinary people who demonstrated altruism and what could be termed 'heroic love' as they rescued Jews from the Nazis during World War II.  The book features interviews with 105 rescuers from 10 countries.  “Again and again, the rescuers protested that what they did was natural and even quite ordinary.”  Though, as the authors note, “history does not bear out that claim.” Sadly, these men and women were the exception, not the rule.  What set these rescuers apart from their fellow citizens?

Nechama Tec addressed this question in When Light Pierced the Darkness: Christians Rescue Jews in Nazi-Occupied Poland.  Tec found that many of the rescuers had a history of doing good deeds before the war.  They visited the sick, collected books for poor students, even took care of stray animals.  She writes, “They just got into the habit of doing good.  If they hadn’t perceived the pattern as natural, they might have been paralyzed into inaction.”

This underscores the power of integrity and moral courage to shape one’s private as well as public life.  Nothing will define our public life that does not happen on a private, daily basis.  Only what is authentic in private will be undeniable in public—especially when it comes to taking a risk to demonstrate love and concern for others.

Discerning what is Right
The person with Courageous Character discerns what is “right”—to serve the best interests of others, and what is “wrong”—to debase or disrespect others out of selfish concerns.  Informed by moral discernment, and drawing from the strength of one’s integrity, the person with Courageous Character seeks the welfare of others, even at the risk of loss.

Creating a Fund of Credibility
Courageous Character is the foundation of trust, moral authority and collaboration, all of which are critical to the practice of effective leadership.  Leaders must earn the right to be followed, especially when followers perceive their welfare and best interests are on the line.

It is helpful to think of a leader possessing a fund of credibility, the balance of which reflects the level of trust placed in them by followers.  The fund balance is fluid.  As the leader acts in a trustworthy manner, followers make a deposit—an investment of trust if you will.  The amount is typically small at first.  Followers watch over their investment, evaluating if the leader is worthy of continued trust, or if he or she squanders it in acts of selfishness.  If their investment bears interest—if the leader acts in a manner that honors their trust, the follower incrementally increases his or her deposit.

Mark McCloskey has a Ph.D. from the University of South Florida and is the Professor of Leadership and Lead Faculty for Bethel University’s Master of Arts in Transformational Leadership program. He is a thought leader with Work Effects.