Ethical Leadership
If you’re seriously interested in making a significant contribution to your organization, you’ll want to pay attention to the concept of ethical leadership. Indeed, ethical business cultures have been proven to engender more favorable job attitudes among employees, greater camaraderie and cooperation, less deviant behavior, more reporting of suspected and actual violations and an improved bottom line.
Employee reviews of the best companies in which to work consistently cite elements such as an open and fair atmosphere in which employees are trusted and empowered to make decisions, strong and transparent leadership from the top down, encouragement of initiative and the expression of differing points of view and an environment in which employees are heard, respected and valued for their individual contributions.
What Is Ethical Leadership?
Ethical leadership involves acting with integrity, leading by example, addressing problems, making ethical decisions, and creating a culture of compliance. In this ongoing effort, middle managers are vital, as they are in the best position to communicate corporate values to the employees responsible for living them.
The most powerful way for managers to inspire direct reports to act in an ethical manner is to model the desired behaviors themselves. Doing so underscores training, reinforces organizational messages and supports the ongoing activities of the compliance office.
Here are some actions of an ethical leader:
- Leads by example, setting the tone for the organization
- Fosters a sense of community within the team
- Develops effective listening strategies
- Trains and reinforces ethical values and behavioral expectations
- Holds self and others accountable
- Avoids favoritism and biased treatment of others
- Admits mistakes and works to correct them
- Keeps promises and honors commitments
- Tells the truth
- Is transparent in communicating policy and decisions
- Upholds ethical values in decision making
- Addresses ethical violations promptly and effectively
Important Things to Know about ethical leadership
Simply put, ethical leadership involves doing what is right. It applies even when “no one will know” or when it goes against the way things may have been done in the past. Sometimes, it means not doing something even though that behavior may not be illegal. Other key points about this brand of leadership include the following:
- It involves not only actions taken but also actions not taken
- Ethical leaders have empathy and can “put themselves in others’ shoes”
- It acknowledges that trust is a valuable commodity and, once lost, is difficult to regain
- It embraces the perspective of the broader community, and considers what is best not for oneself but for the organization as a whole
- It includes acting in a timely manner when warning signs of problems occur. Once the offender has been counseled or warned, it will be easier to deal with the issue if it recurs
- It can require standing up against pressure
Warning Signs and Consequences
Some red flags of unethical leadership practices include:
- Poor employee performance and morale
- Ineffective, hostile or nonexistent relationships between manager and employees
- Negative internal and external perceptions of the organization
- Low levels of reporting of existing ethical violations
- Damage to the organization’s reputation
- Legal issues
Examples of unethical leadership include:
- Sharing confidential information without permission, including talking about other personnel behind their backs
- Making decisions based solely on whether they are popular, profitable or convenient
- Taking credit for others’ accomplishments or shirking blame for one’s own errors or misjudgments
- Giving or receiving bribes, special favors or preferential treatment
- Fostering a workplace in which employees don’t know where they stand and fear reprisals, retaliation or sabotage
- Culture of the team discourages bringing up ethical concerns
All managers are responsible for both behaving in an ethical manner every day on the job, ensuring that their direct reports do likewise, and maintaining an atmosphere of trust, fairness and integrity in which employees feel comfortable bringing up and working though ethical dilemmas. This means being aware of warning signs, monitoring activities, welcoming questions and discussions of ethical issues, and reporting any serious concerns or issues to the compliance office for resolution. Clear, direct and honest communication is key to creating a climate of integrity.
