What is ethical leadership, why is it important, what are the characteristics of ethical leaders and how do you practice it in order to have a positive working environment?
The past several years have seen a significant shift in the corporate world. Regular hours, a steady paycheck, and two weeks of paid vacation are no longer enough to attract valuable talent — these days, employees want to work for ethical organizations.
In fact, a recent poll from MetLife revealed that workers would take jobs that paid up to 21% less than their current position if the company’s values were more closely aligned with their own.
As millennials and Gen Z become the dominant voices in the workforce, companies that want to succeed need to make ethics a core component of their daily operations. The best way to do this is to start at the top, by practicing ethical leadership in your organization.
But what exactly is “ethical leadership”? Let’s take a look at what this term means and how you can use it in the workplace.
Traits of Ethical Leaders
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Studies show that ethical leadership in the workplace leads to better employee morale, higher productivity, and greater success for the organization as a whole. But unfortunately, many companies are missing out on these perks; in an LRN Corporation survey, almost 80% of respondents claimed that they were not working for ethical leaders!
Becoming an ethical leader is a great way to make your workplace a more productive and more optimistic place — but to do that, you need to adopt the following traits.
Lead by Example
If you want to change the culture at your organization, you need to start with yourself. Ethical leadership means changing your behavior and proving that ethics in business is a top priority within your business. Give yourself the same expectations as your employees (and make sure you stick to them). This shift in your behavior will show employees that you are taking ethics very seriously.
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Be Open to Change
Change is an inevitable part of life, but in the business world, it can happen in the blink of an eye. Ethical leaders need to be prepared for anything that could come their way — and more importantly, they need to be prepared to roll with the punches with integrity and honesty.
Remaining open and adaptable will help you make necessary changes while keeping ethics as a primary focus. This is one of the core characteristics of great leaders in the United States.
Respect Everyone Equally
Every employee deserves to feel heard and respected in their workplace. This helps foster collaboration and innovation and ultimately leads to better ideas for your company. Therefore, it’s very important that leaders give their employees genuine respect — and that they respect everyone, from their fellow leaders to their newest hires.
Communication is the key to corporate ethics. It ensures that your employees understand your expectations for them. It helps you learn about misconduct so you can handle it appropriately. It builds trust, which helps create a more productive workplace. Ethical leadership demands that you communicate clearly with your employees and make it simple for them to communicate with you.
As a leader, there will be times when you make mistakes. This is normal — but how you handle those mistakes will impact how your employees view you. Don’t try to cover up your mistakes or pretend they don’t exist! The ethical thing to do is, to be honest, admit to your mistakes, and commit to doing better in the future.
Ethical Leadership in Practice
You might think that you are already an ethical person. You try to live by a code of values, and you do your best to treat everyone fairly. Wouldn’t your natural ethics influence the way you lead your employees?
Not exactly. Ethical leadership isn’t just adhering to your own personal code — it’s about fostering ethical company culture. To do this, you need to make sure that ethics are at the forefront of your business operations.
Here are a few examples of how to practice ethical leadership.
Publicly Reward Ethics
If you notice an employee behaving ethically, it is important to reward them for their work. This might mean a financial bonus, a promotion, a profit-sharing system, or another incentive. A popular example is offering your best-performing employee a travel incentive. However you decide to reward your employees, the message is clear: ethical behavior leads to getting something great.
Talk About Ethics Often
As a leader, you can’t decide to focus on ethics and keep it to yourself. Instead, you need to be a champion of your company’s ethical values! Take time to talk with your teams about ethics and stress the value of this virtue in the office. When your employees hear your words (and see you back then up with action), they will be more likely to adapt to your new corporate culture.
Let Values Shape Your Decisions
Every business decision you make is an opportunity to demonstrate ethical leadership. When you need to make a decision, assess it through the lens of your company’s values and mission first and foremost.
Exercise Zero Tolerance for Ethical Violations
Even when you are demonstrating ethical leadership, some of your employees may not be on board with the new company values. However, if you want ethics to be at the center of your company, you can not let this slide!
If you hear about unethical behavior or misconduct, it is critical that you respond by promptly investigating the situation and delivering consequences appropriately. Not only will this help weed out unethical employees, but it will also prove to everyone that you take ethics seriously.
Center Hiring Around Ethics
When you hire new employees, look for candidates who both meet your expectations for the position and align with your corporate values. In fact, you should stress the importance of workplace ethics during the interview process! This will help you build a workforce that values ethics at its very core.
Ethical leadership requires time, commitment, and a willingness to learn and grow when you make a misstep. But once you put ethics at the heart of your organization, you’ll be surprised to see how much your employees appreciate it and how successful your company can be.
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Giovanni Gallo is the Co-CEO of ComplianceLine, where his team strives to make the world a better workplace with compliance hotline services, sanction and license monitoring, and workforce eLearning software and services.
Growing up as the son of a Cuban refugee in an entrepreneurial family taught Gio how servanthood and deep care for employees can make a thriving business a platform for positive change in the world. He built on that through experience with startups and multinational organizations so ComplianceLine’s solutions can empower caring leaders to build strong cultures for the betterment of every employee and their community. When he’s not working, Gio’s wrangling his four young kids, riding his motorcycle, and supporting education, families, and the homeless in the Charlotte community.