‘Yes, and of course barter was eventually replaced – or largely so – by the introduction of money as the principal means of exchange. But barter or its monetary equivalent is merely the commercial expression of that underlying principle of reciprocity, a part of that much bigger web of interchange that links all of us as humans together. There is an expectation of giving and taking – usually in all human relations, and leadership is no exception,’ I said.
‘Are you suggesting that there is such a thing as transactional leadership?’
‘Well, there is a transactional element in it. Often, where employment is concerned, it involves the exchange of money for time, skill and energy. I think it is vitally important that true leaders should be vigilant to ensure that the basic contract of exchange is honoured in a fair way – in the spirit as well as the letter of the contract. For example, people should get paid on time and receive all that is due to them. For satisfying that background, impersonal mutual obligation is a necessary condition for a fully personal relation.’
‘Isn’t that a matter of acting with integrity and fairness – qualities you mentioned in the beginning?, asked the young chief executive.
‘Yes, but it’s more a form of justice really – one of the cardinal virtues that the ancient Greeks and Romans expected in their leaders. The Roman lawyer Justinian expressed it in a nutshell: Justice is the constant and unceasing will to give everyone their right or due. A distinguished British Lord Chief Justice, Lord Denning, described justice as a spiritual thing with no satisfactory definition, though as a working definition he proposed that “it was what right-thinking men and women believe to be fair”. Denning’s use of the word “spiritual” reminds me of a saying that lingers in my mind: Justice is love in impersonal relations.’
‘So in your view transactional leadership could be interpreted positively as honouring the spirit as well as the letter of the “contract” that exists between leader and followers. I hadn’t realized that there is a spiritual aspect to it. Food for thought.’
‘Notice, too, that there are two broad types of contracts: spoken or written contracts, and unspoken or unwritten contracts. The former are explicit agreements, sometimes exactly spelt out in all their details, so that there is no room for ambiguity or reason for difficulty in interpretation. Work for lawyers here! An implicit “contract” by contrast is left largely unexpressed.’
‘So in an implicit contract how do the parties know what are the elements or “clauses” of the binding agreement if nothing is written down and no one talks about it?’ asked the young chief executive.
‘The extent – sometimes the existence – of these implicit “contracts” is revealed by situations that arise. As a general principle, the more impersonal the relation, the more we tend to make the contract explicit. The more personal the relation, the more we rely upon unspoken mutual understanding and trust.’
‘Obviously explicit contracts are involved in all forms of employment – at least nowadays – but is there an underlying implicit contract in leadership? After all, the leader–follower relation can be an intensely personal one.’