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Ethical Leadership: Guiding with Integrity and Values

Ethical Leadership: Guiding with Integrity and Values

In a business world where many organisations appear to have lost their way and leaders chase profit over purpose, the concept of ethical leadership has never been more crucial. Ethical leadership involves steering a team or organisation with an unwavering commitment to moral values and principles. This leadership style not only ensures success but also fosters a positive and trustworthy environment.

Why is understanding the value of ethical leadership (apart from the more obvious values) important? Because many employees who will form the future of leaders or growth in organisations are known as Gen – Z. Perhaps more than any other generation, Gen-Z (born 1997 or later) is fuelled by purpose. Having experienced a global pandemic, economic recessions, and major cultural shifts during formative periods in their lives, they see the world differently. They’re passionate about solving societal problems, and they expect the places they work to have similar beliefs. A 2021 Ernst & Young survey shows that almost two-thirds of Gen-Z feel it is “very or extremely important” to work for employers that share their values, as their work life is defined by value, not money.

What is Ethical Leadership?

Ethical leadership refers to practising honesty and virtue in a leadership role. Ethical leaders exemplify integrity, fairness, and ethical behaviour in both their personal and professional actions. They prioritise the well-being of their team, stakeholders, and society at large, ensuring their decisions and actions align with ethical standards and values.

The 5 Ethical Principles of Leadership

1. Respect for Others: Ethical leaders show respect for all individuals, valuing their contributions and treating them with dignity. This principle fosters a culture of mutual respect and collaboration.

2. Service to Others: Emphasising the leader’s role as a servant to their followers, this principle focuses on the needs and development of team members. Ethical leaders prioritise the greater good over personal gain.

3. Justice and Fairness: Ethical leaders strive to ensure fairness and justice in their decisions and actions. They are committed to equity, providing equal opportunities, and making unbiased decisions.

4. Honesty and Transparency: Being honest and transparent is crucial for building trust. Ethical leaders communicate openly, admit mistakes, and share information truthfully, fostering a culture of trust and accountability.

5. Community Building: Ethical leaders endeavour to build a sense of community within their organisation. They encourage collaboration, foster strong relationships, and create an inclusive environment where everyone feels valued.

Qualities of a Good Ethical Leader

A good ethical leader embodies several key qualities:

Integrity: Adhering consistently to moral and ethical principles, even when faced with challenges or unpopular decisions.

Empathy: Understanding and considering others’ perspectives and feelings.

Accountability: Taking responsibility for actions and decisions, holding oneself and the team accountable.

Courage: Possessing the bravery to stand up for what is right, even in the face of adversity or opposition.

Vision: Having a clear vision of ethical goals and inspiring others to achieve them through ethical means.

Remaining true to these qualities can be challenging, when conflicting stakeholders, decisions and outcomes need to be balanced as a senior leader.  In a nutshell, “Ethical leadership means doing the right thing even when no one is watching.”

Why is Ethics Important in Leadership?

Ethics in leadership is vital for several reasons:

Trust Building: Ethical leadership builds trust among team members, stakeholders, and the community. Trust is fundamental to any successful relationship or organisation.

Reputation: Organisations led by ethical leaders tend to have better reputations. This can attract talent, customers, and investors, contributing to long-term success.

Sustainability: Ethical decisions often lead to sustainable practices that benefit the organisation and society in the long run.

Conflict Resolution: Ethical leaders are better equipped to handle conflicts fairly and constructively, ensuring a harmonious work environment.

Legal Compliance: Adhering to ethical principles aids in compliance with laws and regulations, reducing the risk of legal issues.

In today’s workplaces, where reputation is more transparent than ever, a commitment to ethical leadership is a key success lever, which can set a business apart from its competitors and provide security for investors or stakeholders.

Case Study: The Consequences of Unethical Leadership in an E-commerce Start-up

Consider an e-commerce start-up in the disability sector, which aims to provide accessible and affordable products for individuals with disabilities. Let’s suppose, the CEO, driven by profit maximisation and pressure from shareholders, decides to cut costs by sourcing low-quality products and inflating prices while misleading customers about the quality and origin of the products.

Initially, financial results might seem promising, but the long-term repercussions can be devastating. Here’s how a lack of ethical leadership in this scenario can cause reputational and brand damage:

1. Loss of Trust: Customers with disabilities and their families rely heavily on these products. Discovering the products are subpar or misrepresented breaks the trust they placed in the brand, leading to negative reviews and damaging word-of-mouth, especially in niche markets.

2. Negative Publicity: Media and advocacy groups for individuals with disabilities may highlight the unethical practices, causing a public relations crisis. The negative publicity can overshadow any previous positive contributions of the startup.

3. Employee Morale and Turnover: Employees inspired by the startup’s mission might feel betrayed by the CEO’s actions, leading to decreased morale, reduced productivity, and higher turnover rates. Talented individuals may leave, and attracting new talent can become challenging.

4. Legal Consequences: Misleading customers and compromising on product quality can result in legal action. Lawsuits and fines further strain the company’s finances and tarnish its reputation.

5. Stakeholder Confidence: Investors and partners who value ethical business practices may withdraw their support. This leads to financial instability and hinders the company’s growth and innovation.

Conclusion

Ethical leadership is the cornerstone of a thriving and trustworthy organisation. By adhering to ethical principles, demonstrating key leadership qualities, and understanding the importance of ethics, leaders can create a positive impact that resonates far beyond their immediate circle of influence. The example of the e-commerce startup in the disability sector illustrates how a lack of ethical leadership can cause significant harm, highlighting the necessity for leaders to maintain integrity and prioritise ethical considerations in all their decisions. 

Embracing ethical leadership not only guides organisations toward success but also contributes to being a good part of society. 

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About Kerry
Kerry Kingham

Kerry Kingham is a transformative leader, speaker and communicator, her expertise transcends industries to shape the teams of tomorrow. Offering authentic connection and strategic guidance, Kerry empowers others through inclusion and inspiring leadership.

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