5 Ways to Be a More Ethical Leader

In today’s business environment, perhaps no principle is more revered — and yet more misunderstood — than ethics. Leaders and business owners claim that they want to be more ethical, or that that conduct their businesses in an ethical fashion, yet have difficulty articulating exactly what that means to their daily operations.

Ethics

Often companies will devote considerable time and resources toward becoming a more social responsible — ethical — organization, with the intent of attracting more business and a more loyal customer base. And there is some evidence that those efforts pay off; in a recent Wall Street Journal report, researchers found that consumers are more willing to support, and will pay more for products from, a company that they believe acts ethically. By the same token, consumers are likely to punish those companies that they view as unethical, either shunning their products entirely or only purchasing them at a steep discount.

The focus on ethics and social responsibility in business has become so important that many top business schools incorporate ethics focused courses into their programs and ethical elements into nearly every individual course as well. Many of those elements can be distilled into five key behaviors that any leader should adopt in order to be viewed as a more ethical leader.

1. Publicly Declare Your Values

While actions will always speak more loudly than words, publicly declaring your values and the most important aspects of your business’s core values allows you — and your company — to be held accountable for your actions.

Values

Don’t hide your values in an employee handbook or a memo that never sees the light of day again after initial distribution. Create posters, put your values on your website, incorporate them into performance reviews; use multiple methods to share the values with employees, customers, and the public to ensure that the message is received.

When you do so it’s easier to “walk the walk” — and identify ethical violations sooner rather than later, when they have damaged the company’s reputation.

2. Reward Ethical Behavior

Including your values statement in employee training and your performance review process allows you to hold employees accountable for their ethics. It also allows you to reward those behaviors that are in line with your company’s values.

Do not view performance and success as separate from ethical behavior. If an employee performs well, but does so in a manner that may be inconsistent with your core values, do not reward him or her with a raise or promotion. Instead, reward those employees who aren’t willing to compromise their integrity or do questionable things even if it means sacrificing performance. Again, doing so is practicing what you preach, and demonstrating your commitment to ethics.

3. Be Consistent

Ethical behavior isn’t situational. Strong values apply to every situation, even when you have to make difficult decisions or sacrifices. For example, it is not fair to discipline an employee for something, and then overlook the same behavior in another employee because he or she is a top performer. Playing fast and loose with your principles is a good way to loose respect not only from your employees, but from your customers as well. Consistency in your words and actions are an important part of ethical leadership.

4. Admit Mistakes

No one is perfect. Even the best, most experienced, well-educated leaders make mistakes sometimes. The fallout, though, depends largely on how the leader handles the mistake in the aftermath. It’s not always easy or pleasant, but honestly admitting your failings, apologizing, and presenting a plan to avoid the same issues in the future goes a long way toward maintaining good will. Being honest and forthright is also a cornerstone of ethical behavior, and admitting mistakes demonstrates that transparency and builds trust.

5. Avoid Making Snap Decisions

Finally, being measured and careful in all of your decision-making allows you to be more ethical. That doesn’t mean that you need to take days (or weeks) to make any decision, but taking time to consider all aspects of a particular choice is an important part of leadership. Making snap decisions may work out in the short term but often, those decisions end up having ramifications that you cannot foresee right away. By stepping back and considering all of the possible angles and outcomes, you can make the most ethical choice and prevent the need for damage control down the road.

If you were to ask a typical leader if he or she is “ethical,” chances are that person would say yes. However, many people have difficulty defining exactly what that means to them, or how it plays out in their operations. By incorporating some of these ideas, though, the demonstration of ethics becomes clearer — and by extension, the business and leader become more ethical as well.

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