A manager leads a meeting.

The Importance of Ethical Leadership


Ethical leadership is an essential component of thriving, reputable organizations. A 2018 Ethics & Compliance Initiative survey of over 5,000 U.S. employees across various industries concluded that employees who saw signs of dynamic communication and workplace trust were 15x more likely to believe that their organization deliberately considered and recognized ethical behavior.  

Ethical leadership impacts company culture and positively affects an organization’s external reputation. Business leaders interested in positively influencing internal workforce culture and shaping their companies’ community standing can build a stronger ethical leadership foundation with an advanced leadership degree.   

The Importance of Ethical Leadership in an Organization

Professionals in leadership positions should commit to the high ethical standards outlined in the company’s mission statement. The mission statement should clearly establish the company’s vision to affirm its culture and relay to consumers its ethical philosophy. Effective leaders model a commitment to ethics in their personal conduct as well as work to ensure that management and employees come together to fulfill the company’s vision.

An organization's mission statement lays the foundation for how leaders should conduct business. These guiding principles can help establish behavioral tactics on how to engage employees. One behavioral tactic is the practice of self-awareness — the act of observing one’s behavior to eliminate negative actions. Business leaders can use this tactic to identify negative behavioral traits that go against organizational values and impede employee engagement and performance. Employees expect those in leadership positions to epitomize organizational values and base their own conduct on the actions of their leaders.

Professionals in these positions must be aware of the importance of behaving ethically toward employees. They must work to promote equity free of preconceived cultural biases, including their own, educating themselves and others about cultural sensitivity. Moreover, they must foster an environment that allows employees to express concerns about workplace biases.

Effective business leaders prioritize employees’ needs by encouraging them to constructively convey their opinions and concerns. Open communication strategies can promote productivity and create a supportive environment. Those in leadership positions can promote an open-door policy that demonstrates to employees that they’re valued.

External Benefits of Ethical Leadership

An organization that operates ethically reaps a variety of external benefits. Consumers sharing similar values may exhibit increased loyalty. For example, consumers who value the fair treatment of garment workers may prefer to purchase clothing from a company that’s transparent about its manufacturing policies and supports workers’ rights.

Organizations that value their employees, communities, and customers as much as profits foster positive corporate behavior that improves their public reputation. Some of these organizations make it a social responsibility to give back to at-risk communities. The shoe company Toms, for example, gives back to the community as part of its mission; for every $3 earned, the organization gives $1 to at-risk communities.

This kind of ethical leadership can transform the way other organizations give back to communities. Following Toms Shoes’ example, companies like Warby Parker implemented similar business models, such as their Buy a Pair, Give a Pair program, which has donated over seven million pairs of glasses to people and communities in need. While ethical business strategies can make a major difference in at-risk individuals’ lives, consumers feel like participants in giving back to their community.

Organizations also must consider consumers. Patagonia is at the forefront of promoting sustainability, repairing any ripped Patagonia clothing for free. In 2017, Patagonia’s recycling and repair program, Worn Wear, made 50,295 clothing repairs, according to The Washington Post. Consumers respond to organizations that emphasize consumers and community. Business leaders who exhibit ethical behavior can position themselves at the vanguard of their industries.

Industry Leaders Who Exhibit Ethical Leadership

Corporate executives such as Patagonia founder Yvon Chouinard and Toms Shoes CEO Blake Mycoskie are considered industry leaders that prioritize ethical behavior. In 2020, Patagonia funded over 1,020 organizations that promote environmental sustainability and biodiversity, such as the Ojai Raptor Trust, Los Padres ForestWatch, Center for Regenerative Agriculture, Environmental Defense Center, and Surfrider.

Under the ethical leadership of Mycoskie, Toms Shoes maintains environmentally-sustainable production processes that ensure materials are sustainable and reduce carbon footprint. The organization reported that over the past 13 years, they impacted over 96,500,000 lives and provided over $6.5 million in grants, according to “TOMS 2019 Global Impact Report.”

Business leaders that foster ethical behavior, not only within their organization but the industry as a whole, have the opportunity to promote global change. By giving back to the community, other organizations can model this behavior to create change within the workplace as well as the community. Ethical leaders exhibit conduct that prioritizes employees, consumers and communities over profits.

How an Advanced Leadership Degree Can Build Strong Ethical Leaders

Professionals interested in developing stronger ethical leadership skills should consider an advanced leadership degree that develops key skills such as:

  • Advanced communication. Ethical leaders are advanced communicators that must effectively interact with employees at all levels. These leaders value open communication, which promotes an egalitarian work environment.
  • Decision-making. Those in leadership positions must develop decisive decision-making skills. They must understand how the organization’s processes and systems impact employees, consumers, and communities. 
  • Teamwork. Ethical leaders must promote a collaborative work environment by encouraging open communication. By voicing their opinions, employees feel valued.
  • Flexibility/resourcefulness. Great leaders must be both flexible and resourceful when handling business matters and employee engagement. If certain company policies or manufacturing processes contradict the company’s mission statement or overall vision, executives must realign them on the right path.

When researching degree programs, prospective students should ensure that programs offer well-rounded curricula that facilitate professional development. Norwich University’s Master of Science in Leadership program helps students cultivate the competencies and characteristics of strong ethical leadership with a comprehensive curriculum, including these core courses:

  • Leadership Fundamentals — Ethical Leadership and Value-Driven Organizations. Focuses on theoretical and conceptual elements of different leadership models and how they can be implemented in various workplace settings.
  • Emotional Intelligence (EQ) and Leadership Style. Prepares students to use EQ evaluation tools to comprehend the intricacies of interacting with customers and coworkers. The course simulates various workplace situations.
  • Strategic Communication and Information Leadership. Develops students’ communication skills while handling workplace situations that may require varying leadership styles.

Discover How an Awareness of Ethical Leadership Promotes Professional Excellence in Business

Ethical leadership can promote employee engagement, increase productivity and enhance brand reputation. Organizations that engage in ethical behavior can attract customer loyalty by staying true to their mission statements and organizational values.

Professionals interested in paving the way toward a more ethical business environment should consider Norwich University’s Master of Science in Leadership. Students learn the fundamentals of different leadership styles, helping them engage with employees ethically. The program offers students the opportunity to develop their EQ as it pertains to intuitive reasoning as well as an understanding of interpersonal relationships in the workplace.

Learn how Norwich’s online Master of Science in Leadership can prepare professionals with the necessary skill set to become effective ethical leaders.   


Recommended Readings

Understanding Career Paths to Become a Director of Global Operations
What Is Organizational Leadership? Courses and Career Outlooks
Women Veterans Leader Guide: History, Skills, and Resources for Leadership


Building Companies Where Values and Ethical Conduct Matter, Ethics & Compliance Initiative
Leading with Ethics, Forbes
Are Ethical Leaders Good for Business? Forbes
A New Model for Ethical Leadership, Harvard Business Review
Ethical Leadership In the Workplace Can Create a Positive Work Environment, ConsumerAffairs
Characteristics of a Good Leader, Norwich University
How to Be an Ethical Leader: 7 Tips for Success, Business News Daily
Five Ways to Be an Ethical Leader, Forbes
Buy a Pair, Give a Pair, Warby Parker
Inside Patagonia’s Operation to Keep Clothing Out of Landfills, The Washington Post
We’re in Business to Save Our Home Planet, Patagonia
Patagonia Action Works, Patagonia
Patagonia’s Billionaire Founder To Give Away The Millions His Company Saved From Trump's Tax Cuts To Save The Planet, Forbes
We’re in Business to Improve Lives, TOMS
TOMS 2019 Global Impact Report, TOMS

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