The Importance of Ethical Leadership in Business

Ethics is a topic we discuss in our society often, but it can be hard to sometimes describe what that looks like in practice with leadership teams. When leaders act with ethical standards, employees are protected and businesses can set out to create a positive impact. Without ethics, employees can have a negative experience and the conduct of the business can have a poor impact on a local or global scale. Let’s take a look at the importance of ethical leadership in business, what it looks like and how leaders can work to uphold these standards with a master of commerce or through a wealth of industry experience.

Ethical business procedures

Ethics can relate to all areas of the business, but ethical business procedures are the best place to start. A leader with ethical business procedures will be a leader who is concerned with honouring the contractual arrangements with employees, suppliers, partners and any other key stakeholder. These ethical practices can really transform a business if they are implemented top-down and become part of the identity of the business itself. 

Setting a standard of corporate responsibility

Corporate responsibility is an area that many businesses want to appear to be comfortable with, as it positions the business as an ethical entity that is conducting itself in a fair and giving manner. Corporate responsibility is self-regulation that aims to contribute to societal goals of a philanthropic or charitable nature by engaging in or supporting volunteering or other ethical activities. It is also a great way to make a local impact, especially if you and your employees live in that community. 

If your business operates in a city with a high homeless rate, leadership may wish to organise frequent volunteering days with soup kitchens and other relevant charities. Another example of corporate responsibility may be a business that operates in publishing and donating money to teach children in developing countries how to read.

Fostering new, ethical leaders

A big responsibility for leaders is the legacy they leave for the generation of new leaders after them. Leading with purpose will guide new leaders on the right path, as they watch the current leaders navigating challenging events while still leading with ethics and integrity. If leaders want to take this to the next level, they can even design mentoring programs that will provide the literature and resources that junior leaders need to identify their skills gaps and training opportunities. There are also non-for am learning opportunities like shadowing leaders and other managers in the business. 

Championing sustainability 

Leaders who ignore the realities of climate change will do so at their own peril, and this is a legacy that you can also impart to your team. Making changes to your office and the business will go a long way in setting a sustainable standard, but it will also encourage the business to explore other ways to offset its impact. It has only been in the last decade that ethics and environmental practices have been so intrinsically linked, so leaders should also consider writing these sustainable benchmarks and policies in their SOPs (Standard Operating Processes)

Inclusivity and diversity

A business that is not inclusive or diverse is not an ethical business, and there need to be standards in place that ensures these metrics are met. Perhaps a leadership team can work toward ensuring the leadership team has at least 30% women in senior positions, and a higher percentage of employees from different cultures. There can also be policies amended to ensure that women returning to work after children are better looked after, all sexual orientations are supported and any other policies that may relate to your industry more specifically. 


Leading a team ethically is a great example to set to your employees, your fellow leaders, partners and even professionals in different industries looking on. If there is a business or leader that you have identified who is doing great things in this space, you can also reach out to them and seek guidance. 

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