The business environment is constantly changing. Businesses are restructuring, others are merging, and some are changing their strategies to accommodate new technology. Having ethics ingrained in these processes inspires change and the successful adoption of new strategies.
Ethical leadership with a team enhances respect, promotes high performance and leads to a motivated team. This detailed guide explores ethical leadership and why it is critical for business executives.
What is ethical leadership?
Ethical leadership is any guidance that promotes appropriate conduct through interpersonal relations and personal actions. Exhibiting ethical leadership means being an example of ethical conduct through one’s relationships and actions in the company. That also entails respecting the dignity and right of employees and being fair in decisions.
Creating an ethical work culture is also part of ethical leadership. The workplace should have a code of conduct with clearly stipulated rules. A leader should also exercise fairness when making critical decisions concerning their employees.
Additionally, every aspect of the organization or company should emulate top leadership principles. That involves elements of a business such as compensation, mentoring, promotion and performance reviews.
What are the principles of ethical leadership?
Some of the main principles of ethical leadership are:
Integrity
Leadership and integrity are intertwined. They form the foundation of who one is as a business leader.
Integrity shows one has strong moral principles and is honest and morally upright. It earns a leader confidence and trust. Employees and other stakeholders can have confidence in a leader’s ability if they believe they are committed to integrity.
A leader with integrity sets an example for the entire team. They do what is right when no one is watching, and their actions and words are consistent with the truth. Additionally, these leaders are reliable and treat everyone equally. Leaders with ethical integrity commit to the best interests of everyone involved by being fair and just.
Respect
Ethical leaders treat others with respect. This also includes a leader considering their employee’s values and decisions. Being respectful can also mean listening to a subordinates’ opposing views. A leader taking time to assure them and confirm their values and beliefs shows that they care about and respect them as human beings.
Justice
An ethical leader needs to be just. They need to treat their employees and other subordinates equally. Being just means only extending special treatment to some individuals if it is needed to execute justice.
Outstanding ethical leadership also entails eliminating bias based on aspects such as someone’s race, nationality or gender.
Honesty
Ethical leaders are trustworthy and honest. An honest leader shows subordinates that they are reliable and can be trusted to present facts without bias. Sometimes they may have to deal with unpopular opinions. However, being honest means conveying facts transparently despite the challenges. Being able to walk the talk shows others that one can lead by example.
Why is ethical leadership essential for business executives?
Practicing ethical leadership has an impact on employees and the company. Here is a look at the benefits of ethical leadership:
Leads to employee satisfaction
Employees appreciate it when their leaders respect them, treat them fairly and are willing to listen to their perspectives. Ethical leaders who exhibit these traits can help increase collaboration and maintain positivity in the workplace.
Promotes customer relationships
No one wants to associate with a company with multiple scandals. Implementing ethical leadership allows customers to view the leader as trustworthy, encouraging them to continue working with their business.
Having improved customer relations also boosts a business’s reputation in the market.
Enhances employee motivation
A business’s success depends on the performance of its employees. Companies with a strong emphasis on ethics foster a positive work environment.
In addition, practicing ethical leadership inspires employees and sets an example of the standard of integrity a leader expects from them — once employees understand that they are expected to be accountable, that boosts their performance and keeps their morale high.
Protects employees from burnout
Ethical leadership promotes happiness at work and improves job satisfaction. Employees who love the work environment and culture can meet their goals and help the company grow.
Business leaders can reduce burnout and stress by prioritizing workplace wellness. That can be done by creating a conducive environment with calming plants and photos. Additionally, leaders need to monitor
Workloads to ensure that employees can handle unreasonable workloads and a demanding schedule.
Encouraging employees to vacation can also help reduce stress and burnout. A big part of being an ethical leader is providing employee assistance programs. That can be mental health counseling, sponsoring gym membership or offering financial support. These programs promote productivity and can reduce turnover rates.
Increases the company’s profitability
The actions and words of a leader are crucial to leading a business to success. Safe legal practices are part of ethical leadership, reducing any legal complications that must be dealt with. The company’s profitability increases when one does not have to deal with legal issues as they are mainly focused on growing the business.
Helps to maintain positive public relations
Ethical leadership is not only how one acts or their words in the workplace. It also entails how they live their life and how people perceive them as a leader.
A good example is when a company is caught up in a scandal. The media is the first to report moral misconduct. That destroys a brand’s image and can push away potential investors and customers. Incorporating ethical leadership helps to maintain positive public relations and a good impression.
Promotes financial stability for a company
Business executives who practice executive leadership can prevent ethical issues like company scandals. Additionally, companies are more likely to gain more investors and partnerships if their leadership evokes confidence. That translates to more money and financial stability in the long term.
What are some ethical considerations of business leadership?
Businesses go through different transitions and changes. Leaders who strive to lead with integrity must incorporate ethics into their approach. Pursuing a doctorate in leadership, such the one available from Spalding University, is an excellent way to learn to develop more vital ethical leadership skills. One learns how to foster a collaborative work environment, interact with employees, enhance decision-making skills and be resourceful as a leader.
Here are more tips on how to integrate ethics into one’s leadership journey:
Be transparent and honest when communicating with employees
Miscommunication or lack of communication only leads to unresolved issues. With time, this only creates distrust and hostility.
Leaders with values and ethics need to be excellent communicators. They must ensure their company is a place where people can respectfully express their views. Open communication encourages employee engagement. When employees feel their leader values and care for them, they can perform their duties and are proud to be associated with the organization.
Ethical leaders are also clear on role clarification. They need to communicate to their subordinates about their responsibilities and expectations to ensure everyone on the team is on the same page.
Providing ethical guidance as a leader is part of their responsibility. How they communicate ethics, explain ethical rules and reward ethical conduct is also essential.
Develop an ethical framework for the organization
Business leaders must create an ethical decision-making framework to guide them and their employees on ethical decisions. The framework is a reference for employees and managers when they need to make tough decisions.
In most cases, a leader may do what they deem best at the time, while others may apply principles learned from personal experiences, religion or family. An ethical framework acts as the go-to reference, which helps to avoid decisions made from subjective or biased judgments.
Provide a fair and equal wage
There are laws that govern how companies and organizations provide employment opportunities and compensation. Business leaders must have a system that recruits a diverse workforce. An ethical leader also enforces policies that support fair and equal wages, regardless of gender, race or any other affiliation. Leaders must act with integrity, treating everyone fairly without favoring others.
Ensure a safe and decent work environment
Organizations run by unethical leaders only create a toxic work environment. These leaders take bribes, changing sales figures and ask business associates or employees for favors.
The focus of ethical leadership is ensuring that employees have a safe and decent work environment. A leader needs to model the type of behavior that they should also follow by being honest and practicing integrity. Implementing the principles of ethical leadership creates a friendly workplace culture, which leads to employee productivity and satisfaction.
Treat employees with respect
Business leaders need to foster a respectful workplace environment. That can only be done by avoiding discrimination based on gender, ethnicity, race or age. Companies need to have a policy that supports equality in the workplace and encourages an environment that respects people of all types.
Make sure there is a work-life balance
As an ethical leader, advocating for work-life balance helps to promote a healthy workforce. Business leaders can encourage work-life balance by setting an example. That includes separating personal priorities from work tasks, having interests that are not work-related, and setting reasonable work hours.
Ethical leadership also entails inspiring employees to establish boundaries. Employees should commit to work but still have a life outside work. Benefits like onsite daycare, telecommuting and gym membership allow employees to explore other activities.
Assign clear responsibilities and incentivize employees
When hiring, companies define employee responsibilities based on a job description. However, in some cases, these lines become blurry and employees end up with other duties outside their job description.
A leader must assign clear responsibilities and incentivize their employees to meet their targets. Ethical leadership is about ensuring workplace fairness and reasonable expectations regarding results.
Offer a supportive culture
Ethical leadership requires inspiring, motivating, leading and promoting accountability. Business leaders can help build a strong supportive culture where everyone acts with respect, fairness, honesty and transparency.
Within a supportive workplace culture, employees get to understand a leader’s expectations and clarify their roles. Furthermore, a supportive ethical culture enhances employees’ lives, ultimately contributing to the organization’s overall success.
Provide ethical training
Ethical leadership means sharing the same values and ethics with employees. As a leader, start by hiring the right people. Employing people with the required skills and whose values align with the company’s helps to create an ethical workplace environment.
Ongoing ethical training teaches employees to make sound decisions that align with their company’s culture. The training also enhances a company’s profitability as it helps employees make good decisions in service to their customers, colleagues and themselves.
How can business leaders improve their ethical leadership skills?
Adopting ethical leadership comes with its challenges. However, it is still possible to improve one’s ethical leadership skills.
Here are some ways to refine ethical leadership skills to promote social responsibility and create a successful business:
Define and align morals to that of the company
A crucial aspect of organizational development is aligning one’s leadership style with organizational values and ethics. What a leader might have been taught to be right and fair as a child may be questioned in today’s workplace setting.
That is why it is essential to ensure that one defines and aligns their morals with the organization’s. That enhances employee engagement and performance and fosters a supportive ethical workplace culture.
Encourage open communication
Being an ethical leader is all about transparency and encouraging employee feedback. A leader can motivate their employees to be more open by consistently asking them for their input, conducting anonymous surveys, or asking employees about solutions to specific problems.
Making open communication a part of a company’s culture can help them determine areas that need improvement.
Aim for continuous improvement
Sometimes leaders fall into a routine, and this may cause problems if they do not recognize changes that could be occurring. As an ethical leader, one should always strive for continuous improvement by observing changes and learning different ways to tackle unforeseen challenges.
Being in leadership necessitates learning, unlearning and re-learning. Learn from previous mistakes and amend the code of ethics policy to ensure everyone is on the same page. Continuous improvement can also involve participating in fellowships, taking extra courses and networking to get ideas.
Take ownership of one’s actions
One can only grow as a leader by owning up to their mistakes. Accept responsibility when an error occurs and find a way to fix the problem.
Be a role model
Ethical leadership involves realizing that some decisions have an ethical component. Talking to employees about ethical concerns is not enough. A leader’s actions need to match their words.
For example, a leader cannot hire a dishonest employee when they have been encouraging existing ones to value integrity and honesty. Ensuring one walks the talk by exhibiting these ethical principles creates trust. It also allows one to grow as a leader as they continually seek to improve on areas where they may be lacking.
Seek mentorship and support
Mentorship is vital in leadership as it allows business leaders to understand what excellent leadership is like. Getting mentorship from another ethical leader will improve one’s confidence in leading others and executing tasks effectively. Leaders also develop ethical skills they may not yet have acquired when they model a mentor’s ethical behavior. That also promotes ethical conduct in the workplace.
Mentors not only give advice but also act as a support system. Being an ethical leader can be overwhelming, and sometimes one may feel impatient, disappointed or discouraged. With a mentor, a leader can learn how to navigate such challenges.
Developing ethical resilience is something most leaders struggle with. Mentorship helps a leader to recognize ethical dilemmas, learn how to manage ethical problems and become aware of how their values should align with that of the organization.
Young leaders also benefit from ethical mentorship as they learn to avoid common ethical pitfalls. Mentorship also helps them become more courageous and feel comfortable in their role.
Benefits of ethical leadership
Ethical leadership boosts employee morale, fosters employee and customer loyalty, increases productivity in the workplace and results in profitability. Considering the above ethical considerations can help leaders realize how their words and actions trickle down to the employees and the company.
Hopefully, with these tips, one can now know what is required of an ethical leader and how they can improve their leadership skills to ensure employee satisfaction and increase the company’s profitability.
