What Is Ethical Leadership? And How to Develop Your Skills

By Indeed Editorial Team

Published 11 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Many companies and supervisors look to develop their organisation's mission, values and goals based on how they see its success in the future. Therefore, they want to hire managers and leaders who have ethical leadership principles such as respect, integrity and honesty. Understanding what ethical leadership is can help you develop your leadership traits that are consistent with the company's values so that you can contribute to the company's success. In this article, we provide the definition of ethical leadership, discuss its importance and principles and list steps on how to develop your ethical traits and qualities.

What is ethical leadership?

Ethical leadership is a leadership style that focuses on appropriate conduct through a deep respect for ethics and values and giving importance to other people's rights and dignity. Some traits that ethical leaders have are honesty, trust, integrity and fairness, which are all important principles of ethical leadership. Ethical leadership can add value to businesses while motivating employees to live up to the company's principles. A company's strong ethical leadership can promote employee satisfaction and increase retention rates.

Ethical leaders often show appropriate and ethical behaviour and traits in several aspects of their lives. Maintaining integrity is a very important component of ethical leadership. These types of leaders also contribute to creating a good work culture by enforcing principles that all employees understand and follow.

Related: 15 Leadership Qualities You Need to Be a Great Leader

Why is ethical leadership important?

Ethical leadership is important for many reasons, because it benefits employees, customers and the whole company. Leaders who have ethical traits help to create a positive work culture, which helps to make everyone feel that the company is good and trustworthy. Investors are more likely to invest in a company that they trust, and customers are more likely to be loyal to a company where they see good leaders in charge. Partners and vendors may also work better with an organisation they trust if they see ethical leadership.

In the short-term, ethical leaders can help improve employee morale, leading to a feeling of satisfaction in their work and the management. Ethical leaders can also help in promoting collaboration within the company since everyone is happy working with one another. A company with strong ethical leadership can also prevent any scandals, dilemmas and other ethical issues.

Related: What Is Leadership? (With Key Elements of Leadership)

Principles of ethical leadership

Individuals who practise and study ethical leadership may consider these five principles of ethical leadership valuable. The principles of ethical leadership include the following:

Related: What Is a Code of Ethics in Business? (With Examples)

Honesty

Honesty refers to being truthful with those around you. An honest leader creates an environment where everyone trusts each other. Maintaining a sense of honesty and open communication is important for employees to keep their faith and trust in the company's leadership. This can lead to strong working relationships and an improvement in their morale.

Justice

Many ethical leaders have a strong sense of justice and fairness in the workplace. These leaders often prioritise treating everyone fairly and consider everyone's opinions to be impartial in the decision-making process. Ethical leaders make it a point to give everyone the same kind of treatment and they're kind and compassionate when solving problems and issues. They also try to ensure that interactions in the workplace are positive so that everyone can work comfortably together.

Respect

Respect is a vital element of ethical leadership and ethical leaders convey respect to everyone, from their managers to their employees. They acknowledge that everyone has value and worth and listen to each person's opinion, especially during the decision-making process. Many leaders who are ethical also mentor their team to understand their own purpose, needs and values and spread these ethical qualities throughout the company, leading to a positive work environment.

Community

Ethical leaders put a sense of importance on the community and behave with unselfish concern for the welfare of others. They often prioritise their subordinates' welfare and take the time to engage in activities like mentorship, team building and employee empowerment. Ethical leaders want to build a strong community within the workplace and confirm their employees' values and purposes within the company.

Integrity

Integrity refers to being honest and having a strong moral compass. Ethical leaders usually demonstrate these values to people around them by how they behave in the workplace. Leaders who act with integrity help to strengthen the company by attracting candidates who are also ethical and talented. Customers and investors also appreciate leaders who have integrity and may want to do business with them or purchase from them over other organisations.

Read more:

  • What Is Integrity? Definition, Attributes and Examples

  • What Is Transformational Leadership and Why Is It Effective?

Traits of ethical leaders

There are a few types of ethical leadership behaviour and traits that you can practise to develop yourself as an ethical leader. The traits of ethical leaders include:

Leading by example

Ethical leaders often lead by example by having the same kind of standards for themselves as they do for their subordinates. These leaders often help their team members with their tasks so that they can understand their duties and the challenges they experience in their daily work. After understanding their employees more, leaders are capable of guiding them through their tasks. When employees see that their leaders are willing to do the same work as they do and set a good example, they're more likely to be willing to work hard for their leaders in the workplace.

Related: What's Empathy in Leadership? (Plus Importance and Steps)

Communicate openly

Ethical leaders excel in communication to create an environment of trust in the workplace. They're also comfortable speaking in public, leading meetings and expressing what they want to impart to others clearly. Ethical leaders build relationships with their teams based on trust and open communication. They're also very effective at building relationships with their employees by being honest and open with everyone in the company.

Related: What Is Leadership Communication? (Definition and Examples)

Be willing to adapt

Good ethical leaders are often willing to accept and adapt to changes around them and the world. As technology advances and businesses expand, being able to adapt is one of the key components of success. This also sets a good example for employees to be flexible in adapting to changes too.

Related: 10 Types of Leadership Styles

Hire ethical employees

Ethical leaders want to establish a common ground with their team, which is easier if they have the same kind of values as them. This usually starts from the hiring process where leaders hire employees who have the same values and goals as their leaders and the company. They also want to hire people who have the right experience and skills for the role. Ethical leaders also seek to hire those with similar ideals so that they can have a respectful work culture.

Manage stress well

Leaders may face challenging situations daily, both in their work and personal lives. Ethical leaders know how to handle their stress in a positive and productive manner. Good leaders who're ethical can find other ways to manage their stress while encouraging their employees to manage their stress in helpful and positive ways.

Tips to improve your ethical leadership skills

With time and practice, you can improve your ethical leadership skills to become a good leader in the workplace. Here are some tips you can follow to improve your ethical leadership skills:

Identify potential trigger situations

Ethical dilemmas may happen at work that may cause you to think twice about what to do. These situations may include hiring or promoting employees in the company. Knowing when these ethical dilemmas may happen can help you understand and identify the risks so that you can reflect on how to carry yourself with integrity.

Manage ethical dilemmas when they happen

You can identify potential dilemmas when they happen, but it's also important to handle them too. Here are some steps you can take to manage these dilemmas:

  • Prepare in advance. Think of ways that you can respond to theoretical scenarios so that you can consider the ethics in advance. If you take time to prepare, you can make quick decisions during a crisis.

  • Assess your evidence. Whenever you can, take time to assess all the information you have about a situation before you react or make a decision.

  • Seek advice. Even as a leader, it's still helpful to ask a friend or mentor for advice during an ethical dilemma.

  • Have courage. As a leader, there may be times where you may require making a decision in a challenging situation. During these times, learning to trust your instincts and assessing situations logically can help you make ethical decisions.


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