The Power of Ethical Leadership: Building Success with Trust
Photo by Nathan Dumlao on Unsplash
Critical to inclusive leadership is being intentional about how we think about the broader impacts of our actions. Do your actions lead to responsible decision-making? Do your actions promote positive cultural practices within your organisation? These two questions provide a good starting point for baking in ethics as a part of your leadership style.
When I talk about ethical leadership or ethics in leadership, what I’m referring to are those codes of conduct that are helpful to employees, customers and any other stakeholders impacted by your leadership.
What does Ethical Leadership look like?
While ethical leadership offers numerous advantages, it is not without its challenges. Leaders may face dilemmas where ethical decisions conflict with financial interests or short-term goals. The pressure to prioritise profits can sometimes tempt leaders to compromise their ethical principles. However, it is during these critical moments that ethical leadership truly shines, as it requires courage, resilience, and a commitment to doing what is right.
Example:
Emily is the CEO of a multinational corporation that manufactures consumer electronics. The company has been facing pressure from shareholders to increase profits, and Emily has been considering various cost-cutting measures to meet these demands. One option on the table is to relocate production to a country with lower labour costs, where regulations regarding worker safety and environmental protections are less stringent.
From an economic standpoint, relocating production could significantly boost the company's profitability in the short term. However, Emily recognizes that this decision could have ethical implications. The country in question has a poor track record of labour rights abuses and environmental degradation. Moving operations there could contribute to the exploitation of workers and harm to the environment.
As a leader, Emily faces a dilemma. On one hand, she has a fiduciary duty to maximize shareholder value and ensure the company's financial success. On the other hand, she also has a responsibility to consider the broader impacts of her decisions on society, including the well-being of workers and the environment.
Emily decides to prioritise ethics in her leadership approach. Instead of relocating production to a country with lower labour costs, she opts to invest in improving efficiency and innovation within existing operations while maintaining high labour and environmental standards. Although this decision may not yield immediate financial gains, Emily believes it aligns with the company's values and long-term sustainability goals.
Trust Can Be Brand-Building
By prioritising ethics in her leadership decisions, Emily demonstrates integrity, accountability, and a commitment to responsible business practices. This not only fosters trust and loyalty among employees and stakeholders but also helps to build a positive reputation for the company in the marketplace. In the long run, Emily's ethical leadership contributes to the company's success while also making a positive impact on society.
Big ups to Emily, but this is just the tip of the iceberg. Ethics also heavily underpins Systemic Leadership. I go into a lot more detail about this in my book (you ain't getting the whole cow for free). However, I will say that the power of acting ethically should never be underestimated, both in terms of its ability to move people and to enact real, lasting change.
Ethical leadership is not just a choice; it is a responsibility that leaders must embrace to build a better future for themselves, their organisations, and their communities.
