What is Ethical Leadership? 

Being an Ethical Leader: Why It’s Essential for Success Today

70% of employees in the U.S. are unhappy because of negative management. 

So, while most leaders like to believe that they inspire their teams and instill a positive workplace culture, statistics prove that it’s not the case in most situations.

And one of the most common issues with leadership in many companies is the lack of ethical leadership practices that could shape how the organization operates. That’s because it’s easy to equate leadership with getting maximum results, even though that view can often mean worse outcomes for the company in the long-term future. 

But with ethical leadership, leaders can be empowered to make decisions they actually believe in, prioritizing the company’s core values above short-term results.

With that in mind, let’s look at some of the ethical leadership examples you could consider and the biggest benefits it can offer your business. But first, let’s define ethical leadership and what it means today.

What is Ethical Leadership? 

What is Ethical Leader?

Ethical leadership in business is the practice of leading a company in a way that’s in line with the ethics and beliefs that you stand for. In other words, it’s the willingness to do the right thing in your business even when the wrong choice might be much easier.

The main principles of ethical leadership also revolve around the willingness to treat the people around you with compassion and understanding, trying to put them in a position to succeed, and helping them overcome challenges.

While there isn’t a universally-held set of morals that can be listed, ethical leadership should strive to take the complex dynamics of a workplace environment and set an example of how to overcome various challenges in a way that creates positive change and helps nurture a better environment for everyone involved.

Although this type of leadership can have a massive impact on the company’s success, it’s also just as crucial for the leaders themselves. Being an ethical leader means that you stay true to who you are and don’t have to separate your job title from the person you want to be every day. 

And that’s something most people want to get behind, which is why the effort it might take to adopt ethical leadership principles is definitely worth it.

Examples of Ethical Leadership

Ethical leadership sounds good in theory. In fact, most leaders probably envision themselves as being ethical. At least more or less. But how does being an ethical leader look in practice? What types of traits does this type of leader usually represent?

Well, an essential quality of ethical leadership is being willing to trust your gut and go with the decision you feel is right. Leaders often find themselves under pressure, trying to navigate between various outcomes to minimize the damage and maximize profits. But only the leaders that stay true to what they believe in can enjoy the long-term benefits of ethical leadership.

Ethical leaders are also able to maintain the human element in all of the work relationships. Being able to empathize with your colleagues, subordinates, and partners helps you make the best decisions that don’t hurt others around you.

Finally, ethical leaders know that the customers should always come first, no matter what, and are willing to do whatever it takes to ensure that’s the case.

It’s often much easier to exploit the trust people place in your company for short-term gains, but only by ensuring that every customer walks away satisfied can you build a company that’s primed to succeed in the future based on its reputation.

In the end, the consistent theme behind ethical leadership is the willingness to make sacrifices if it means you do things the right way. Whether it’s building relationships, going the extra mile for the customers, or even responding to a crisis, the extra effort always pays off when you look at the big picture. 

Benefits of Ethical Leadership

The reason more leaders are taking a more ethical outlook on how they manage their company is not just that it feels right. 

This approach comes with numerous benefits that make it the only viable choice for companies that want to stay relevant, growing their following in the future.

Let’s explore some of the biggest benefits ethical leadership can offer below.

Builds Meaningful Relationships with Customers

what is an ethical leader

A good brand image is more important than ever. With people worldwide becoming more aware of who they buy from and the impact that businesses can have on the environment and communities, being conscious of how your customers see you should be a top priority for any savvy leader.

That’s why being an ethical leader is going to become even more crucial than it is today. Any compromises with ethics or values will come back to cause even the most loyal customers to turn their back, making the advantages that might have seemed worth the risk minuscule compared to the damage that will ensue. 

If you can be a transparent leader who can be trusted to do the right thing, those same core values can begin to be associated with your company as well, becoming ingrained in what your company is about and how it communicates with its audience.

In the long-term picture, you want your best customers to be those who enjoy your products or services and believe in what you stand for, wanting to align with those same values. 

These customers won’t run to your competitors at the first sign of a better deal and will be much more likely to work through any challenges they might face during their relationship with your company. 

This holds true whether you cater to millions of buyers or are trying to close enterprise sales deals, as the benefits of ethical leadership are essential in all relationships with customers, no matter if it’s an individual or a large corporation.

More Freedom for Big Picture Thinking

As a leader, one of the worst ways to use your time is to try and micromanage every detail of how your team gets their tasks done. Sure, there’s always the natural instinct to want to make sure they’re doing it correctly, but eventually, that also results in bad habits not only for you but for the people you work with as well.

Ethical leadership can help you become more trusting towards individual members of your team, allowing you to delegate tasks to them and believe that they will be able to figure it out without you watching over the shoulder.

Sure, there’s always a chance that something will go wrong, but that can also become a valuable learning opportunity, especially if you handle it well and help the person grow instead of reprimanding them. 

Meanwhile, as your employees see that they can experiment and discover their own solutions, you will eventually find them becoming more independent, more creative, and better suited for taking on even more complex assignments without your supervision.

As a leader, you will then be in an ideal position to leave many of the day-to-day operations to your team and focus on the big picture. You can spend more time thinking about how to grow your company, what avenues to pursue, and how you can set yourself and everyone else for success in the long-term future. 

Promotes Positive Workplace Culture

Being fair and ethical isn’t just a leadership style; it’s also a set of values that become ingrained in the company you are managing. 

When your team knows that you won’t compromise your integrity or place short-term goals above the company’s future, they will be much more willing to adopt those same principles, treat others with respect, and develop relationships built on trust and willingness to help each other succeed.

As a leader, you want your employees to be confident, relaxed, and motivated to achieve the goals that are set out. By showing them a leadership example based on ethical practices, you will see them adopt a similar approach, which will have a massive impact on your company’s culture. 

This, in turn, will make your current employees much more likely to stay with your organization for a long time and also help attract top talent in your industry from your competition.

Better Work Satisfaction

As a leader, you need to think about not just the company’s success but also whether you are satisfied with what your career represents. Having to compromise your ethics can bring short-term advantages, but it also means that you won’t be able to honestly say you’re proud of your work and what you stand for.

Meanwhile, ethical leadership ensures that you can always stay honest with yourself and others when making decisions regarding the company. If you put being ethical first, most decisions become relatively easy, even if they can have short-term consequences that might be perceived as unfavorable.

In my course, Managing Happiness, I focus a lot on achieving happiness through your career and personal life by setting clear goals, as well as defining your vision and core values.

Ethical leaders who think about the bigger picture and the consequences that their actions can cause have a much better chance of achieving their career goals and ending up in a place where they want to be. That’s not just because of the results you can achieve but also because you will attract people with the same values, who will be a joy to work with. 

Nurtures Ideas

As a leader, you probably know just how important it is to allow innovation and new ideas to develop. But unfortunately, rigid relationships between superiors and subordinates can often stifle creativity and make team members less likely to come forward with suggestions.

In fact, leaders who aren’t open to listening to what their team has to say or even discouraging experimentation and opinions will find that employees become less flexible and more reliant on constant supervision.

Meanwhile, if you take an ethical leadership approach, you will likely be much more open to hearing ideas from your employees. In fact, you might even want to actively encourage people to speak up, come to you with their ideas, and offer suggestions on what could be improved.

Sure, as a leader, it’s your job to evaluate which ideas to pursue, but it all starts with creating an inclusive and collaborative environment where roles become blurred and different people can showcase their vision and leadership if they have something to offer at that time. 

Bottom Line

Ethical leadership is one of the best ways to ensure both personal and company-level growth. It can help make better decisions, empower employees, and put a focus on the company’s long-term success instead of short-term profits.

What do you think are the most important aspects of ethical leadership in business? And how can today’s leaders become more in-line with their core values? Share in the comments below!

I’m a serial entrepreneur and I write about things I have learned along the way. I’m passionate about helping entrepreneurs and executives to find success and harmony in business and in life.

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