How Leaders Stay True to Themselves and Their Stakeholders
Authentic leadership is of great importance in the business world. It is not only about how a leader is perceived, but also about the consequences of unregulated authenticity. This can even lead to negative effects that undermine the trust of both employees and stakeholders.
Summary
- Authenticity can have a dark side, leading to thoughtless behavior.
- Leaders must remain true to themselves while also acting from core values.
- Artificial intelligence and algorithms bring new risks that must be well managed.
In authentic leadership, the emphasis is often on the leader’s perception and building trust. However, authenticity also has a dark side, which can lead to unfiltered behavior. Hannes Leroy has observed the phenomenon of the “authentic jerk” in his work with executives and research on leadership development. The challenge is that authenticity often stems from our self-perception rather than a clear understanding of our values. The path to authentic leadership begins with introspection and identifying core values. This quest for the invisible North Star helps leaders create trust by aligning their values with their actions.
Maintaining this alignment is a challenge, especially in an unpredictable political environment. For instance, it can be difficult to adhere to strong commitments in environmental management and social opportunities while a proactive stance often makes mature leaders targets for opposition. Julia Binder and Heather Cairns-Lee provide valuable advice on how leaders can tackle these challenges without jeopardizing business interests.
Moreover, new risks arise from the increasing role of algorithms and AI in strategy and operations. While significant progress has been made in accountability frameworks and principles for AI in recent years, implementation remains problematic due to cultural and structural issues within organizations. Öykü Işık and Ankita Goswami emphasize that leaders must define clear responsibilities and provide the resources to effectively manage these risks. Ethical considerations must be an integral part of the decision-making process and should not be treated as an afterthought when developing technology.
A specific area of application for algorithms where companies face significant legal risks is pricing. Chris K. Anderson and Fredrik Ødegaard focus on allegations of collusion and price-fixing faced by providers of pricing algorithms and companies that use them, such as multitenant landlords and hotels. Some lawsuits have been successfully resolved, others dismissed, and still others are pending. Companies considering applying AI to pricing decisions should closely monitor developments and seek legal advice to understand the nuances of the legal risks involved.
The essence of leadership lies in staying true to oneself and the organization’s value system. This is not only crucial for building trust within the team, but also has implications for recruitment and interim management. Leaders who are authentic and principled in their approach attract talent that shares these values, which is essential for the long-term success of the organization.
Source: Elizabeth Heichler, Dec 09, 2025, https://sloanreview.mit.edu/article/how-leaders-stay-true-to-themselves-and-their-stakeholders/
