12 Characteristics of an Ethical Leader to Adopt Today

Successful companies are often built on the foundation of compliance and ethical leaders are at the forefront of it all. Ethical leadership is all about leading in an ethical manner. Ethics, in short, is all about doing the right thing. But what qualities truly make an ethical leader? How can leaders learn to oscillate towards ethical leadership? What benefits does an ethical leader bring to the organization’s table? Dive right in to understand. 

What is Ethical Leadership?

According to the Harvard division of continuing education, Ethical Leadership involves leaders and managers making decisions based on the right thing to do for the common good, not just based on what is best for themselves or for the bottom line.  Ethical leadership is a style of leadership that prioritizes doing the right thing. Period. Not the right thing for shareholders only. Not the right thing for the business over the right thing for the employees or customers. The right thing for all interested stakeholders. Ethical leadership means making decisions that not only align with the short-term and long-term goals of the business, but decisions that put the organizations credibility at the forefront. 

What are the Top Characteristics of an Ethical Leader 

An ethical leader’s role extends far beyond setting rules and expecting compliance. It is about embodying principles that foster trust, fairness, and integrity. In today’s complex business landscape, leaders are no longer judged solely by their ability to achieve financial targets. Leaders must inspire their teams and influence the organization to act responsibly toward their stakeholders and the larger business community. Compliance monitoring is a large part of this. In addition, ethical leadership is not a one-size-fits-all approach. It involves a blend of personal traits, values, and professional behaviors. Those traits, values, and behaviors must create a positive impact on the business. 

The following are the most important characteristics of an ethical leader:

Leads by Example

An ethical leader doesn’t just talk the talk. They walk the walk by always doing the right thing. They express attitudes they expect their employees to uphold and maintain the same standards they communicate. They understand the value of everyone in the team (including themselves) when it comes to achieving the overall organizational goals.  

Integrity and Accountability 

Ethical leaders always put integrity first. They demonstrate good values through their words and actions. They act with integrity and value authenticity. An ethical leader will never blindside wrongdoings, even when doing so may be profitable for their company. By taking every step with integrity, they set a strong example for the workplace.

Empathy

Ethical leaders strive to understand and empathize with their employees. They are empathetic listeners and communicators. They encourage their employees to do the right thing, listen patiently to their grievances, and help them journey through effective solutions. 

Driven by Values 

Ethical leaders make decisions based on the values of their organization. Although this may seem contradictory to a moral leader, the truth is, most ethical leaders only team with companies that are known for doing the right thing. By choosing ethical organizations, these leaders bring their own positive values to the organization, ultimately helping it succeed.

Operates with Fairness 

Ethical leaders value equality above everything else. They avoid biases of all kinds and treat everyone with fairness. They support and provide constructive feedback to everyone regardless of their gender, ethnicity, religion, marital status, and more. 

Aware of Implicit Biases 

A leader who values ethics isn’t afraid of detecting and analyzing their own unconscious biases to make clearer decisions. This helps them become more thoughtful towards every member of the team. By canceling implicit bias, they make every employee feel comfortable and appreciated. The result is often a happy and productive workplace. 

Isn’t Afraid of Open Communication

Ethical leaders place their organization in the hands of trust and honesty by openly communicating with their employees. By allowing everyone to put their issues on the table, they avoid hostility and distrust within the workplace. They are fully transparent and encourage feedback from their teams.

Transparency

Regardless of how unpopular a fact may seem, an ethical leader doesn’t hold back from conveying it clearly. They believe in the power of transparency to create an atmosphere of trust. Through transparency and trust, they empower others to make the right decisions with the information they need. 

Zero Tolerance for Ethical Violations

A leader who values ethics never overlooks ethical violations. They expect their team to do what’s right every single time (not just when it’s advantageous for them). When faced with an ethical hiccup, they do everything in their power to bring it to its resolution.

Willingness to Evolve

Ethical leaders are lifelong learners. They constantly evolve and acclimatize to changes that frequently visit the business world. This includes adapting to new compliance laws, staying flexible with their organizational goals, and always steering their organization’s ship in the ethical direction.

Not Afraid of Admitting their Mistakes 

When mistakes emerge, ethical and thoughtful leaders don’t hesitate to hold themselves accountable. They don’t try to downplay the damage or come up with excuses. Instead, they put their egos aside, admit what happened, apologize if need be, and immediately begin to craft recovery plans. 

Why Is Ethical Leadership So Important? 

Ethical leadership, at its core, encourages everyone within the organization to make choices that reflect honesty and responsibility. Leadership must be set through actions first and words second. By modeling ethical behavior leaders inspire confidence, build loyalty, reduce workplace conflicts, and develop cohesive teams. In addition, ethical leadership has become more than just a professional standard. When enacted properly, ethical leadership is the crucial cornerstone to all successful organizations. 

Ethical leadership is the most powerful factor in promoting overall organizational growth. Here are some reasons ethical leaders are the lifeblood of an organization:

Thriving Workplace Culture

Ethical leaders naturally have the power to inspire their teams to do their best. They help employees see themselves as a valuable part of the organization’s culture and operations. Workplace morale and productivity automatically increase when employees know they’re working with an ethical leader who cares about them.

Keeps Scandals at Bay

Every corporate scandal comes with heavy financial, reputational, and legal damages. By leading with empathy and keeping their doors open to their employees’ grievances, ethical leaders never let minor issues turn into major disasters. They adhere to the organization’s values and lead by example. This, in turn, keeps the company’s compliance image spotless. 

Improves Company Image

By acting with integrity, ethical leaders represent their organization in a positive light. Every decision they make is with the aim to improve the well-being of employees and customers alike. This makes the company operate with a sense of what is right. A great brand image then attracts valuable talent, customers, and investors. 

Increases Loyalty

Customers and employees stick with companies led by ethical leaders. These leaders operate with fairness and equality. When employees know they will be treated well every step of the way, they will naturally not look elsewhere. 

Promotes Better Emotional Well-Being

A toxic workplace can severely hurt employee productivity levels. By demonstrating their social responsibility and valuing mental health, ethical leaders push employees towards healthier work habits. As a result, employees not only escape burnout but also perform well on their personal and professional fronts. 

Common Challenges Ethical Leaders Face

Balancing Short-term Goals

Many leaders are pressured to deliver immediate results. Those results might be higher profits, faster project completions, or reduced overhead. Many times these pressures compromise ethical standards. Finding the right balance often requires resisting shortcuts that could harm the businesses reputation in the long run.

Being Aware of Organizational Resistance

Any time an organization implements changes, the changes will be met with pushback. Pushback usually comes from employees who are accustomed to one type of culture and one way of doing things. Anticipating this pushback and having creative ways for leaders and managers to deal with the pushback make it less challenging to implement ethical initiatives smoothly.

Ensuring Consistency

In a globalized workforce, many employees come from very different cultural, legal, and ethical backgrounds. Ensuring consistent ethical standards across all teams, while respecting those differences can be challenging. Preparing for these differences by preparing an ethical culture throughout the organization is the best way to maintain consistency.  

Anticipating Grey Areas

Not every situation presents a clear right or wrong choice. Ethical leaders often face complex dilemmas that lack straightforward solutions. Making thoughtful, principled decisions in these grey areas requires careful consideration, consultation, and a firm commitment to core values.

A Final Word 

The idea of ethical leadership may sound lofty. However, it’s more easily achievable than you might think. Leaders must define their own values before they set out to change the world. They must consider the values they grew up with, treat others the way they want to be treated, and never hesitate to lend a helping hand to those that are struggling. 

Being an ethical leader is also critical to cultivate a robust culture of compliance. Ethico can become the perfect compliance partner for leaders who value ethics and understand their company’s need to adhere to compliance laws and regulations. From staying on top of ever-evolving compliance laws to promoting a lasting speak-up culture, Ethico is the one-stop shop for all your compliance needs!