Why Ethical Leadership is Non-Negotiable

Ethics serve as the moral compass to guide leaders in all their actions and business practices. Business practices continue to be complex, dynamic, and ever-changing, challenging leaders to always pivot while ensuring that their morals and values always remain constant through all changes. In the complexities of leadership, ethics form an essential foundation for effective, responsible, and sustainable leadership skills. Ethical standards are non-negotiable for everyone, arguably more so for leaders. Individuals in a leadership role play an important role in impacting the lives of those they lead as well as the direction of the organizations they are a part of. In addition to a leader’s impact on the organization, and on employee’s lives, leaders also affect and are closely watched by society as a whole. In the Fall of 2016, Wells Fargo announced that it would settle a lawsuit for $18M. The lawsuit was filed by federal regulators and the city and county of Los Angeles, as a result of information coming forward that Wells Fargo employees had opened more than 1M unauthorized customer accounts. This practice spanned more than a period of five years. When these unethical practices surfaced the financial institution suffered a significant drop in the company’s stock prices, which lasted for quite some time. It is arguable that Wells Fargo’s leaders played a role in the unethical practices that lasted more than five years and involved so many accounts. While all involved might not be determined, what is clear is that lack of ethics was at the core of these practices. Leaders seeking to secure a reputation for always upholding ethical standards should:?

Consistently Demonstrate Integrity and Earn Trust. Ethical practices are non-negotiable for all leaders, as it sets the tone for trust to be built at all levels of the organization. Leaders demonstrating integrity as a core leadership practice will set the tone for the rest of the organization and also earn the trust of others inside and outside of the organization. Consistently leading through practicing ethical behaviors will earn the trust and respect of employees, colleagues, as well as internal and external stakeholders. When leaders regularly act with integrity, and act confidently they inspire others to do the same. They also foster open communication and collaboration and regularly highlight what ethical behaviors look like in others. Trust is the guiding principle of effective leadership, which enables leaders to build strong relationships, inspire loyalty, and achieve organizational goals. Ethical leadership sets the tone for the culture within the organization and leaders who prioritize ethics create an environment that promotes fairness, transparency, and accountability. By consistently upholding ethical standards, leaders shape the behavior and attitudes of employees, role-modeling what good looks like for all to see. A culture of integrity and trust not only improve communication and employee engagement, it also improves employee morale and helps the organization to attract and retain top talent. An?organization built on integrity and trust, with leaders consistently demonstrating ethical behavior will attract like-minded employees at all levels.?

“The needs of a society determine its ethics.” Maya Angelou?

Foster Stronger Internal and External Relationships.?Leaders must consider the interests and well-being of all employees, colleagues, and shareholders inside and outside the organization, inclusive of the broader community. Ethical leaders understand the importance of balancing competing interests and making decisions that benefit their team, the organization, and those dependent on the organization in any way. By prioritizing ethics, leaders foster positive relationships which enhances the organization's reputation and ensures its long-term success. Ethical leaders act as responsible corporate citizens, contributing to social and environmental sustainability. They also build strong relationships which foster better ethical leadership and it lays the foundation for trust, communication, and empathy. When leaders have strong relationships with their employees, colleagues, and stakeholders, they create an environment where open and honest communication can flourish. This transparency enables leaders to make ethical decisions by considering diverse perspectives and engaging in meaningful dialogue. Trust allows leaders to develop future leaders, by empowering their employees, and consistently demonstrating what good looks like. When trust is present, individuals are more likely to uphold ethical principles and rely on their leaders' guidance. Strong relationships also promote a culture of empathy and inspire long-term sustainability. Leaders who are in-tuned to the needs and concerns of their employees, and others aligned with the organization, make ethical decisions that consistently consider the well-being of all involved. Building strong relationships nurtures the essential elements of ethical leadership, such as trust, open communication, and empathy. These qualities enable leaders to make well-informed decisions that align with ethical standards and promote the welfare of their teams and stakeholders. Ethical leaders also help the organization ensures legal and regulatory compliance in all business practices. Prioritizing ethics and ensuring that all laws, standards, regulations, and business conduct are at the highest standards will have lasting positive effects. By promoting a culture of ethics and compliance, leaders protect their organizations from legal exposure, financial and other consequences as well as damage to their reputation. Ethical conduct not only mitigates risks but also creates an environment where employees feel safe and supported in reporting unethical behavior and any concerns.?

“We face situations where there are risks and opportunities on both sides of our choices, varying opinions and interpretations about the appropriate choice, and insufficient information or experience to serve as a guide” Scott Dolan, Forbes Magazine?

Encourages and Role Models Long-term Thinking.?Ethical leadership plays an important role in the organization by setting the tone for the behaviors that inspire the organizational vision. Honesty, integrity, and transparency are core principles that ethical leaders possess and practice. Consistency also helps ethical leaders build trust with employees, colleagues, and the broader community. When people trust their leaders, they are more likely to align with the organizational vision and actively work towards achieving it. The embodiment and promotion of the core values of the organization along with leading by example are also core to an organization’s short-term and long-term success. Leaders consistently displaying behaviors that reflect the organization's mission, vision, and values will role model the behaviors necessary to set the organization up for success, for a long time to come. It is also important that leaders communicate the long-term vision of the organization and share updates when changes occur. Being accountable is also important for employees to see as they work with their leader. While this is important in the leader-to-employee relationship, it is also as important for all other internal and external relationships. By encouraging transparency and fairness, ethical leaders foster a sense of ownership among employees, ensuring that everyone is committed to the shared objectives, and practicing ethical decision-making. When leaders consistently act ethically and make decisions in line with the organization's values, they enhance the credibility and trustworthiness of the organization in many ways. A strong reputation attracts and retains talented employees, fosters lucrative partnerships, and strengthens the organization's ability to meet and exceed its goals.?

Ethical leadership sets the foundation for a strong and sustainable culture, aligns employees with the organizational vision, and creates an environment where ethical behavior thrives at all levels. By embodying ethical principles, leaders foster a sense of purpose, trust, and commitment, which are essential for the successful realization of the organizational vision. Ethics is integral to a leader's ability to drive sustainable long-term success. By consistently acting ethically, leaders foster a culture of trust, innovation, and adaptability, positioning the organization for success in our rapidly changing world. Ethical leaders prioritize ethical considerations when making decisions. They create an environment that values ethical conduct and encourages open dialogue about ethical dilemmas. By fostering ethical decision-making, leaders ensure that actions taken in support of the organizational vision are aligned with the organizational values, mitigating the risk of unethical behavior that can inhibit success. Ethics is non-negotiable for leaders due to its profound impact on individuals, organizations, and society as a whole. By embodying ethical principles, leaders establish trust, nurture a positive organizational culture, build strong stakeholder relationships, ensure legal compliance, and contribute to long-term success. Ethical leadership is not only a moral imperative but also a strategic?advantage that enables leaders to navigate complex challenges, inspire others, and create a positive and sustainable future.?