What is Ethical Leadership – and Why is it Important?

Written by Haley Boyce

what is ethical leadership?

These days, it’s difficult for customers to know which businesses truly act with integrity, with regard to the environment and corporate social responsibility (CSR). Sophisticated marketing campaigns and a good public relations firm can make it surprisingly easy to fake it, spinning CSR into little more than an evocative buzzword.

But the funny thing about ethical conduct is that the real thing shines brighter than even the most well-polished façade. And in the end, that level of integrity is a good investment that can take your company beyond the threshold of success that competitors are struggling to break through. 

A little heart and integrity at the core of your organization’s creed will instill a sense of confidence, trust, and loyalty that no amount of PR and advertising can touch.

But what is ethical leadership, exactly? It’s more than just the act of demonstrating proper conduct both inside and outside of the office with respect to ethical beliefs and values. It’s about honoring and being motivated by the rights of others. It’s about not looking away from wrongdoing, even if it would benefit the company. It’s about looking out for people and the environment, the marketplace, employees, suppliers, and manufacturers around the world. It’s about doing what’s right not just what is profitable. And it’s about doing it even no one is looking.

Ethical Leadership Examples 

ethical leadership exampleEthical leadership is the radical idea that employees, markets, and society are a collective of people and deserve to be treated as such.

If ethical leadership were a house, its four pillars of strength would be: 

Some examples of ethical leadership in action include:

Ethical leaders live their creed

Ethical leaders don’t make promises they can’t keep, and they keep the promises they make. Ethical leaders set the bar high when they act selflessly and treat everyone with kindness – they always remember that everybody who works for the company is a contributing member. The janitor and the CEO are equally as important as the intern and the team leads.

Emphasize the values the organization is founded on, how the community is impacted by the ethics of the company, and how to internalize those values.

Ethical leaders listen to their workforce and provide a forum

As a leader, provide town hall meetings where every voice can be heard and respected for their input, or lend an ear when someone needs to discuss a concern or idea one-on-one. At the end of the day, people will remember how you treated them more than how much money the company made. 

Ethical leaders speak the truth

Stay transparent at all times. Never tell a lie, omit a truth, or misdirect an employee, customer, or client. The truth always comes to the surface sooner or later, and the reputation of you, the company, and your employees will come into question. Keep everyone on the team aware of decisions being made to keep the rumor mill nonexistent, and your trustworthiness part of the reason people like working for an ethical leader such as yourself. 

Ethics as a Basis for Effective Leadership, Not Just a Tool

mahatma ghandiWhen business is good, we’re feeling high on the rush of success, belief in our way of doing things is supercharged, and there’s nothing that can stop us. Until we have a bad day, or even a bad season. That’s when we need to be reminded by those who have gone before us that maintaining an ethical, high-integrity grounding is what ultimately sees us through to success.

Sticking to our code has gotten us there before and will see us through once again. 

“Leadership consists not in degrees of technique but in traits of character; it requires moral rather than athletic or intellectual effort, and it imposes on both leader and follower alike the burdens of self-restraint.”

“I suppose leadership at one time meant muscles; but today it means getting along with people.”

“His peaceful resistance shook the foundations of an empire, exposed the emptiness of a repressive ideology, and proved that moral leadership is more powerful than any weapon.”

“Educationists should build the capacities of the spirit of inquiry, creativity, entrepreneurial and moral leadership among students and become their role model.”

“Divorced from ethics, leadership is reduced to management and politics to mere technique.”

“Ethics is knowing the difference between what you have a right to do and what is right to do.”

“The first step in the evolution of ethics is a sense of solidarity with other human beings.”

“At its best, leadership development is not an “event.” It’s a capacity-building endeavor. It’s a process of human growth and development.“

“A leader is someone who holds her- or himself accountable for finding the potential in people and processes.”

What are the Fundamental Aspects of Ethical Leadership?

The obvious answer is that to be an ethical leader you must subscribe to a code of ethics. As a businessperson, the embodiment of ethical leadership consists of several fundamental aspects:

Determine and set your values

First ask yourself what matters to you as an individual outside of work, then design a plan to use those values as a leader in your workplace.  

Bring other ethically-minded people into the organization

Good friendships come together based on similar interests, but they become lasting ones because of shared perspectives on life and morals. Hiring a team of colleagues in a similar way impacts the overall ethics of the team in an upward, positive way. 

Promote transparency

Transparency is key here. If you’re working ethically, you’ve got nothing to hide, right? But open communication isn’t only about sharing, it’s about listening too. Much like servant leadership, ethical leadership recognizes that employees are souls, not robots. Communicating with them like they deserve respect creates an open line of communication that flows in both directions.  

Be self-aware

It’s easy to automatically put up our defenses and say, “Me? I don’t judge anyone.” But the truth is, you either have or do, even on a subconscious level. As a leader, it is critical to the vitality of your company and overall morale that you remain aware of insensitivities in yourself and others that could pose a threat to everyone’s success.  

Set the example

Being a leader means being the one to follow. You won’t gain the success you need from your employees if you’re the type who behaves in a “do as I say and not as I do” manner. You don’t have to be perfect, but your effort to strive for excellence in morals and work ethic should align with how you expect the rest of your team to behave as well. 

Be forgiving of mistakes

Accountability is key. Leading by example as previously discussed doesn’t mean being perfect, it means showing everyone else how it can be done. And one of the best ways to create a transparent, honest, ethical company is to fess up to your mistakes. You’re bound to make them. Hiding them makes them worse when they inevitably come to light, so why not own them and show the rest of your team what it looks like to accept responsibility for a blunder and fix it with grace. It’ll allow those who work under you to feel confident to take risks that could ultimately result in greater success for your company. 

Seek role models

Find someone who has accomplished what you want to in similar, ethical ways that you intend to, and do your best to emulate their style of leadership. This could be a former boss of yours, a professor who is as good in the educational field as he is in the business one, or – if you’re ready to shoot your shot – reach out to a leader in your field whom you admire both professionally and ethically and ask them to be your mentor. 

Weave corporate social responsibility into your business strategy

Being an ethical leader means extending your values beyond your place of business, directly into society.

This is called Corporate Social Responsibility, or CSR. In what ways can your company strive toward making a positive impact on your local community or the world? Climate change, underserved families, ending food insecurity – the list is expansive, but wouldn’t it be great if you could say that your organization is working to shorten that list?

Learn from the greats

Mentorship doesn’t have to be an interpersonal relationship. To be influenced by the greats in ethical leadership, turn to the books written by those who have walked the path before you. Books by Jeremy Bentham, John Stuart Mill, Peter Singer, and (for a more modern approach) Peter Drucker.

Honor yourself

Selfcare is a term used a lot these days, and with good reason. Akin to putting on your own oxygen mask before helping those around you, as a leader you must take care of your well-being in order to take care of the people on your team. As the saying goes, you can’t pour from an empty cup. 

What is the Ultimate Goal of Ethical Leadership?

And in this way, ethical leadership can keep a company’s reputation untarnished by scandal or negligence, even if that isn’t the core purpose. Having a reputation in your industry as an organization that is fueled by principle leads to higher profits, and more loyalty among customers and employees. 

Companies that treat partners, people, and markets with respect are magnetic. Everyone wants to be around people that make them feel heard, honored, and equal. As such, ethical leadership can help a company attract more partnerships and customers. 

The ultimate goal of ethical leadership lies at the nexus of all these things…

Positive morale

Work culture and productivity improve when team members know they can stand behind an ethical leader. It increases trust, allowing employees to know they are helping individuals and the company as a whole. 

Improved brand image

A respected company is one led with integrity. An ethical leader will make decisions based on the best interest of both employees and customers. Their goal is to build success upon the foundations of principles and a sense of what’s right. When they do this, they (and the company) earn respect from the inside out. 

Scandal prevention

Not all publicity is good publicity. When a leader adheres to the company’s agreed-upon values they stay away from unflattering situations that would keep a customer or client from wanting to do business with them. 

Increased loyalty

Loyalty is one of the ultimate goals of ethical leadership because employees and customers want to feel good about the companies they work for and do business with. Working based on principle helps produce quality content and loyal customers and employees because they know they can rely on the integrity of the company and its leadership. 

Stronger emotional well-being

Weak leadership looks like dictatorship, lack of concern for employees’ emotional and mental well-being, playing favorites while shutting down other employees, and treating people like workhorses rather than human beings with souls and lives outside of the office. Ethical leadership is the polar opposite. A healthy work environment thrives because of ethical leadership.