Unlocking the potential of ethical leadership
Ethical leadership is a philosophy, not a set of rules. It’s about doing what’s right—not what’s easy or expedient. It means taking responsibility, even when the buck can be passed.
Years ago, when I was working on a cross-border M&A deal, it was a highly competitive bidding process. We won the deal, and later, the CEO of the company told me that their investors had asked if the managers had a preference for any bidder. They had indicated their preference for the Tatas, citing our values, ethics, and culture. This seemingly intangible factor ended up swinging the deal in our favour. In the cut-throat world of M&A, it might seem quaint that something as intangible as values made all the difference.
This experience stayed with me. It was a powerful reminder that ethical leadership is not just a lofty ideal but a practical advantage. In a rapidly changing world, where decisions must often be made in the face of uncertainty, having a clear moral compass can make all the difference.
Ethical leadership isn’t about public relations or checking boxes on a corporate social responsibility report. It’s about embedding integrity into decision-making, prioritising people over profits when the two seem at odds, and having the courage to stand firm when shortcuts seem tempting. It’s not easy, but it’s what separates great leaders from the rest.
What is ethical leadership?
Ethical leadership is a philosophy, not a set of rules. It’s about doing what’s right—not what’s easy or expedient. It means taking responsibility, even when the buck can be passed. It’s walking the talk: practising transparency, fairness, and empathy in every interaction. Ethical leaders inspire trust, not because they’re perfect but because they’re consistent and accountable. People follow ethical leaders because they know that these leaders won’t sell them out for a quick win.
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Why ethical leadership matters now more than ever
The pace of change today is relentless. AI will transform industries, consumers demand sustainability, and employees seek purpose and meaning. Ethical lapses are more visible than ever, thanks to the unending digital gaze.
A single unethical decision can destroy trust and harm not just your reputation but your entire business. Companies that cut corners often find themselves as cautionary tales. In this environment, ethical leadership is the foundation for building resilient, future-ready organisations.
Unlocking ethical leadership in practice
Leading ethically is not always straightforward. Leaders face conflicting priorities every day. How do you balance shareholder expectations for profit with employee demands for more wages? Or choose between cutting costs to stay competitive and investing in sustainable practices? Often, rational decision-making might lead in the direction of not doing the “right” thing.
Ethical leadership requires clarity of values and the courage to act on them. So how do you do it? Here are a few principles:
- Set clear values: Define what your organisation stands for and integrate those values into your culture, whether it is hiring, performance reviews, or decision-making.
- Lead by example: Actions speak louder than words. If you value fairness, demonstrate it in how you treat and reward people.
- Encourage accountability: Create systems that reward ethical behaviour and allow people to raise concerns without fear.
- Communicate openly: Make ethics a regular topic of conversation. Share real-life examples of dilemmas and how you addressed them.
Payoff of ethical leadership
Employees are more engaged when they see integrity at the top. Customers are more loyal when they believe in your values. Investors prefer sustainable growth over short-term gains built on shaky foundations.
In the end, ethical leadership is the cornerstone of lasting success. It’s not just a “nice to have” but a necessity in today’s complex world. One ethical decision inspires another, creating a ripple effect that transforms organisations and communities.
So, as you face your next big decision, don’t just ask, “What will this achieve?” Ask, “Is this the right thing to do?” Because when you lead with ethics, you don’t just navigate change, you shape it.
(Srinivasa Addepalli is CEO of GlobalGyan Leadership Academy.)
Edited by Kanishk Singh
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)