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What is Ethical Leadership in Business?

Ethical Organizations Should Value Employees as an End in Itself, Not a Means to an End

The ethical leader understands that positive relationships are the gold standard for all organizational effort.  Good quality relationships built on respect and trust—not necessarily agreement, because people need to spark off each other—are the single most important determinant of organizational success.  The ethical leader understands that these kinds of relationships germinate and grow in the deep rich soil of fundamental principles: trust, respect, integrity, honesty, fairness, equity, justice and compassion. 

Early last century the German philosopher and theologian, Martin Buber, described these successful relationships as “I-Thou” relationships, in which people recognize the intrinsic worth and value of others and treat each other with sincerity and respect.  In the language of the 18th century German philosopher, Immanuel Kant, this is the principle of always treating the other person as an end and never merely as a means to serve your own personal interests.  The ethical leader moves and acts in a world of I-Thou relationships, where in any situation, to the fullest extent possible in the circumstances, the intent is to honor and respect the worth of the other person.

Servant Leadership

In this way the ethical leader embraces the act of service as described by Robert Greenleaf in his concept of “servant leadership.”  The effective leader acts as a servant to others engaged in the enterprise, not in any sense of inferiority, but as one who empowers others to achieve success by focusing on right action.  The ethical leader understands the truth of our interconnectedness to each other, and that it is through our willingness to serve each other that we release our combined energy and potential to benefit the greater good of which we are all a part.

The Importance of Ethical Leadership

Fostering positive relationships provides benefits at three levels of organizational life.  It is important to the individual as he or she comes to work every day and engages in activities that can fall anywhere along a spectrum from rewarding and fulfilling to disempowering, toxic and debilitating.  No less in need of empowering ethical relationships is the team, large or small, formal or informal, project-focused or maintenance-oriented—in every case it depends on supportive relationships among team members.  Finally, the organization as a whole with vast spans of communication and disparate areas of responsibility needs a bonding agent to make people feel they are making a unique and valuable contribution to the whole.  Ethical leadership across all three levels nourishes the relationships that empower human enterprise.

Linda Fisher Thornton, in her book, 7Lenses: Learning the Principles and Practices of Ethical Leadership, contends that the key to having an ethically run company is employing morally upstanding leaders. Thornton offers practical advice on the most important actions leaders can take to integrate ethical conduct into their organizations, including:

  • Face the complexity involved in making ethical choices: Openly discuss the ethical gray areas and acknowledge the complexity of work life. Be a leader who talks about the difficult ethical choices, and help others learn to take responsibility for making ethical decisions carefully.
  • Don't separate ethics from day-to-day business: Leaders must make it clear to their employees that ethics is "the way we operate" and not a training program or reference manual. Every activity,whether it is a training program, a client meeting or an important top management strategy session, should include conversations about ethics.
  • Don't allow negative interpersonal behaviors to erode trust: Make respect a load-bearing beam in your culture. Cultivate a respectful environment in which people can speak up about ethics and share the responsibility for living it. Build trust, demand open communication and share the ownership of organizational values.
  • Don't think about ethics as just following laws and regulations: Leaders need to take action and show consumers and other stakeholders that they are actively engaged with ethical issues that matter. Recognize how ethics influences consumers' reasons to buy from you, and demonstrate a commitment to go beyond mere compliance with laws and regulations.
  • Don't exempt anyone from meeting ethical expectations: Allow no excuses. Make sure that no one is exempted from meeting the ethical standards that are adopted. Maintain the status of ethics as a total, absolute, "must do" in the organization. Hold everyone, particularly senior leadersand high profile managers, accountable.
  • Celebrate positive ethical moments: Be a proactive ethical leader, championing high ethical conduct and emphasizing prevention. Managers should talk about what positive ethics looks like in practice as often as they talk about what to avoid.
  • Talk about ethics as an ongoing learning journey, not a once-a-year training program: Integrate ethics into every action of the organization — everything people do, touch or influence. Talk about ethics as an ongoing learning journey, not something you have or don't have.

Benefits to the Organization

The key to developing ethical leaders is to focus on developing ethical competencies including: acting with honesty and integrity; being reliable and dependable; being true to your word; being willing to make mistakes; taking responsibility and clean up after messes; and empowering others to assume leadership roles when vacancies exist in the organization.

An ethical organization is a community of people working together in an environment of mutual respect, where they grow personally, feel fulfilled, contribute to a common good, and share in the personal, emotional and financial rewards of a job well done.  There is a shared understanding that success depends on a constellation of relationships, both internal and external, not all of which are under the organization’s control, but which it can influence through the way it operates from a platform of ethical principles.

Blog posted by Steven Mintz, aka Ethics Sage, on September 22, 2016. Dr. Mintz is Professor Emeritus from Cal Poly San Luis Obispo. He also blogs at: www.workplace ethics.com