Page Updated on October 19, 2023

by Dr Valeria Lo Iacono

What is ethical leadership?

What Is Ethical Leadership?

Ethical Leadership is about being a leader who considers and works towards being a leader who:

  1. Has Integrity: Acts fairly and represents the company in a fair way (both for their financial interests and morally)
  2. Works to promote Equality, Diversity, and Inclusion (EDI) within the workplace and is fair to all employees
  3. Creates a safe work environment for those one leads (i.e. a psychologically safe workplace)
  4. Provides transparency and is approachable, i.e. enables open communication
  5. Leads by example, including by showing honesty and through a good and positive work ethic and manner
  6. Can show empathy and compassion toward others.
  7. Is someone others feel they can trust
  8. Is socially responsible: Ethical leaders recognize their responsibility not only to their organization but also to the greater society.

Terms such as ‘Principled Leadership’, ‘Responsible Leadership’, and ‘Moral and Integrity Leadership’ are terms that are also used to describe ethical leadership.

Ethical Leadership diagram with 8 traits
Diagram by Dr Valeria Lo Iacono (2023)

I have created the diagram above to try and show visually the benefits and traits of promoting ethical leadership within your business. Let’s though go through these traits and discuss each of them below:

The 8 Traits of an Ethical Leader

1. Integrity

Having managers and other leaders in your business who show integrity and who uphold the standards you expect, is essential if you want to be seen as an ethical business.

Your managers need to show integrity both financially and morally speaking.

2. Safety

A great leader or manager in the workplace needs to ensure that the people they manage feel safe in their work.

When we talk about safety, in addition to being in a physically safe work environment, the concept of psychological safety is very important.

Psychological Safety refers to how we create a work environment in which all employees feel able to have a voice and speak openly and feel comfortable being included.

This topic is also sometimes included in EDI (Equality, diversity, and inclusion) which we will discuss shortly.

Psychological safety PowerPoint ppt slide
>> See the Psychological safety teaching materials

3. Lead By Example

An ethical leader needs to show those whom they lead the correct and right way to work.

Employees need to be able to see you as a role model of sorts, i.e. as someone whose work habits are an example of how things should be done.

Leading by example includes consideration for how you:

  • treat customers, your team, and other colleagues
  • manage your work/life balance
  • your work ethic

4. Trustworthy

Trust is a vital ingredient in leadership. Your ability to inspire and motivate others to want to succeed and be a part of a successful team will be related to how much they trust you.

You need to be someone who keeps to their word and who is reliable and dependable.

Avoid ever being a part of the office gossip and lead in a way that shows you are trustworthy.

Surprisingly, a recent study by Gallup showed that no more than 21% of employees they interviewed strongly agree that they trust the leadership of their organization. 

5. EDI (Equality, Diversity & Inclusion)

A lot of attention has been given in the last few years to the area of EDI (equality, diversity, and inclusion) and for good cause.

It is important that everyone within a company is given a fair opportunity to progress, thrive, and be happy in their workplace, and this is increasingly important given that most workplaces are becoming more diverse.

With many people working longer, we are now seeing a greater generational divide within companies, and in this respect, we need to consider diversity because of age, in addition to other factors including ethnicity, dis/ability, and background, etc.

As a manager or leader, we can build on our experience, skills, and understanding of EDI through training and by working to create a fairer workforce and workplace for everyone.

If you are a human resources (HR) department or trainer, EDI topics that you might want to consider training managers in include:

6. Transparency

Is it clear what you stand for as a manager?

Do you manage a team of people who feel that they can approach you whenever they need to, be it for guidance, with an issue, or to share an idea?

An ethical leader should aim to have an open-door policy and be equally as accessible to one employee as another.

7. Empathetic

Whether or not we are naturally good at being empathetic and showing empathy, we need to learn to show that we care and are sympathetic to the ideas and situations those we manage face.

One of the easiest ways in fact to begin to be more empathetic is by learning to listen!

We can all learn to listen better, yet few of us do, even when we are managers! You can find some useful listening skills tips in this listening activity.

Understanding and showing compassion, for example, for those suffering from menopause, or those suffering from health issues is both morally the right thing to do and it will help the employee.

Indeed, statistics from recent studies from Gallup show that employees who find that they are shown the right care, are 69% less likely to actively search for a new job.

8. Social Responsibility

The idea here is that we are not only responsible ethically for our company and the people we manage but that we also give due consideration to society as a whole.

It is understandable, of course, that profits are essential for most businesses in order to be sustainable. Likewise, we have to compete with colleagues for promotions, and leadership is not always easy. People are difficult to manage sometimes!

Even factoring in all the difficulties and challenges of being a leader, we should not neglect consideration for how we can do the best we can for the environment, community, and society at large.

Ethical Leadership Examples

Examples of ethical management and leadership

Let me provide you with a couple of examples of ethical leadership.

Fair Employee Promotion (Workplace Promotion)

Situation: A manager is responsible for promoting one of their team members to a higher position.

Ethical Leadership: The manager evaluates candidates objectively, considering their skills, experience, and performance. They ensure that the promotion decision is based on who deserves the position as opposed to the person the manager personally likes better, promoting a fair and equitable workplace culture.

Flexible Work Arrangements (Work-Life Balance)

Situation: An employee requests a flexible work schedule to accommodate their family responsibilities.

Ethical Leadership: The supervisor, understanding the employee’s needs, approves the request, allowing the employee to maintain a healthy work-life balance. Ethical leaders prioritize the well-being and work-life balance of their employees when feasible.

Handling Employee Misconduct (Disciplinary Action)

Situation: An employee is found guilty of violating workplace policies, potentially leading to disciplinary action.

Ethical Leadership: The manager investigates the situation very carefully, going through the necessary processes to check to see if any wrongdoing occurred. If disciplinary action is warranted, it is carried out in a manner that is proportional to the misconduct and adheres to company policies, treating the employee with dignity and respect throughout the process.

Client Confidentiality (Professional Services)

Situation: An attorney, consultant, or healthcare provider possesses sensitive client information.

Ethical Leadership: The professional ensures strict confidentiality and data protection, refraining from disclosing client information without proper consent or legal necessity. Ethical leaders in professional services prioritize the ethical duty of safeguarding client confidentiality, even in the face of potential pressures or conflicts of interest.

In these everyday workplace scenarios, ethical leaders demonstrate fairness, empathy, transparency, and a commitment to upholding ethical principles. They create a positive work environment by making decisions that prioritize the best interests of employees, clients, and the organization while maintaining high ethical standards.

Developing Ethical Leaders as a Company or Business

How to be an ethical leader

It is important, as a business, to provide the right training, to help your managers and team leaders develop into the best possible ethical leaders that they can be.

Training will benefit both the manager in question and you as a business.

For the manager, the chance to develop and gain new skills and to use these new skills to develop into a more rounded leader with great ethical leadership skills is invaluable.

1. Make the Company’s Ethics Policy Clear

It is easier for managers to meet the ethical standards and expectations of the company if the company policies are clear and available for everyone to read.

Try to make sure these standards are available such as on the Intranet or website.

These policies should ideally also be clear and simple to understand.

2. Hiring Process

The hiring process is an opportunity not only to try and hire the right person with the right on-the-job skills but also to consider whether the applicant is likely to fit in with and buy into the ethical stance that your company takes.

3. Providing Training That Aids Ethical Leadership

There are several training programs that you can provide leaders to enhance their skills and some include the following:

a) Listening Skills

As mentioned previously, listening skills are one of the easiest things to teach managers, and a half-day session such as on ‘Effective Listening Skills‘ is a great starting point.

b) Conflict Resolution Skills

In order to be fair and manage well, it is important to be skilled in conflict resolution and techniques for managing difficult people. When managing difficult situations, a manager needs to use techniques that ensure conflict is managed in such a way that it treats employees fairly and effectively.

c) Empathy Skills

Empathy skills are certainly something we can all improve and develop. Basic training in this area will help your leaders to be better at placing themselves in the minds and situations that others face, and empathize accordingly. This article from Harvard is a useful resource.

d) EDI

As mentioned earlier, ensuring that managers are trained in topics such as Allyship, Unconscious bias, and Inclusion is extremely useful. Such skills help the person being trained to better understand how to avoid alienating anyone in the workplace, be it through dis/ability, age, background, or ethnicity.

e) Decision-Making Skills

There are certain techniques, used in decision-making, that can help managers make decisions ethically far easier.

4. Providing the Structure for Ethical Leadership

As a company, in addition to providing the right type of training, you will also need to ensure that you provide the correct structure and support system for your managers to realistically be able to lead in an ethical manner.

If you do not provide the right support structure for your managers, attempts at developing a team of ethical managers and leaders become somewhat less likely.

In terms of structure, managers need to have the right support from HR and from their own senior managers, to have access to all the right resources, and to access to the right training.

Ethical Leadership, Employee Engagement, Reputation, & Brand

It is worth also mentioning employee engagement and morale as these are two areas that can unquestionably benefit from ethical leadership.

As you can imagine, employees who feel:

  • valued
  • listened to
  • treated fairly

will inevitably be happier in their work than other employees, who feel less valued.

Happier employees who are included more in the decision-making, and discussions and given the chance to develop, result in reduced staff turnover.

As a company, this can mean significant savings in rehiring and training costs.

So, not only is ethical leadership rewarding for your leader/managers to be involved with, but employees will be happier

We have a duty of care to our employees and thus ethical leadership should always be the target.

Indeed, the long-term benefits of ethical leadership are worthwhile on every level as a company.

You’ll be doing the right thing for your employees, cultivating happier managers, providing a better service for customers and for the community, and hopefully benefiting yourself as a company through happier customers, reduced staff turnover, and greater buy-in from your industry for what you do and how you do it.

In other words, ethical leadership can also benefit your company’s reputation and brand.

The Consequences of Unethical Leadership

There are numerous consequences of unethical leadership and these include:

  • Damage to your reputation as a business
  • Financial and legal issues
  • Poor customer service and satisfaction
  • High staff turnover
  • Low employee morale

Everything, as you might appreciate, points to the benefits of ethical and principled leadership in that there is so much to gain as a leader and as a company by thinking and acting ethically.

Conclusion

Ethical leadership is not only the right thing morally for a company but you benefit your employees, your brand, and your reputation as a business.

The costs of training managers to improve their leadership skills, in the long-term, it can be argued, is a cost-effective way to move forward as a company.

Managers and leaders who show conscientious and values-driven leadership are ultimately going to be better leaders.

Dr Valeria (Lo Iacono) Symonds