What is Ethical Leadership and Why It Is Important in 2021?

What is Ethical Leadership and Why It Is Important in 2021?

An ethical organisation is the outcome of solid leadership. It entails building a culture of accountability, responsibility, and trust within its processes, systems, and people. This is of high relevance today, with remote working becoming common in almost every sector.

Ethical leadership begins with the top management walking the talk and demonstrating appropriate conduct through their actions which influences others to do the right thing.

Winning teams have more confidence in their peers and look forward to working together by walking on the path of righteousness. On the contrary, teams who have had to face failure tend to harbour a sense of mistrust and keep an eye for the next best opportunity elsewhere. This peculiar pattern has emerged across industries that affect the organisation’s moral and ethical environment.

Ethical leadership begins with the top management walking the talk and demonstrating appropriate conduct through their actions which influences others to do the right thing. Click To Tweet

So, how does one manage to break this pattern? By hiring ethical leaders who encourage their team members to stay glued together, especially in the face of failure as well as maintain a team’s confidence in itself. Unethical leaders have a hard time keeping their team together after failure. Brands that have strived to hire and hone ethical leaders have also built a solid long-term brand value for themselves. This has helped strengthen employees’ confidence in their organisation and cultivate a strong desire to keep working there.

Here is a more in-depth look into ethical leadership, what it means for an organisation, and its impact, especially in the pandemic-hit times of 2021!

Ethical Leadership and How it Separates the Best From the Rest

The Oxford Dictionary defines ‘Ethics’ as ‘moral principles that govern a person’s behaviour or the conduct of an activity.’

This sums up ethical leadership as acting according to one’s moral principles in day to day business and decision making. It simply means doing the right thing when leading a team, small or large, and abiding by the social and ethical rules and responsibilities.

The Oxford Dictionary defines ‘Ethics’ as ‘moral principles that govern a person’s behaviour or the conduct of an activity.’ Click To Tweet

A more structured definition of “ethical leaders” is often hard to come by, as it encompasses many facets. In general, ethical leaders are known to harbour ‘meaningful relationships’ with their team members, by following the three basic tenets:

  • Encouraging communication,
  • Prioritising process over results, and
  • Living and breathing fair behaviour.

Organisations that have failed to nurture ethical leaders have also had to bear the brunt of negative media and bad PR. Cases abound of unethical leaders who prioritised their personal gains and indulged in criminal conduct, landing themselves as well as the brand associated in hot waters. On the other hand, organisations with ethical leaders and employees tend to enjoy a better advantage with their internal employees. The employees view their employers in a positive light and have better chances of continuing with the same organisation for more time.

Here are some of the benefits of ethical leadership in an organisation and its positive effect:

1. Customer Loyalty:

Brands are no longer just about products or services; they embody the values and ethics they exhibit. To build and enjoy continued customer loyalty, businesses have to demonstrate constant efforts towards ethical practices.

2. Attract Potential Investors:

Businesses that follow a clear standard for ethical practices inspire confidence among their potential investors. This creates a good impression and a positive brand image in the market.

3. Improved Hiring:

With the large-scale adoption of remote working, it has become increasingly important to hire employees who possess both ethical and moral fabric. A company’s hiring policies should be in line with its ethics and values so that clients, customers,  or the community can always receive equal services.

4. Improved Morale:

The success and failure of a business can be measured against the performance of its employees. Ethical leaders take the lead in inspiring, motivating, and making the employees feel accountable for their work. By doing so, it is possible to powerfully boost employee performance and keep the team’s morale high.

5. Positive PR:

In the age of fast speed internet, a mere photograph or video of organisational malpractices can spread like wildfire. Social media smear campaigns and poor press for the company can hurt the reputation badly. Therefore, organisations must strive to maintain a positive brand image by avoiding immoral management practices.

6. Better Partners and Vendors:

Successful businesses are successful for a reason. They enjoy the trust and support of their partners and vendors, who usually share similar values as the organisation. Practising ethical business practices will enable businesses to attract ideal vendors and partners for mutual growth.

7. Legal Practices:

Ethical behaviour is not a one-off stance. It is a continuous set of decisions and a pattern of thinking that gets reflected in company decisions. If ethical decisions become an everyday habit, the organisation does not have to worry about compliance-related audits. It is best to avoid any legal complications that are expensive and end up wasting precious company work hours.

Ethical Leadership – A Look At The Current Scenario

Reasons Why Ethical Leadership Is Important in 2021-2

According to global data of 142 countries from Gallup, only 13% of the employees are engaged. This glaring statistic is enough to point out the bleak quality of the leaders who manage them, around the world. In today’s COVID-hit times, when the work arena has adopted a remote work policy globally, there is an urgent need for ethical leaders who will keep their team members motivated. With the huge losses that have surfaced in almost every sector, leaders have a far more important responsibility today to not only stand for what is right for the organisation but also do right by their employees.

According to a report by the International Labour Organisation, there were unprecedented global employment losses in 2020 of 114 million jobs relative to 2019. Continuous lockdowns, a sense of fear amongst the public, and the government regulations to curb the spread of the virus, led to huge losses as even long-standing businesses were forced to shut down due to inactivity.

Ethical leadership is more relevant today for organisations to give their employees’ wellbeing the highest priority in these times of job losses and remote working, which has also been reported to be associated with negative feelings of isolation, stress, depression, etc.

A physical office set-up nurtures a sense of camaraderie amongst the people working there as they catch up in between meetings or discuss work over a coffee, which came to be completely missing in a work from home environment. Also, it is more challenging to detect and track any unethical action by any employee or leader.

Add to that the mundane housework and an absence of work-life balance as the lines blurred between work and home. So, companies need to fill this void by helping the team members stay afloat and work together as a team in 2021.

Thus, the strong link between work ethics, employee performance, and employee morale cannot be ignored anymore, and practising ethical leadership is how organisations can look forward to a better future!


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