Walking the Talk of Ethics

Ethical leadership in business is more important today than ever before. Businesses must cope with delays in the supply chain, rising interest rates, growing inflation, and the remnants of Covid which, in some cases, has led to a demand by employees for more remote work and less in the office. Today’s blog examines the qualities of an ethical leader and how they come together to create an ethical organization culture, the key to ethical behavior in all kinds of organizations.

Qualities of an Ethical Leader

Management expert, John Maxwell, characterizes leadership this way: “A leader is one who knows the way, goes the way, and shows the way.” Leaders lead others by example. They set an ethical tone at the top. They lead with an attitude of “Do what I say as well as what I do.” Ethical leadership can be evaluated through a leader’s vision: Visions are not simple goals, but rather ways of seeing the future that implicitly or explicitly entail some notion of the good.

The ethical leader understands that positive relationships built on respect, openness, and trust are critical to creating an ethical organization environment. Ethical leaders pay more attention to employees’ opinions and support their voice behavior. The underlying principles of ethical leadership are fair treatment, honesty, integrity, justice, responsibility, accountability, and compassion.

Ethical leaders strive to honor and respect others in the organization and seek to empower others to achieve success by focusing on right action. An ethical organization is a community of people working together in an environment of mutual respect, where they grow personally, feel fulfilled, contribute to a common good, and share in the internal rewards, such as the achievement of a level of excellence common to a practice as well as the rewards of a job well done.

Management Style

Ethical leadership is a management style that works for any organization. These are the top benefits for a company that relies on ethical leadership according to Kiely Kuligowski of the Business News Daily:

• Positive culture: Employees' morale improves when they work behind an ethical leader. Staff won't feel as if they are helping a corrupt person earn even more money. Ethical leaders have the capacity to inspire those working with them to perform at their peak.
• Improved brand image: The leaders of the company should show the best that your brand has to offer.
• Scandal prevention: Ethical leaders don't create bad PR for a company. Company scandals can be damaging to an organization's image and cause customers to turn to a competitor.
• Loyalty: Both employees and customers are more likely to remain loyal to companies that hire ethical leaders.
• Improved emotional well-being: Workplace stress can hurt productivity levels at a company. If leadership is toxic, then efficiency will decrease.

Integrating Ethical Leadership into the Environment

Linda Fisher Thornton, in her book, 7Lenses: Learning the Principles and Practices of Ethical Leadership, contends that the key to having an ethically run company is employing morally upstanding leaders. Thornton offers practical advice on the most important actions leaders can take to integrate ethical conduct into their organizations, including:

• Face the complexity involved in making ethical choices: Openly discuss the ethical gray areas and acknowledge the complexity of work life. Be a leader who talks about the difficult ethical choices, and help others learn to take responsibility for making ethical decisions carefully.
• Don't separate ethics from day-to-day business: Leaders must make it clear to their employees that ethics is "the way we operate" and not a training program or reference manual. Every activity, whether it is a training program, a client meeting or an important top management strategy session, should include conversations about ethics.
• Don't allow negative interpersonal behaviors to erode trust: Make respect a load-bearing beam in your culture. Cultivate a respectful environment in which people can speak up about ethics and share the responsibility for living it. Build trust, demand open communication and share the ownership of organizational values.
• Don't think about ethics as just following laws and regulations: Leaders need to take action and show consumers and other stakeholders that they are actively engaged with ethical issues that matter. Recognize how ethics influences consumers' reasons to buy from you, and demonstrate a commitment to go beyond mere compliance with laws and regulations.
• Don't exempt anyone from meeting ethical expectations: Allow no excuses. Make sure that no one is exempted from meeting the ethical standards that are adopted. Maintain the status of ethics as a total, absolute, "must do" in the organization. Hold everyone, particularly senior leaders and high profile managers, accountable.
• Celebrate positive ethical moments: Be a proactive ethical leader, championing high ethical conduct and emphasizing prevention. Managers should talk about what positive ethics looks like in practice as often as they talk about what to avoid.
• Talk about ethics as an ongoing learning journey, not a once-a-year training program: Integrate ethics into every action of the organization — everything people do, touch or influence. Talk about ethics as an ongoing learning journey, not something you have or don't have.

Benefits to the Organization

The key to developing ethical leaders is to focus on developing ethical competencies including acting with honesty and integrity, being reliable and dependable, being true to your word, being willing to make mistakes, taking responsibility and clean up after messes, and empowering others to assume leadership roles when vacancies exist in the organization.

Ethics and leadership go hand-in-hand. Some believe a business can’t be both ethical and profitable. There is no evidence to support this contention.

To engage your employees in ethical behavior through your role as an ethical leader, contact me to develop a program that is organization-specific and focuses on ethics and leadership.

Blog posted by Dr. Steven Mintz, The Ethics Sage, on April 28, 2022. You can sign up for his newsletter and learn more about his activities at: https://www.stevenmintzethics.com/. Follow him on Facebook at: https://www.facebook.com/StevenMintzEthics and on Twitter at: https://twitter.com/ethicssage.