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The Role of Ethical Leadership in Developing an Ethical Culture

Say What You Will Do, and Do What You Say

I have blogged before about ethical leadership. One of my discussions looked at ethical leadership in business while the other addressed the importance of ethical leadership in making ethical decisions. It’s always a good idea to revisit the concept of ethical leadership and why it’s important to instilling ethical values within an organization and developing an ethical culture because it is the essence of rightful behavior in organizations.

There are many definitions of ethical leadership. The one I like best comes from Indeed.

What is Ethical Leadership?

Ethical leadership is leadership centered around appropriate conduct through respect for ethics and values, as well as the rights and dignity of others. The concepts of honesty, integrity, trust and fairness are all critical to ethical leadership.”

According to Indeed, “ethical leadership can provide value to businesses by inspiring employees to be motivated and live up to the company’s values.” It follows that ethical leadership will lead to greater employee satisfaction and lower turnover rates.

Ethical behavior emanates from ethical leaders when they “walk the talk” of ethics. It is most likely that employees will follow the examples of their superiors who exhibit ethical leadership in decision-making.

The ethical leader understands that positive relationships are the gold standard for all organizational effort.  Good quality relationships built on respect and trust—not necessarily agreement, because people need to spark off each other—are the single most important determinant of organizational success.  The ethical leader understands that these kinds of relationships germinate and grow in the deep rich soil of fundamental principles: trust, respect, integrity, honesty, fairness, equity, justice and compassion. 

Fostering positive relationships provides benefits at three levels of organizational life.  It is important to individuals who come to work every day and engage in activities that can fall anywhere along a spectrum from rewarding and fulfilling to disempowering, toxic and debilitating. 

No less in need of empowering ethical relationships is the team, large or small, formal or informal, project-focused or maintenance-oriented—in every case it depends on supportive relationships among team members.  Finally, the organization with vast spans of communication and disparate areas of responsibility needs a bonding agent to make people feel they are making a unique and valuable contribution to the whole.  Ethical leadership across all three levels nourishes the relationships that empower human enterprise.

Characteristic Traits of Ethical Leaders

The characteristic traits of behavior of ethical leaders and how they create a culture of ethical decision- making follows:

  • Maintain honest relations with employees.
  • Subordinates will strive to perform more innovatively for the success of the organization.
  • Ethical leadership encourages job performance of employees and decreases turnover while increasing job satisfaction and employee work engagement.
  • Ethical leaders must be good communicators and promote transparency in decision-making.
  • Ethical leaders create an ethical climate that enforces core values.
  • Ethical leaders should dedicate themselves to act in accordance with ethical values that underlie the organization’s code of conduct.

Integrating Ethical Conduct Within Organizations Ethical leadership

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.

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 personal, emotional and financial rewards of a job well done. There is a shared understanding that success depends on a constellation of relationships, both internal and external, not all of which are under the organization’s control, but which it can influence through the way it operates from a platform of ethical principles.

The perception that followers have of managers in an organization, whether they are viewed as ethical leaders, depends on whether they are seen as moral persons and moral managers. Being a moral person is not enough to encourage ethical behavior of followers because of the distance between both parties. Moral managers gain legitimacy only if employees believe they are principled and caring and say what they will do and do what they say.

Blog posted by Dr. Steven Mintz, The Ethics Sage, on January 31, 2023. You can sign up for Steve’s newsletter and learn more about his activities on his website  (https://www.stevenmintzethics.com/) and by following him on Facebook at: https://www.facebook.com/StevenMintzEthics and on Twitter at: https://twitter.com/ethicssage.