Leading Ethically

Good leaders build, maintain, and revise the systems that support integrity in the workplace, but perhaps more importantly, they lead by example. They need to be knowledgeable and experienced in order to make good decisions that help create an ethical culture based on shared values and behaviors.

Understanding the role of leaders

A leader’s role is to guide and direct others toward the achievement of a goal. Leaders have the power and authority to motivate others and enforce the organization’s rules and policies, as well as their own viewpoints, and so are key in directing an organization’s corporate culture^[] and ethical stance. While most people think of the CEO as the most important leader within a company, the board of directors and mid-level managers play an important part as well.

Corporate culture—the mix of values, norms, behaviors, and artifacts (tangible signs) that help define an organization’s character.

Leading by example

Being an ethical leader is about far more than drafting, following, and implementing ethical codes. Through his or her actions, a good leader will promote an organizational culture that supports ethical conduct and reward employees for acting in ways that are consistent with the company’s values and ethical standards. This culture will permeate every aspect of the business from its public image and how stakeholders are treated, to the nature of the products sold.

Characterizing ethical leaders

Most strong, ethical leaders have certain characteristics in common. Developing these traits will help you to build an ethical corporate culture, loyal and happy employees, and a successful company.

• Ethical leaders have strong personal character; they possess robust principles that allow them to define a path and lead others along it.

• Ethical leaders have a passion for doing right—for their customers and their employees. Of course, they are not infallible, but they do necessarily begin with the right intentions.

• Ethical leaders recognize that good ethics are good for performance and lead to a healthy bottom line.

• Ethical leaders are proactive—they don’t just follow policies but make and shape them. This often requires courage—for example, when proposing an unpopular new direction.

• Ethical leaders consider stakeholders’ interests. They build trust across the board and profit from the loyalty that this inspires.

• Ethical leaders are positive role models in and out of the workplace. They match their talk about values with visible actions that demonstrate respect.

• Ethical leaders are transparent, forming relationships that are both honest and sustainable.

• Ethical leaders are good managers. They take a holistic view of the firm’s culture and working for a common good. They match their talk about values with visible actions that demonstrate respect.