The power of ethical leadership: Building trust and long-term success

We are in a period marked by constant change and reform. This rapid pace, characteristic of most companies today, can unfortunately foster undesirable employee behaviour at all levels, contributing to an unhealthy working environment. Such a corporate climate has a catastrophic impact, not only on individuals but also on the company as a whole.

The pressure of modern competition

One consequence of these ongoing changes is the increasingly fierce competition for market position. This is compounded by escalating demands for performance and efficiency. It is precisely for this reason that we have chosen to address a crucial topic in this article: leadership ethics.

In many countries, the issue of ethical leadership has only been marginally explored, often from an economic perspective. However, we are living in a time when we must acknowledge that underestimating social and ethical issues in organisations can lead to their downfall—and, in time, to the decline of society as a whole. If we want our organisations to thrive and achieve high standards, we must focus on implementing and institutionalising ethics through leaders who actively support and create what we might call a "system of falling goodness."

The need for ethical leadership

We must also strive to transition managers into true leadership roles. This shift can only occur when managers and directors recognise the necessity of ethics in both business and management activities. In this sense, it is clear that the fields of management and leadership are in dire need of an ethical overhaul.

The aim of this article is to highlight the need for the implementation and institutionalisation of ethics in organisations, particularly in Slovakia. Leaders must approach employees, consumers, business partners, creditors, and society at large with responsibility, fairness, and honesty. Only then can organisations hope for long-term profitability and prosperity. Without these core principles of accountability and fairness, sustained success is impossible.

What is ethical leadership?

“If someone could write a book on ethics, a book that would be a real book on ethics, that book would explode all the other books in the world.” - Ludwig Wittgenstein

Before we can understand ethical leadership, we must first know what ethics and morality really are. The word "ethics" has Greek origins, stemming from the word ethos. If we trace its roots back to Homer, ethos originally meant dwelling or habitation, particularly of animals, and by extension, it came to refer to human behaviour.

Over time, ethos evolved to encompass customs, temperament, mindset, and behaviour, becoming closely associated with human character. Aristotle later expanded on this, forming the term ethicos to describe a group of human virtues—such as courage and temperance—and the science that deals with these virtues became known as ethics.

The Latin equivalent of ethos is mos, which translates to morals, character, and conduct. The Romans derived the term moralis from mos, meaning relating to morals, giving us the word "morality." Ethics, therefore, is the study of morality—its origins, development, rules, and norms for human conduct, particularly in relation to one another and to society.

Ethics and leadership: A symbiotic relationship

To discuss ethical leadership, we must return to Aristotle, who classified ethics as a practical science, offering instructions on how to behave. Ethics, in this context, is inherently linked to moral action, focusing on doing the right thing.

Some argue that the origins of ethical leadership can be traced back to the moral imperatives of the Seven Sages, Confucius, or Brahmanism. However, we believe the roots of ethical leadership are best understood through Aristotle’s lens. Ethics and leadership come hand in hand; an ethical environment fosters effective leadership, and effective leadership, in turn, cultivates ethics.

Ethics and leadership function as both cause and effect. In a corporate context, leadership influences corporate culture, shaping the values and behaviours within an organisation. In doing so, leadership builds trust—the vital link that holds the organisation together.

The chain of ethics, leadership, and success

The relationship between ethics and leadership can be visualised as a chain of interconnected links:

1. Leadership: Represented by the leader who influences others.
2. Corporate culture: The sum of values and behaviours in an organisation, shaped by leadership.
3. Trust: The 'magic' element that binds the organisation together, creating a cohesive unit.
4. Long-term success: Defined as sustained profitability, stakeholder satisfaction, and optimal performance.

Without trust, an organisation is simply a collection of individuals pursuing their own interests. But when trust is present, it binds people together and leads to the ultimate goal: long-term success.

The role of morality in leadership

According to Professor J.B. Ciulla, leadership is a relationship that involves power, influence, duty, and responsibility. By understanding ethics, we can better grasp the complex relationships between leaders and followers. Central ethical themes, such as authenticity, duty, and the common good, are also core leadership themes.

Ethical leaders must place great emphasis on morality. Ciulla argues that the morality of leaders is crucial because their decisions and actions have far-reaching impacts on others. Leaders are role models, and their moral decision-making sets the tone for their organisation.

The shared responsibility of ethics

It is often claimed that leaders should be held to a higher ethical standard. However, this view is problematic because it implies a lower ethical standard for everyone else. In truth, the ethical standards of both leaders and followers are equally important. The morality of followers can influence their leaders, just as leaders shape their followers’ behaviour. As Ciulla points out, “People usually have the leaders they deserve.”

Leadership ethics is not about higher or lower standards; it is about addressing the moral dilemmas that arise from the leader-follower relationship. This reciprocal relationship makes ethics a shared responsibility, not an individual burden.

Join the conversation on ethical leadership

Recognising the importance of ethical leadership in today’s world, we were excited to host a free webinar on the topic of Ethical leadership. Feel free to watch the webinar recording of this past session as we shared insights from the Global Survey of Business Ethics 2022-2024, which we have actively participated in.

Replay the webinar