Ethical Leadership

Relativity applies to physics, not ethics.

Albert Einstein, theoretical physicist (1879-1955) 

The lack of ethical business practices and professionalism has made headlines around the world since the financial meltdown and ongoing economic crisis. Ethics is the new and ultimate branding tool in a world of consumers filled with distrust and disdain. Now more than ever companies need to lead with ethics.

Ethical LeadershipStrong ethics means smart business. Ethical leaders set the standard of truth for every employee they lead. They have an opportunity to place the highest premium on truthfulness. Recent cases of corporate misconduct validate the need for every form of communication put forth to be an accurate representation. However, leading by example cannot be the only process by which this standard is relayed. It must become a company mindset that permeates every company thought, from the executive office to the mail room.

Research by the Ethics Resource Center suggests that corporate leaders are held to high standards by their own peers and subordinates. The study suggests that it is not enough for leaders to be good, moral individuals privately.

In order to be considered an ethical leader, one must be proactive about communicating their ethical values, decision-making criteria and expectations of employees. Leaders must talk about ethics as much as they do about financial goals.

5 KEY QUALITIES OF ETHICAL EXECUTIVES

  1. LEADERSHIP AND PURPOSE. Ethical executives are cognizant of the responsibilities of their position of leadership and are positive ethical role models by their own conduct. They create an environment in which moral reasoning and ethical decision-making are well rewarded.
  2. HONESTY & INTEGRITY. Ethical executives must be honest and truthful in all their dealings. They demonstrate personal integrity by doing what they think is right and honorable even when there may be pressure to do otherwise.
  3. KNOWLEDGE AND TRUST. Ethical executives have the knowledge to judge and act prudently.  This is a leader who inspires, gains trust throughout the organization and creates an environment that empowers people to exercise their own authority
  4. CHARACTER AND MORALE. Ethical executives seek to protect and build the company’s good reputation and the morale of it’s employees by engaging in no conduct that might undermine respect and by taking whatever actions are necessary to correct or prevent inappropriate conduct of others.
  5. ACCOUNTABILITY AND CONSISTENCY. Ethical executives acknowledge and accept personal responsibility for the ethical quality of their decisions and consistently maintain the highest of standards.

General Norman Schwarzkopf comments brilliantly on ethical leaders when he says, “Leadership is a combination of strategy and character. If you must be without one, be without the strategy.”

Ethical Leadership is about “raising the bar”, creating value for stakeholders and doing it with intensity and passion. These leaders speak through their identity. They show the right path by walking the right path.

Stay tuned for more on Ethical Behavior in my next blog.

2 thoughts on “Ethical Leadership”

  1. Great read Val, keep ’em coming! Sorry state of affairs as some modern day corporate leaders trade stock options for integrity and moral character.

  2. Isn’t that the truth Lisa. It really is almost an epidemic anymore within corporate America.

    An executive from NBC Universal, sent me the following thoughts:
    The fundamental question that you & your friends at the Kelley School of Business should be asking yourselves are:

    • What are ethics?
    • When does a person develop ethics?
    • How does a person develop ethics?
    • Can you actually teach an adult (college kids & business professionals) ethics?

    My suspicion is that you can teach adults how to feint ethics, but the underlying person remains the same? Next we can talk about cause & effect and their associated transfer functions 🙂

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