What is ethical leadership in business?

With leadership comes influence and a degree of power within an organisation. This means there is an ethical responsibility for how leaders affect others and their surroundings, whether through visible changes or by setting examples. Leading by example promotes ethical action to those around you. 

At the root of practising ethical leadership, leaders must acknowledge their own drawbacks and realise that there is always room to learn and grow. Being open to other people's perspectives are key to this.  A duty of care is at the core of demonstrating ethical leadership in business. Try asking yourself the following:  

• How is my action going to affect other people?
• What are the downstream impacts of this decision that we are going to make?
• Is it the right one for our company and for everyone working here?
• Are you being fair to the individual whilst serving the common interest of the company? 

Thinking before acting and listening to gut feelings will raise the possibility for more ethical and moral decisions. In turn, retaining a sense of awareness and following best practices. 

Creating Values

If it is unclear what the code of ethics are, try revisiting what your company’s core values are and be honest in questioning if they are present within the workplace. Leaders must implement workplace practices apparent with these overall values. For example, holding staff accountable if they violate the company’s code of ethics, and placing importance on rewarding those who conduct the company’s ethical standards.  

As you see the impacts of your success grow, and have your achievements acknowledged, it is important to not fall victim to power corruption, by continuing to put the welfare of your staff before your own. Always give credit where credit is due. Good delegation relies on maintaining connection and accessibility and ensuring that everyone’s hard work is recognised. 

This can be done by remaining available and accessible to staff, as the best companies are the ones that create a culture where their employees can voice their concerns and ideas to higher ups. Remembering where you started and putting yourself in your colleagues’ shoes, can further help you create a sense of connection and signal that you are willing to be available. Question your actions to make sure that all decisions made are leading to an objective that is ethical.

How does a leader effectively communicate and manage the company's culture to create ethical action?

Have conversations about your company's ethical values and figure out how it relates to day-to-day work. It is common for workplaces to introduce their values but not have them be practised in the workplace, so it is quickly forgotten after starting. Try setting up dedicated meetings  to ensure everyone is on the same page from an ethical perspective.  

Employees tend to act more ethically if they are often reminded of the importance of living up to the company’s ethical values. Effective leaders create dedicated and brilliant staff that embody commitment to the firm's culture. 

People are more likely to act unethically within their role when they feel they are being mistreated by the company. Hyper-competitive environments where unrealistics goals are set, lead employees to lose focus on their ethics. Workplaces which carry punishments for failing to meet targets or use extravagant incentives, will push employees to follow a “By any means necessary” approach. Realistic goals and rewards for meeting them is a better solution.  

B Corp

The B Corp certification scheme is gaining much momentum in the UK as it aims to help provide companies with more information to implement ethical, social and environmental changes. As leaders in the movement for ethical changes, B Corps build trust with consumers, communities, and suppliers, because of its overall goal to restore equity and using business as a force for good. Putting people into the same force as profit with their standards and tools. Following certified B Corp businesses is a great place to start by helping assist you in becoming an ethical leader. Get inspired with how these ethical lead businesses run, to help aid you with where to start and what to practice.

In 2021, Business West gained B Corp certification. Our carbon neutral target, Living Wage Foundation accreditation, Transparency in Supply Chains reporting and involvement in the BeOnBoard diversity initiative are all key factors that enabled us to reach this benchmark score. Watch our video to find out more about our B Corp journey. Following certified B Corp businesses is a great place to start in becoming an ethical leader. Get inspired with how these ethical lead businesses run, to help aid you with where to start and what to practice.