Leaders in organizations hold the power to guide the attitudinal change and ethical behavior of employees—by establishing standards, modeling (setting a good example), and enforcing consequences.
When executives bend the rules or turn a blind eye to bad behavior, the policies lose value and executives lose the respect of employees. This opens the door to a range of unanticipated issues, as employees look to ethical norms outside stated policy and beyond the executives’ control.
Leaders are expected to act as role models and enforce discipline. It will be disgusting if they are the ones responsible for a large share of workplace misconducts.
Leaders transmit ethics by building benevolent relationships and teaching others how to think about ethical questions, empowering ethical behavior among employees, and growing future ethical leaders.
WHAT IS ETHICAL LEADERSHIP?
Ethical leadership is leadership centered on appropriate conduct through respect for ethics and values, as well as the rights and dignity of others.
ATTITUDINAL & ETHICAL PRINCIPLES FOR BUSINESS EXECUTIVES
All personnel must be committed to telling the truth in all forms of communication and in all actions. This includes never purposely telling partial truths, selectively omitting information, making misrepresentations or overstatements. Honesty also means reliably sharing both good and bad news with equal candor.
All dealings and relationships must be founded on a conscious commitment to fairness, treating others as you would like to be treated. Fairness requires treating all individuals equally and courteously, never exercising power arbitrarily and never exploiting weaknesses or mistakes for personal or corporate benefit.
Demonstrated by a conscious effort to set a positive example of ethical behavior, leadership is a commitment to excellence through ethical decision-making. Businesses and business executives maintain their leads by constantly improving operational efficiency, worker satisfaction and customer approval.
Organizations and personnel demonstrate integrity through a consistency between actions and words that inspires trust and credibility. Integrity also means keeping promises, honoring commitments, meeting deadlines and refusing to participate in unscrupulous activities or business dealings.
Fostering a business environment of empathy and compassion requires a commitment to being kind and caring toward all personnel, business partners and customers. Business goals must be benevolent, ensured by spending enough time to understand the needs and sensitivities of others, including the local community.
Respect is demonstrated by a full commitment to the human rights, dignity, autonomy, interests and privacy of all personnel. It means recognizing that everyone deserves equal respect and support for sharing ideas and opinions, without fear of any penalty or form of discrimination.
Employees exhibit responsibility by taking full ownership of their jobs, striving to be conscious of the emotional, financial and business consequences of their actions. Taking their responsibilities seriously also demonstrates employee maturity and ability to do a job without needing strict supervision.
Loyalty is proven by never disclosing information learned in confidence and by remaining faithful to coworkers, clients, business partners and suppliers. Loyal employees avoid conflicts of interest, help build and protect the good reputation of their company and help boost the morale of their coworkers.
Organizations must fully comply with all applicable laws and codes from local, state and federal agencies. Law-abiding businesses and personnel also adhere to industry and trade regulations, marketplace standards and any additional mandatory organizational policies, practices and procedures.
Accountability requires a total commitment to the ethical quality of all decisions, actions and relationships. High expectations for ethical behavior drive business practices when an organization and its personnel are held accountable to fellow employees, consumers, the local community and the wider public in general.
Committing to transparency requires making business information and policies available to appropriate groups, such as financial investors, personnel and consumers. It includes, for example, sharing criteria for price hikes, wages, hiring, granting promotions, addressing workplace infringements and firing employees.
12. ENVIRONMENTAL CONSCIOUSNESS
Organizations and personnel demonstrate a commitment to the environment by helping mitigate the effects of global climate change. Beneficial actions include reducing the negative environmental impact of doing business by improving energy efficiency to help lower carbon emissions, reducing water usage and reducing waste.
ETHICAL LEADERSHIP EXAMPLES
There are several types of ethical leadership behaviors you can practice to develop this soft skill in different settings:
Set an example
Publicly champion the importance of ethics
Make decisions based on values
Be aware of values
Establish zero tolerance for ethical violations
Practice justice and respect
Hire ethical employees
1. Set an example
Ethical leadership is about walking the walk as much as it is about talking the talk. Ethical leaders have high expectations for their employees, and they hold themselves to the same standards. Leaders also expect other members of their team to lead by example.
2. Publicly champion the importance of ethics
Ethical leaders focus on the importance of ethical standards and work to educate their teams and peers about their importance. They seek to integrate these values into every facet of their team and company.
3. Communicate ethics
Ethical leaders need to be good communicators. They should become comfortable speaking in public, leading meetings and writing communications that clearly articulate what they are trying to convey. Good relationships between leaders and their teams are built on fairness, integrity, and trust. Ethical leaders are effective at building these relationships via communication.
4. Make decisions based on values
Ethical leaders assess each decision before implementing it to make sure that the decision accords with the organization’s mission and values. They will only initiate such decisions if the ethical criteria are met.
5. Be aware of values
Ethical leaders are aware of their values and the expectations that they place on themselves and their employees. They also communicate these values clearly so that they are widely understood by everyone in an organization.
6. Establish zero tolerance for ethical violations
Ethical leaders do the right thing at all times—not just when it is convenient or someone is watching—and they hold their employees to that same standard. For this reason, they cannot tolerate any sort of ethical violation. Implementing a zero-tolerance policy is helpful in conveying the leader’s expectations of themselves and others.
7. Practice justice and respect
An ethical leader should always behave with fairness and respect for others. They do not play favorites. They treat peers and employees in an egalitarian way regardless of the employee’s age, gender, nationality, ethnicity or any other factor that could prompt unfair treatment. Ethical leaders demonstrate respect for team members by listening attentively, being compassionate, considering opposing viewpoints fairly and valuing their contributions equally.
8. Hire ethical employees
It is important for ethical leaders to establish common ground with their team, whether or not they have precisely the same ethical values. This starts with the hiring process and is maintained throughout an employee’s time at a company by the organization’s vision statement and ongoing training.
Ethical leaders consciously work to hire employees who are aligned with the leader’s and the company’s values, as well as those who possess the right skill set and experience for the job. They seek to maintain a respectful and diverse work culture where employees are aligned around particular ideals and values. In fact, it can be helpful from an ethics standpoint to assemble a team with diverse backgrounds and experiences that will bring different things to the table.
HOW TO IMPROVE YOUR ETHICAL LEADERSHIP SKILLS
You can improve your ethical leadership skills with time, attention and practice. Start by identifying your strengths in ethical leadership and then build a plan to improve from there. Following these steps will improve your ethical leadership skill set:
1. Identify potential “trigger” situations
Identify situations such as hiring, firing, purchasing or promoting that seem to attract ethical dilemmas at your company or elsewhere. Recognizing when ethical dilemmas are likely to arise can help you be more attuned to the risk and to think carefully about how to behave with integrity.
2. Deal with ethical dilemmas when they arise
Identifying potential dilemmas is one thing, but dealing with them when they arise can be more difficult. There are a few steps you can take to deal with such dilemmas:
Prepare in advance: Visualize how you might respond to theoretical scenarios so you can think about the ethics of such instances ahead of time. In a crisis, you may have less time to make a decision, so this kind of rehearsal can be helpful.
Assess the evidence: Whenever possible, take time to carefully weigh all of the information you receive about a situation. Assess whether someone has definitely taken an unethical action before you react.
Get evidence: It is often helpful to talk through an ethical dilemma with a friend, mentor or even a spiritual advisor. Assessing advice rationally can help you to make important ethical decisions.
3. Demonstrate courage
Sometimes you will need to make a decision that will leave you wondering afterward whether you did the right thing. Even when you do know that you made the right choice, you or your team could suffer unpleasant effects as a result even of an ethical decision. For example, if you learn of irregular accounting in your firm and inform an auditor, this could lead to someone being fired. Even though you know that the decision you made was correct, it might be painful to see someone lose their job.
However, this type of situation can help you to learn to trust your instincts, release your anxiety and assess each situation logically rather than emotionally.
THE IMPORTANCE OF ETHICAL LEADERSHIP
Ethical leadership can have positive effects on a business environment at three levels: the individual, the team and the overall business or organization. We review each level briefly below.
1. Ethical leadership importance to the individual
At the individual level, ethical leadership can help maintain a positive work environment for each individual. Ethical leaders can inspire employees to follow their example. Positive communication among co-workers as a result of ethical leadership can in turn influence productivity and improve each individual’s attitude in the workplace.
2. Ethical leadership importance to the team
Ethical leadership can also improve team dynamics and overall morale within the unit. Ethical leaders help team members to communicate and get along with one another, which in turn affects the team’s performance. Strong ethical leaders set an example for their team.
3. Ethical leadership importance to the organization
Finally, the overall health and well-being of an organization can be deeply affected by ethical leadership. The leaders should foster an environment of collaboration and mutual respect, one that allows individuals to grow and contribute to the organization’s overall goals.