Ethical Leadership Can Lead To Greater Profits

When asked, most small leaders say they want to lead ethical companies.
In fact, a recent Small Business Digest survey indicated 73% of respondents voted for ethical leadership as a key component of success.
Given the choice millennial employees, who value socially responsible employers, according to Nicole Zwieg Daly, J.D., Ed.D director of the University of St. Thomas Opus College of Business,
Companies with ethical cultures often find it easier to attract and retain loyal employees, customers and partners, adds Dr. Zwieg.
In addition as Dr. Zwieg points out aspiring to ethical business practices should be an end in itself, but business turns on profits. And there is no shortage of financial justification for building an ethically strong organizational culture.
She believes that apart from earning loyalty and recognition, ethical organizations stand to gain a significant marketplace advantage – leading to financial gains.
According to Dr. Zwieg, there are three key pillars to building and maintaining an ethical business culture: principled leadership, equitable systems and ethical citizenship. Establishing and living those standards must start at the top.

  • Principled leaders articulate their values, make decisions guided by their values and consistently model their values. Principled leaders can be identified at any level of an organization. Individuals in positions of authority within an organization should most certainly be virtuous persons with principles that drive their action.
  • Because human beings have a psychological need to identify with a role model, it is incumbent upon all business leaders to practice behavior worth emulating – integrity, honesty, fairness and trustworthiness.
  • Equitable systems are necessary for an organization to truly develop and maintain an ethical culture. Yes, establishing and publishing an ethical code of conduct is an excellent way to build an ethical foundation and codify an organization’s values; however, this is not enough to drive human behavior.

Consider this: the Compliance and Ethics Institute’s 2018 National Business Ethics Survey found that employees were feeling more pressure than ever to cut corners in their workplace; and, of those surveyed, 84% observed ethical misconduct in their workplace!
An equitable rewards and punishment system across an organization will help ensure more ethical behavior far beyond a codified document.
Finally, organizations should develop ethical citizens through ongoing learning. Ethical citizens engage with their professional environment, looking beyond self-interest to the needs of the greater good. They could be an organization’s most valuable asset, because they will promote ethical practices and preserve ethical standards.
Ethical citizenship evolves over time through ongoing learning. Developing ethical citizens requires employees to have the ability to seek understanding and assistance on a variety of ethics and compliance issues freely and openly.
While ethics presentations and annual compliance training are important, they are not enough. Humans internalize information more when given the opportunity to choose how and what they’d like to learn. Encourage employees at every level of the organization to learn more about ethics and compliance.
Visit the Business Ethics Resource Center ( for more insights into how to build a strong ethical culture.