and Ethics Leadership

One characteristic of ethical leadership is to influence others. Management expert John Maxwell  characterizes
leadership this way: “A leader is one who knows the way, goes the way, and shows the way.”

The ethical leader understands that positive relationships built on respect, openness, and trust are critical to creating an
ethical organization environment. The underlying principles of ethical leadership are: integrity, honesty, fairness,
justice, responsibility, accountability, and empathy. 
Covey addresses a principle-centered leadership approach to one’s personal life and organization development. He
emphasizes that principle-centered leadership occurs when one’s internal values form the basis of external actions.
Principle-based leaders influence the ethical actions of those in the organization by transforming their own behavior
first. Covey encourages principle-centered leaders to build greater, more trusting and communicative relationships
with others workplace.

Ethical leaders strive to honor and respect others in the organization and seek to empower others to achieve success by
focusing on right action. An ethical organization is a community of people working together in an environment of
mutual respect, where they grow personally, feel fulfilled, contribute to a common good, and share in the internal
rewards, such as the achievement of a level of excellence common to a practice as well as the rewards of a job well
done. By emphasizing community and internal rewards, ethical leaders commit to following a virtue-oriented approach
to decision making based on a foundation of values-based leadership.

Leaders lead by example. They set an ethical tone at the top. They lead with an attitude of “Do what I say as well as
what I do.” Ethical leadership can be evaluated through a leader’s vision: Visions are not simple goals, but rather ways
of seeing the future that implicitly or explicitly entail some notion of the good.

The Ethics and Compliance Initiative (ECI) points out that research has consistently shown that:

 Ethical leadership is a critical factor driving down ethics and compliance risk;
 Leaders have a 'rosier' view of the state of workplace integrity, and often have more positive beliefs than
employees further down the chain of command; and
 The quality of the relationship between supervisors and employees goes a long way in

The ethical leadership scale helps to measure the elusive concept of leadership. It includes several behavioral
characteristics of ethical leaders:

 Talk about the importance of workplace integrity and doing the right thing
 Set a good example
 Do not blame others when things go wrong
 Support employees' efforts to do the right thing
 Hold themselves and others accountable for violating the organization's code of conduct
 Give positive feedback for acting with integrity
 Keep their promises and commitments.

Organizations suffer when leadership does not set an ethical tone at the top. The employees may be ethical but acting
ethically requires an ethical leader who supports such behavior, not a leader blinded by ambition or greed as occurred
in so many of the financial failures of the early 2000s.
Lawton and Paez developed a framework for ethical leadership built on three interlocking questions: First, who are
leaders and what are their characteristics? Second, how do ethical leaders do what they do? Third, why do leaders do
as they do and what are the outcomes of ethical leadership? The authors suggest that the three factors will not
necessarily form discrete areas of ethics. For example, auditors need to be virtuous and exhibit the characteristics of
honesty, integrity, objectivity, and professional skepticism. These traits are also essential in auditors’ relations with
clients because they enable professional judgment and ethical decision making in client relationships. They also
facilitate the kind of probing audits and targeted inquiries of management that should be conducted selflessly and in
the public interest, not that of the client or even self-interest.