ETHICAL LEADERSHIP: Explained, Attributes, and Importance

Ethical Leadership
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Worldwide, we see business and governmental leaders consistently engaging in unethical practices. These are the types of leaders whose actions hurt many people or society on purpose. It’s clear that we need “ethical leadership,” or leaders who stick to a strict code of ethics and don’t make any exceptions. Those who follow ethical leaders are more likely to be loyal, trustworthy, and motivated to do good themselves. Another important part of being an ethical leader is being aware, which is the same as being conscious. “We are consciously living,” which means being aware of our surroundings and inner world, trying to make sense of our experiences, and making choices that align with our deepest convictions and strongest desires. In this article, we will discuss ethical leadership in business, its principles with an example, and how one can be an ethical leader.

What Is Ethical Leadership?

Ethical leadership is the act of doing the right thing both at work and outside of it. Its primary focus is on moral development and virtuous behavior. Through their words and deeds, ethical leaders demonstrate their principles.

Ethical leaders do not look the other way when misconduct occurs, especially when doing so could benefit their companies. To be an ethical leader, you must show integrity and do what is right. When leaders do the right thing, they set an example for the rest of the organization.

In today’s business world, ethics are becoming more important and are being talked about more. In the business world, it is important to understand, train, and recognize leaders who act in an ethical way. To be in charge in the business world, you need training in ethical leadership. When you have a position of authority in an organization, you have a special obligation to set a good example for your subordinates. It’s only possible to be an effective leader with integrity, morality, and ethics.

Ethical Leadership Example 

The success of a company is heavily dependent on the caliber of its leadership. In the eyes of the people who work for them, a company’s leaders are in charge of defining its culture and ethos. It is, therefore, essential that leaders in the workplace act ethically. Here are the top ethical leadership examples: 

#1. Don’t Put Up With Unethical Behavior

There will be no leniency under a “zero-tolerance” policy. Any employee who violates this policy will get the same disciplinary action.

Ethical leaders have a “zero tolerance” policy for ethical violations because they know it’s the only way to keep a high level of ethics in their company. As a result, they can’t expect their staff to behave ethically and ignore any wrongdoing on their part.

Ethical leaders may show their staff that they want them to do the right thing at all times, even when no one is looking, by enforcing a “zero-tolerance” policy.

#2. Employ Responsible People

Another example of ethical leadership is finding areas of agreement with employees, regardless of whether they share the same morals or not.

To do this, the first step is to choose candidates whose values and mission fit well with those of the company. Employees should be reminded of the organization’s core values through regular training sessions and a clear, concise mission statement.

Ethical leaders also have to be honest with their teams about their own morals and why they make the decisions they do. By doing this, companies can create an environment where employees trust and respect each other and feel free to discuss ethical issues.

#3. Client Obligations

For me, putting the customer’s needs first is the essence of ethical leadership. This entails teaching your employees to put the needs of their customers ahead of their own. For example, we’ve learned that it’s important to answer customer service questions within 12 hours to keep your customers happy. That, to me, is the essence of ethical leadership: making it clear to staff that their primary loyalty should lie with the customer, not the boss.

#4. Put Out Yourself as a Model

Being an ethical leader entails more than just leading by example. It’s not just about setting expectations for others but also about meeting your own. Leaders with integrity set a high bar and insist that everyone follow it.

Furthermore, ethical leaders count on their followers to set an example. Leaders may establish a trustworthy culture by setting a good example. To the extent that workers observe their superiors’ dedication to doing the right thing, they are more likely to do it themselves.

Therefore, ethical leadership is crucial to fostering a happy and effective workplace.

#5. Keep Fairness and Respect

To lead with integrity, one must constantly act fairly and considerately toward others. The same goes for dealing with coworkers and other people in similar positions as you would expect to be dealt with, regardless of factors like gender, race, or age.

Ethical leaders respect their teams by actively listening to them, showing empathy, and giving everyone on the team equal credit for the results. They can weigh different interests logically and make decisions that are good for everyone.

Leaders inspire trust and respect among their staff by acting ethically.

#6. Convey Ethical Values

One of the most important qualities of a moral leader is the capacity for clear and persuasive speech. Ethical leaders must be able to convey their ideas and goals succinctly and clearly.

To reach this goal, you need to practice and get better at skills like public speaking, running meetings, and writing that is clear and to the point.

Ethical leaders also need to be adept at connecting with their teams. Principles of fairness, integrity, and trust should underpin these interactions.

Open lines of communication lead to strong relationships, which in turn make for a strong and effective team. Because of this, it is important for ethical leaders to keep lines of communication open.

What Are the Three Major Elements of Ethical Leadership?

There are many parts to ethical leadership, but these three are the most important:

  • Honesty: When a leader is honest, others are more likely to place their trust in them as an ethical leader. It indicates that leaders are willing to commit to communicating honestly with others, playing fair with their competition, and presenting the facts as they are.
  • Justice: To be fair means to treat everyone the same, to provide opportunities without bias, and to denounce inappropriate behaviors and manipulations, in addition to any other activities that could potentially cause someone harm.
  • Respect: Respect for others is an essential quality for ethical leaders, regardless of the status of those around them or the distinguishing features they possess. This indicates that they pay attention to each stakeholder, work to include everyone, and place high importance on diversity.

Ethical Leadership in Business

Many American businesses are emphasizing ethical leadership to prevent another financial crisis like the Savings and Loan Crisis, the Subprime Mortgage Meltdown, or a billion-dollar Ponzi scheme.

Leaders who compromise their morals might permanently stain their organizations’ reputations. Their lack of honesty costs the company money, hurts the reputation of its brands, and hurts relationships with customers, workers, and investors.

Today, ethical leadership in business is important because it can help with many different parts of a business, such as hiring, financial reporting, product development, and keeping track of customer information. The media also appears to report that businesses led by ethical leadership and utilizing ethical business methods have higher success rates

Leaders, both those who are already in charge and those who want to be, can help their businesses grow by learning and using leadership skills that focus on doing the right thing. Experience and education, such as a master’s in management and leadership, can help a leader develop the ethical skills necessary for success.

The Importance of Ethical Leadership in Business and How to Implement It

To be an ethical leader requires more than just adhering to a set of rules and regulations. Integrating ethical principles into leadership practices calls for deliberate action.

#1. Create a Group of Employees Who Share Your Values

Companies and their leaders who are widely recognized as sharing a set of core values are more likely to attract employees who share those values. A firm’s public stance on important issues might be a selling point when trying to fill open positions.

In addition to improving profits, investing in a workforce that embodies a company’s core values can have a positive impact on those numbers. 

#2. Create an Open and Honest Environment

Good leaders are able to connect with people, are trustworthy, and treat others with dignity and respect. Leaders who are honest with their staff and who solicit input through open channels of communication are more likely to succeed in creating a welcoming work environment.

When there is open communication between employees and management, productivity increases. If a company’s owner is having financial difficulties or could use some advice, telling their staff the truth is the best course of action. Leaders that are honest about their struggles to bring in customers, meet payroll, and other pressure points will have more support from their teams. When leaders are transparent and human with their staff, morale and productivity soar.

#3. Create and Follow a Code of Ethics

A company’s code of conduct lays forth the standards of behavior it requires of its personnel in the workplace and in public. In many circumstances, a yearly review of this document is performed to guarantee continued conformance. When a company has clear regulations and processes in place, it is simpler to maintain order and harmony among employees.

What Are the Characteristics of Ethical Leadership?

In order to be an effective leader, you need to exhibit the following five ethical characteristics:

#1. Master Emotional Competence

Teachers often refer to the saying, “They don’t care about what you know until they know you care,” when preparing for the first day and week of class.

It helps to have a lot of experience, a lot of knowledge, and a lot of brains. However, as a leader, you won’t earn trust and build relationships with your team members unless they see that you care and feel your empathy, listening, curiosity, self-awareness, healthy limits, and resilience.

In times of stress, change, and pressure, your team will be able to rise to the challenge more quickly and confidently if you have taken the time to display emotional intelligence and build rapport with them. Emotional intelligence serves as the bedrock of productive groups. A leader who aspires to lead ethically in order to foster expansion and creativity must possess this ability.

#2. Aim for Honesty and Accountability

A leader with ethics is one who is honest and open with their followers. They advocate for moral values and actually demonstrate them in their daily actions. As part of our leadership development curriculum, we stress the need of holding ourselves and others to high ethical standards, such as treating others with fairness, dignity, and respect regardless of their position. In addition, they learn to take constructive criticism in stride and adapt their approach based on the advice and input they receive.

#3. Maintain Sincerity and Authenticity in Your Conversations

Sincerity is at the heart of everything ethical leaders do, from their interactions with team members to the management of their own time and other commitments. In this way, they can be sure that they are treating every circumstance with objectivity and realism, and they may also inspire others to do the same through their honesty.

One way leaders can adopt these characteristics is by practicing transparent, two-way communication with their employees and superiors. This will help everyone on the team be on the same page and prevent anyone from feeling left out.

#4. Always Aim for Integrity

Because it covers so many other honorable values like honesty, openness, responsibility, and kindness, I believe that integrity is the most admirable characteristic that every ethical leader should have.

How Can You Be an Ethical Leader?

Too often, leaders fail to appreciate the extent to which their teams learn from observing their own actions. Yet leaders are by definition role models, with followers looking up to them and assuming their actions are the norm. There is no clear formula for ethical leadership, and it is not something that can be taught. Here are ways one can be an ethical leader:

#1. Maintain Individual Accountability

Honest leaders establish boundaries for both their own and their followers’ actions. Instead of pointing fingers, they look for solutions. When they make a mistake, they take responsibility for it and don’t pass the buck to anyone else. Unless you’re willing to put accountability on yourself, you can’t expect others to do so.

#2. Maintain your moral code

When it comes to questions of corporate ethics or morality, Corporate leaders with integrity don’t procrastinate. In these matters, they always act in a consistent and predictable manner. They do not compromise their morals in favor of ease or popularity. Moreover, these principles serve as a point of reflection whenever people must make difficult choices. Honoring others, respecting others, and displaying integrity are not ambiguous concepts in this complex society. Either you perform the action or you do not.

Simply put, if you want to create a morally sound business, you should lead by example as an ethical leader. Make your values known and central to your decision-making process. Tell me what you’re thinking. Always look for leaders who share your values. You shouldn’t defend an immoral person only because they bring in a lot of money. No one will remember the actual numbers. It will never be revealed how they were earned.

#3. Learn to Pay Attention to the Things Around You

A leader with external awareness considers the effects of their actions on others and on society as a whole, rather than focusing just on their own world. Delivering value to the customer, investing in your employees, dealing fairly and ethically with your suppliers, supporting the communities where you work, and generating long-term value for shareholders are the five commitments you need to learn as an ethical leader. Any leader would greatly benefit from such an emphasis on ethics. Also, read ETHICAL INVESTING: Definition, Types, Pros, and Cons.

#4. Prioritize the Needs of Others Over Your Own

Ethical leaders always prioritize the needs of their followers.  Consider the bonds you’ve built in your own life and why you’ve worked to keep them strong. Rather than what they can provide you, do you value them for who they are? Better still, how do you feel they have shaped you as a person?

Again and again, it has been demonstrated that employees have more regard for managers who are not afraid to recognize their own shortcomings. Honest leaders who aren’t hesitant to admit mistakes earn respect.

What Is the Importance of Being an Ethical Leader?

Many successful business cases and clinical studies have demonstrated the positive effects of ethical leadership. Some of the importance of having ethical leaders are:

#1. Attracting Investment

The likelihood of attracting investment increases when a company has a strong moral compass, as this engenders trust in the minds of potential financiers. They are making a favorable impression on the market and building a strong reputation for their brand.

Ethical leadership, in the eyes of the public, is the promotion of a company that supports fair causes and takes care of its employees. It promotes a favorable impression of the company, its employees, and its output.

#2. Employee Loyalty

Practicing ethical leadership means earning the respect and loyalty of your employees. Boosting employee loyalty is possible if workers have less reason to be fearful or opposed to the company’s future.

#3. Collaborative and Supportive Workplace

Leaders who set an example of ethics in the workplace can have a significant impact on productivity and morale. An Ethical leader can shape the workplace in ways that inspire and motivate people to behave ethically by setting a good example themselves.

#4. The Reputation of the Brand Increases

In today’s fast-paced, digital world, where a single image can completely devastate a business, it is more crucial than ever to uphold moral brand practices. Ethical leadership may greatly enhance the public’s perception of a company by encouraging its employees to operate in a moral fashion.

Principles of Ethical Leadership

Any business would benefit greatly from having an ethical leader on board, and it is the responsibility of every organization to do so.

Ethical leaders, because of their qualities, can improve the workplace for the better. They have the potential to increase productivity, assist the bottom line, and promote morale in the workplace. The end outcome is increased team performance, decreased turnover, and happier employees. Here are the five principles of ethical leadership:

  1. Accountability
  2. Honesty
  3. Respect
  4. Fairness
  5. Service


In conclusion, ethical leadership is a style and set of principles of management that are widely acknowledged as providing a firm basis for the greater good.

Putting ethics first is not always the best course of action for a leader to take in the actual world. Unscrupulous leaders may reap some benefits from this, but it corrupts, demotivates, or repels their followers and does not speak well of their leadership abilities.

Ethical Leadership FAQs

How do improve your ethical leadership skills?

  • Address moral quandaries when they emerge.
  • Demonstrate courage
  • Seek out probable “trigger” circumstances

What are the 5 P's of ethical power?

The Five P’s of Ethical Power: purpose, pride, patience, persistence and perspective.

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