Ethics is important in leadership because it establishes the moral standards and values that guide a leader’s behaviour and decision-making. An ethical leader sets a good example and fosters a culture of trust and accountability, which benefits the organization’s reputation, employee morale, and overall success. Making difficult decisions that are consistent with organizational values and principles, even if they are unpopular or financially challenging, is also part of ethical leadership. An ethical leadership contributes to the development of a sustainable and responsible organization that acts in the best interests of all stakeholders. This blog aims at highlighting the role of ethics in leadership.
What exactly is ethical leadership?
Ethical leadership entails individuals acting in accordance with a set of principles and values that are widely accepted as a sound foundation for the common good. Integrity, respect, trust, fairness, transparency, and honesty are examples.
Ethical leadership must be a deliberate choice. “To be conscious means to be awake, mindful,” writes Fred Kofman in his book Conscious Business. Living consciously entails being open to perceiving the world around and within us, understanding our circumstances, and deciding how to respond to them in ways that honour our needs, values, and goals.” “To be unconscious is to be asleep, mindless,” he continues. Consciousness allows us to face our circumstances and pursue our goals while remaining true to our values. When we lose consciousness, we are carried away by instincts and habits that may or may not be beneficial to us. We pursue goals that are detrimental to our health and happiness, we act in ways we later regret, and we produce outcomes that harm us and those we love.”
What are the benefits of being an ethical leader?
There are numerous reasons to be a moral leader.
Leaders can inspire those around them to act ethically on a collective level. Others will observe and act similarly if you set an example and provide guidance for ethical behaviour.
As a result, ethical leaders can positively influence many others by presenting them with a set of actions they can take for the greater good.
Being an ethical leader is critical for credibility and reputation on a personal level. It takes a long time to become a leader. Behaving unethically can knock a leader out of the A-league and severely harm their personal or company brand. Furthermore, unethical behaviour frequently erodes self-esteem, resulting in a suboptimal outcome and a missed opportunity to express one’s full potential.
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6 characteristics of ethical leadership
Ethical leadership entails many things, but it all comes down to these six main components.
Honesty. Honesty makes ethical leaders worthy of the trust placed in them by others. It entails leaders committing to presenting facts as they are, competing fairly, and communicating honestly with others.
Justice. To be fair, one must treat everyone equally, provide equal opportunities without favouritism, and condemn inappropriate behaviours and manipulations, as well as any other actions that may cause harm.
Respect. Ethical leaders value others, regardless of their position or distinguishing characteristics. This implies that they listen to all stakeholders, promote inclusion, and value diversity.
Integrity. Integrity is demonstrated when values, words, and actions are consistent and aligned. To demonstrate integrity, one must not only talk the talk but also walk the walk.
Responsibility. Accepting to be in charge entails accepting the power and duties that come with it, as well as always responding and being present in difficult situations.
Transparency. Transparency primarily concerns communication with all stakeholders. It entails maintaining an open dialogue, accepting feedback, and disclosing the information others require to complete their tasks.
What characteristics define an ethical leader?
“Being is the best way to do.” Lao Tzu’s
Leaders play an important role in businesses because they have been chosen to guide others. What do great ethical leaders do, and what ethical characteristics do they share?
They are aware of their internal compass and values.
The first characteristic of an ethical leader is self-awareness. Knowing their own values and principles allows them to make them visible to others, take positions, and enter negotiations with confidence.
They consistently exhibit ethical behaviour. Repetition builds reputation, and ethical leaders understand this. Leaders are vulnerable because the trust that people place in them can quickly erode if they misbehave—regardless of how well they have behaved in the past. Leaders must send consistent signals to demonstrate that people can continue to trust them.
Deviations from the ethical code are not tolerated.
If someone violates the Code of Conduct and the leader does nothing, it may imply that the Code of Conduct is unimportant. Ethical leaders make no exceptions in this regard, and they make it clear which behaviours will not be tolerated. They achieve consistency and credibility while avoiding confusion and doubts about accepted behaviours.
They express their concerns, even if they are unpopular.
Ethical leaders understand that ignoring critical details can have serious consequences. They carefully observe situations in order to identify potential problems. When confronted with a doubt or a quandary, ethical leaders voice their concerns, even if it means slowing down or generating more work.
They admit mistakes and, if necessary, share a recovery strategy.
If something goes wrong, ethical leaders do not hide or minimise the situation. Instead, they own their mistake, apologise, seek solutions, and share all potential recovery plans with stakeholders. This demonstrates that they care and are doing everything in their power to improve a bad situation.
They are ready to take full responsibility.
“The successful leader must be willing to accept responsibility for the mistakes and shortcomings of his followers,” says Napoleon Hill. If he tries to delegate this responsibility, he will lose his position as leader. If one of his followers makes a mistake and demonstrates incompetence, the leader must consider himself to be the failure.” In organisations, a lack of accountability leads to inefficiency, confusion, inaction, and a waste of time and resources. Through their words and actions, ethical leaders hold themselves accountable, take charge, and shape the present and future.
They are always present and speak on behalf of their teams.
Ethical leaders are present in both good and bad times, develop their teams, and stand up for others when necessary. When the storm hits, they are at the front, providing direction and assisting their teams in overcoming obstacles. They understand that they are there to serve the interests of their teams and organisations rather than their own.
They behave fairly.
Leaders must make numerous decisions and negotiate numerous contracts. Their actions clearly favour long-term victories over short-term gains. It also supports meritocracy and the fair treatment of all individuals, regardless of their status, ethnicity, age, or any other potential discriminating factor.
They practise what they preach.
Last but not least, ethical leaders are honest. They practise what they preach, and their values, words, and actions are consistent and visible to all. Their credibility and reputation would suffer if they did not hold themselves to the same standards that they hold others to. Leading by example is a conscious choice that requires daily focus, but it pays off like nothing else.
7 ways ethical leadership can have an impact on an organisation
Ethical leadership benefits organisations in a variety of ways.
Enhanced sense of belonging.
When corporate and individual values are aligned, and ethical principles are followed, everyone’s overall well-being improves. This creates a positive environment that reinforces and fosters ethical behaviours, creating a virtuous cycle in which everyone feels at ease and ready to give their all.
Improved customer relationships.
When customers perceive and witness ethical leadership and cultural values, they will believe they have made a wise decision to work with your company. This will encourage them to continue doing business with you while also enhancing your reputation as a fair market player.
Society and communities respect you. Organizations led by ethical leaders set a good example for others and are thus respected and valued. These are the types of companies that people want to work for, do business with, and model their own businesses after.
In times of crisis, assistance is provided.
The world is changing quickly, and businesses may face numerous challenges. People, on the other hand, want to see ethical leaders and the companies for which they work thrive. Having leaders who act ethically, with kindness and respect, can be the key to getting through difficult times.
When leaders are fair and just, team members have one less reason to leave. Ethical leaders create a positive environment for their employees by inspiring, developing, and establishing a culture of trust and respect. This results in significant benefits such as lower turnover, increased productivity, and loyalty.
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A strong emphasis on values and ethics fosters a positive work environment that promotes a better mood and greater understanding among employees. The stress and tensions of daily business are like the wind on a strong tree when the roots are strong. People usually feel the roots to determine whether they can rely on them and feel confident, or if they must maintain their guard.
Increased market stability.
Organizations with ethical leaders are less likely to experience sudden crises caused by internal factors. Typically, investors recognise and appreciate this.
When each team member understands that the company is operating ethically and for the greater good, they will want to contribute to the company’s mission.
Last words on ethical leadership
Leadership and ethics go hand in hand. While some people believe that there is a trade-off between being profitable and successful and acting ethically, this is simply not the case. Ethical people and leaders are critical success drivers.