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How to Be an Ethical Leader: 7 Tips for Success

Kiely Kuligowski
Kiely Kuligowski

Being an ethical leader is more than just having strong values.

As a manager, there is a clear difference between being just a boss and being a leader. Where a boss orders, a leader guides; a boss manages, a leader inspires. The difference lies in how you make your employees feel and how you view your relationship with them. A good leader sees it as their responsibility to inspire, guide and nurture their employees to help them improve; they lead by example.

"In today's transparent, social-media-driven world, senior executives, especially those with a high profile, will be tested and called to task over their morals and ethics in how they do business," said Shane Green, author of Culture Hacker (Wiley, 2017). "This used to be more focused on business practices but is now shifting [to] leadership practices. Businesses, and their leaders, are under a microscope. How they act and interact with those around them professionally will have a significant impact on their ability to attract new talent and, ultimately, their bottom lines." 

Ethical leadership is defined as "leadership that is directed by respect for ethical beliefs and values and for the dignity and rights of others." It is mainly concerned with moral development and virtuous behavior. 

As Heather R. Younger, founder and CEO of Employee Fanatix, put it, "an ethical leader is someone who lives and dies for integrity. Doing the right thing, even when it hurts, is the ethical leader's mantra." 

What is ethical leadership?

Ethical leadership involves business leaders demonstrating appropriate conduct both inside and outside of the office. Ethical leaders demonstrate good values through their words and actions. According to the Harvard Business Review, ethical leaders will not overlook wrongdoing, even in cases when doing so may benefit their businesses. Showing integrity and doing what's right are at the core of being an ethical leader. Ethical leaders set the example for the rest of the company.

Importance of being an ethical leader

Ethical leadership is a management style that works for any organization. These are the top benefits for a company that relies on ethical leadership:

  • Positive culture: Employees' morale improves when they work behind an ethical leader. Staff won't feel as if they are helping a corrupt person earn even more money. Ethical leaders have the capacity to inspire those working with them to perform at their peak.
  • Improved brand image: The leaders of the company should show the best that your brand has to offer.
  • Scandal prevention: Ethical leaders don't create bad PR for a company. Company scandals can be damaging to an organization's image and cause customers to turn to a competitor.
  • Loyalty: Both employees and customers are more likely to remain loyal to companies that hire ethical leaders.
  • Improved emotional well-being: Workplace stress can hurt productivity levels at a company. If leadership is toxic, then efficiency will decrease.

While this may all sound lofty, it's more attainable than you might think. Here's how to become an ethical leader.

1. Define and align your values.

Consider the morals you were raised with: Treat others how you want to be treated, always say "thank you," help those who are struggling, etc. But as you grow, and as society progresses, conventions change, often causing values to shift.

"This is the biggest challenge ethics face in our culture and at work and is the biggest challenge ethical leadership faces," said Matthew Kelly, founder and CEO of Floyd Consulting and author of The Culture Solution (Blue Sparrow Books, 2019). "What used to be universally accepted as good and true, right and just, is now up for considerable debate. This environment of relativism makes it very difficult for values-based leaders."

Kelly added that to find success in ethical leadership, you should demonstrate how adhering to specific values benefits the mission of the organization.

"Culture is not a collection of personal preferences," he said. "Mission is king. When that ceases to be true, an organization has begun its journey toward the mediocre middle."

Ask yourself what matters to you as an individual, and then align that with your priorities as a leader. Defining your values not only expresses your authenticity but also encourages your team to do the same, creating a shared vision for all workers.

2. Hire people with similar values.

While your values don't need to be identical to those of your workers, you should be able to establish common ground with them. This often starts with the hiring process and is maintained through a vision statement.

"I do not believe that every person is a fit for every company, and that is OK," Green said. "Companies need to do a better job ensuring they find people who are aligned with their values rather than just hiring for experience."

In fact, Kelly believes it's valuable to hire employees who have different experiences and perspectives, because they each offer their own solutions to challenges.

"But when it comes to values, I think having and hiring people who share your values is critical," he added. "Nobody wants to work for somebody who doesn't share their values … Without mutual respect, it is very difficult to form a dynamic team, and most people find it very difficult to respect someone who doesn't share their values."

3. Promote open communication.

Every employee is different, even if they share similarities. With each decision you make, be transparent and encourage feedback from your team. This helps you become a better leader and helps your workers feel more confident sharing their ideas or concerns.

"I believe that one of the important responsibilities for the modern company is to create an environment where open communication is encouraged and that, more importantly, people are listened to," Green said. "We are seeing a lot of employees calling on their companies to change policies, drop customers or take a stand on current issues. Companies cannot bend to every employee's demand, but what they do need to start executing is creating forums where employees can raise their viewpoints, feel they are listened to, and receive follow-up explaining why certain things can or cannot happen."

Gathering feedback from your team helps you improve as a leader and propels your business forward.

"Management is all about the people," said Alain Gazaui, CEO of InteliKINECT. "Understanding where they come from is crucial."

4. Beware of bias.

As humans, many of us have beliefs, subconscious or otherwise, that are outdated or erroneous. No leader wants to admit to their flaws, but failure to practice self-awareness can have detrimental consequences.

"Everyone has bias, but for the longest time, you were not called out on it because you were never really challenged," Green said. "Now that the workforce is more diverse … some unexposed biases are being called out. Managers need to … look at themselves and be honest that they do, in fact, have biases that may impinge on another person feeling comfortable at work."

If you are an open-minded leader, you will build and maintain better relationships with your workers.

5. Lead by example.

To build an ethical company, you must start from the top down. Your employees will see your behavior, choices, and values and will adopt them in their own practices.

"To effectively lead, the ethical leader walks the line he or she wants others to follow," Younger said. "Leading by example is the best way to ensure an ethical business."

Leading by example instills respect and lets your employees see that you truly believe in them and trust them to work.

6. Find your role models.

"There are many leaders throughout history," said Mike Sheety, director of ThatShirt. "Do a little research of good, powerful leaders and try to identify what they do [well]. Then, implement it into your own leadership style." 

7. Care for yourself so you are able to care for others.

You cannot pour from an empty cup, as the saying goes.

"Having a calm and capable demeanor is the foundation for strong leadership," said Christine Matzen, founder of Oak Street Strategies. "This can be accomplished through making sure that you, as a leader, are focused on meeting your own needs, [like] sleep, nutrition [and] true connection with loved ones."

Matzen said that devoting time to self-care might sound simple, but it's critical to support your capabilities as a leader. "The leader that is happy and content in life wants happiness and contentment for those they lead." 

Examples of ethical leadership

Being an ethical leader involves more than simply stating you plan to act for the general good of all. You should make an active plan for how your actions at work can make you an ethical leader. 

  • Remember actions matter more than words. Ethical leaders don't make false promises. If they make a promise, they do whatever they need to in order to keep it. Always act in an unselfish and kind way to everyone on staff. As a golden rule, never treat the janitor any differently from how you treat the CFO.
  • Provide appropriate training. Ethical behavior should always be emphasized through training opportunities. Schedule sessions that drive home how treating others in an ethical way promotes a positive workplace.
  • Practice good communication. Remain transparent in all business dealings. Never lie or mislead others for the benefit of the business or yourself. Keep employees and associates in the loop about all dealings. For example, if your company must downsize, let staff know far in advance.
Kiely Kuligowski
Kiely Kuligowski,
Business News Daily Writer
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Kiely is a staff writer based in New York City. She worked as a marketing copywriter after graduating with her bachelor’s in English from Miami University (OH) and now writes on small business, social media, and marketing. You can reach her on Twitter or by email.