Leaders and managers are battling to keep up with the pace of technological change, struggling to fend off growing competition and grappling with a difficult economic climate.

In the midst of this maelstrom, a strong set of values can serve to illuminate the way ahead. They are the foundation for strong leadership and management, the glue that sticks the organisation together and the unwritten code that helps managers make the right decisions about what they do and how they do it. Values help employees make sense of the new and constantly changing challenges they are being asked to take on and give them a clear picture of how the organisation wants them to behave.

There are some high-profile examples of organisations that have achieved outstanding results by putting values at the heart of everything. Virgin and Pret A Manger, for example, are both highly successful businesses with a distinctive, ethical approach. This is not just tokenism, but a deep-seated ethos that permeates both organisations.

Virgin, for example, places huge emphasis across its operations on being a responsible service provider, managing its impact on the environment and playing a role in the communities that it operates in. Pret A Manger has a strong tradition of developing its people, places a high value on encouraging diversity and actively raises funds and donates products to charities for the homeless across the UK.

The truth, however, is that many organisations are still struggling to get to grips with how they can effectively harness the power of values on an ongoing basis. They may well have a glossy values statement pinned to the wall in their corporate HQ, but their employees are not living and breathing those values on a day-to-day basis.

The pages of the national press are full of examples of what happens when organisations fail to approach business from an ethical standpoint – or when the actions they take are not congruent with the values they pretend to espouse.

Reputations that have taken years to build can be damaged by a succession of unfortunate media headlines. BP is the latest in a long line of examples from the corporate world. It is estimated that damage done to the business as a result of the Gulf of Mexico oil spill could result in losses of up to £15 billion. The recent MP expenses scandal in the UK, where MPs were exposed for unethical charging of expenses, has also graphically illustrated the importance that people attach to following a moral code rather than simply obeying the rules.

But what do we really mean when we talk about values? How do leaders and managers develop values propositions that support their business objectives? What do they need to do to ensure their employees buy into those values and demonstrate them in their dealings with stakeholders on a daily basis?

Trust and confidence march together and the capitalist economy depends on a large number of people trusting each other. This fundamental of business life is unlikely to change and will be a critical factor in getting the economies of the world moving forward onto a sustainable growth path.

The challenges to our institutions are already very visible, but we also need to spell out the implications for attitude and behaviours. Grooming managers and leaders for stardom will be increasingly difficult without an acknowledged ethical code.

The general trend across business now is to focus more on outputs rather than processes. Organisations are increasingly working with consumers to see how they can improve their products and services, and are seeking to forge strategic partnerships with others who can help them develop and deliver what the customer demands. The lines between the public and private sectors are becoming more blurred as a growing number of services are outsourced to contractors in a bid to save costs.

This means that it will become even more important for organisations to be outwardly focused and to be able to exhibit values and ethics that have broad appeal to their range of stakeholders. More companies will need to learn the lessons of the past two years, and exercise constraint and restraint in their public behaviour.

The values and ethics of managers and leaders themselves will need to be increasingly open to scrutiny. Senior pay is just one example of where values and ethics are most publicly displayed, and where there is a growing unease about both rewarding poor performance and pay inequalities.

Accounting conventions now require full disclosure of senior pay and rewards. Public sector pay in the UK will also come under the spotlight with the new review body being chaired by Will Hutton.

It has already become apparent that some basic concepts of fairness, equality and justice are being overlooked – partly because they have never been articulated properly. Because of historic difficulties with pay regulation, it is going to be doubly difficult to regulate pay in the public sector. There are also ongoing issues of low pay and about the affordability of pensions.

In setting top reward strategies, organisations need to make sure they reward and encourage the behaviours that are consistent with the organisational vision and values. The way we value people at the top has never been more important – and avoiding the issue will be impossible.

To find out more about values and ethics and their impact on managers and management decisions, purchase Ruth’s book at www.managers.org.uk/ceo_book.  You can also follow Ruth Spellman on Twitter via www.twitter.com/cmi_ceo