Ethical leadership: Managing a framework for success

A controversial topic that often makes headlines in the news, ethical leadership has been the cause of much discussion. In a world where organisations are under constant scrutiny for the high-level decisions they make and the impact they are having on the wider community, it is important to ensure that the teams and leaders within your business are acting ethically.

In our society, by and large, we have a shared set of values, beliefs and ethics which guide our everyday life choices. A business that is run ethically by its leaders, will be in a positive position to develop an overall culture that encompasses these shared values and beliefs. This in turn, will help create positive perceptions among clients, customers and potential employees.

Ethical leadership ensures good decisions are being made across a business, which improves customer relations, reduces errors and business liability, and ultimately increases profitability.

An ethical leader is someone who is able to think beyond their own personal interests in order to make decisions that are of most benefit to the organisation as a whole which not only meet the needs of external shareholders but also the needs of the people working within the business. These leaders inspire trust through consistently striving for fairness in all situations. 

Strong ethical leadership is important not only for leaders themselves and the people working within a business but also for the growth of the organisation. Ethical companies are much more appealing places to work for and as such, those businesses practising ethical leadership and ethical decision making will attract the best talent and are more likely to retain the talent in their team for longer. With strong ethical leadership, leaders can motivate, inspire and build trust with those who work for them.

However, while there are many benefits of ethical leadership, Baylor University researchers have found that in some cases poorly communicated ethical practices can actually be detrimental. This is particularly true where overly optimistic targets and standards are set that add unnecessary stress to an employee’s workday. Leaders that introduce processes and procedures that are designed to ensure excessively careful practices often create roadblocks for their staff to complete their jobs. 

In this same research, it was also highlighted that where ethical practices and standards set by leaders are seen to be too much of a hindrance to an employee’s everyday role, and therefore stressful, there is a significant increase in the likelihood of inefficiencies and ineffectiveness.

So, how can you ensure you are acting ethically as a business leader and ensure that the morale and productivity of your teams remain high?

The core framework for ethical leadership in any business relies fundamentally on internal uniformity through consistent messaging, proactive leadership and accountability across the organisation. While senior leaders set the standard for ethical practices, it is key that these standards are filtered right throughout the business and all employees are enabled to perform their roles effectively and ethically. 

It is important that the message your business broadcasts about ethics is clear and well-known throughout the business. A robust set of values that employees can relate to is essential, as is the confidence in its leaders to be ethical with intent in every business-related exchange. Ambiguity surrounding the expectations of employees can cause unnecessary stress and hinder business output. In order to sustain ethical leadership within an organisation, the leadership team must be empowered to live by the core values and lead by example. 

Robust appraisals and one-to-one meeting systems should be put in place in order to ensure that its leaders behave ethically, and within a clearly defined framework. There should also be systems in place that ensure other members of the business can report any observed unethical behaviour efficiently and confidentially to ensure internal uniformity.  In addition to this, employees need to have confidence that their complaints and comments will be dealt with in a professional manner, and that they will receive updates from the person dealing with their issue.  

In order to safeguard the future of ethical leadership in their senior management teams, it is pertinent for an organisation to work closely with their HR department to manage the guidelines for ethical business operations, appraisal systems and reporting processes, or to seek outside HR support where needed.

If you would like to discuss how we can help with the recruitment of senior leaders into your business, please get in touch for a confidential discussion.