When Kathryn Minshew, CEO and co-founder of The Muse decided to part ways with a client (a major deal at that time) to protect her team from poor treatment, she set a powerful example: Prioritizing her employees’ well-being and right to be treated respectfully over profits. In doing so, she created a solid foundation of trust, where everyone in her team felt valued.
The fact is, being an ethical leader is not easy. But it becomes the most important factor when it comes to ensuring your organization’s sustained growth. Ethics is not limited to top leadership – it’s important from an HR perspective as well. What are the traits of an ethical leader? How does ethical leadership bring organization-wide success? Why should your business prioritize ethics now? Read on to understand.
Ethical Leadership in HR – Wellbeing of Customers, Employees, Investors, and Society
As an HR leader, you have ethical responsibilities to four important stakeholder groups – customers, investors, employees, and your community. Let’s look at how ethical leadership brings success in all four of these areas:
Customers
The customers of today look beyond a product or service before buying from a business. They look at the values, ethics, and morality of a company. In a social-media-dominated world, when consumers see the value you place on ethical leadership, you become a well-intentioned business contributing toward making the world a better place.
Investors
Ethical leadership serves as the first line of protection against scandals or actions that lead to a bad reputation. It paves the path for long-term growth and success. The result? Investors feel confident about investing in your business.
Employees
About 87% of workers in the US prioritize working with organizations that share their values, such as “those that prioritize environmental sustainability or ethical business practices.” This makes it vital for HR leadership to prioritize values such as integrity, honesty, transparency, sustainability, diversity, inclusion, and more. Nobody looks forward to a workday in a toxic environment. Your employees want to feel heard and respected and ethical leadership is vital for building a culture based on similar values.
These leaders not only help attract but also retain top talent. The result is improved productivity, accountability, and business success.
Community
When ethical practices prevail, society benefits from reduced corruption and increased trust. From taking diversity and inclusion efforts seriously to prioritizing sustainability – ethical leaders challenge systemic biases and barriers to make the world a better place.
Ethical Leadership – Improved Bottom Line
An ethical leader may not make every decision with profits in mind. But this is a quality that ultimately braces their organization for a stronger financial future. How? Because leading with ethics safeguards an organization from reputational, legal, and financial damages. It boosts employee productivity and accountability and keeps investors, customers, and employees happy. The result is a smooth and consistent road toward sustainable profitability while contributing heavily to society.
The Recipe for Ethical Leadership in HR
What does ethical leadership in HR really mean? What best practices do ethical leaders follow to create a culture of honesty, productivity, and success? Here’s your answer:
Honesty
What’s legal isn’t always ethical. Ethical leaders know this belief is rooted in operating with honesty. In addition, these leaders ensure they share as much as they can with their teams. This type of honest conversation allows them to offer dependability, with employees feeling more comfortable raising their concerns.
Transparency
An HR professional operating with ethics always communicates a fact regardless of how unpopular it may seem. They ensure everything stays out in the open and everyone puts their best ethical foot forward with the information they’re given.
Communication
Ethical leaders prioritize open and clear communication to transform their organization into a place of honesty and trust. By making employees feel comfortable to voice their concerns and do the right thing, they create a culture of openness and safety.
Teamwork
Another valuable practice ethical leaders follow is that of making everyone feel like they’re all a part of something bigger than their individual responsibilities and tasks. They’re proactive in promoting a sense of teamwork so everyone feels higher levels of creativity, productivity, motivation, and satisfaction.
Value-Driven Decisions
HR leaders with an ethics-first mindset work with organizations that advocate for values of integrity, honesty, and transparency. They ensure these positive values become the norm at all levels of their organization, so everyone makes decisions based on similar values.
Fairness + Absence of Implicit Biases
Ethical leaders are masters of overcoming implicit biases. This helps them build a diverse workplace where people from different backgrounds get to create great work. They prioritize diversity and inclusion and solve problems in a way that’s fair to everyone involved. This helps them keep disputes at bay and tap into a diverse set of talent that guarantees business success.
Safe and Trusting Environment
Strong ethics and the ability to provide safety – these are the top competencies 67% of participants in a study by Harvard Business Review expected from a great leader. Employees thrive in a space where they can relax, innovate, communicate freely, and ultimately give their best performance.
Leading by Example
Ethical leaders hold themselves to the same standards they expect from those who work for them. They don’t just talk the talk but walk the walk. Helping their people with daily tasks allows them to understand the challenges their teams face. This equips them with the right approach to solve problems and guide their people in the right direction. When employees see their leaders operate with integrity and honesty, they implement similar values in their own work.
Some Examples of Ethical Leadership
Studying leaders who demonstrate ethical leadership in the real world is a great way to implement similar best practices within your organization. Here are some examples of ethical leadership in action:
- Unilever CEO Paul Polman’s ambitious goals of reducing their environmental footprint and erasing deforestation from their supply chain.
- Costco’s ethical move of compensating employees with wages that are well above the average industry figures to attract and retain top talent.
- Everlane’s dedication to keeping its factory and supply chain process transparent.
Over to You!
Ethical leadership and business success go hand in hand. Values of integrity, honesty, transparency, diversity, fairness, and more enable these leaders to transform their organizational culture into a happy and productive haven where everyone puts their best work and behavior forward, contributing to consistent business growth. Ethical leadership becomes the glue that holds customers, employees, investors, and society as a whole together. These leaders make the world a better place, one ethical decision at a time.
