Ethical leadership requires ongoing attentiveness to what is happening in the world and to how the definition of what is “ethical” evolves and shifts. Because this definition sometimes changes slowly and at other times rapidly, its evolution can be difficult to follow. What was once considered appropriate practice may no longer be so. Most often, mistakes in these matters do not stem from ill intent, but from lack of awareness or insufficient reflection.
Ethical leadership is also about embedding responsibility and broad-based judgement throughout the organisation, in each of its members. In essence, it means safeguarding performance, productivity and employee wellbeing simultaneously. An ethical leader takes personal responsibility for success in both the short and the long term.
By combining the risk management dimension of ethical leadership with developing organisational members’ sense of responsibility and sound decision-making capabilities, a company can build sustainable competitive advantage. The growth of organisational capability increases productivity and enables success to be built on a sustainable foundation.
The starting point for such development should be a realistic and impartial analysis of the current state: which factors within the organisation promote ethical conduct, and which hinder it? It is essential to distinguish between observed, researched and assumed information. On this basis, development measures can be targeted precisely.
Organisational culture plays a significant role in ethical conduct. It shapes how members of the organisation interact with one another and with external stakeholders. Which actions are valued and which are not? What is discussed openly, and what remains unspoken? It is important to be aware of the state of ethical culture within the organisation and of its guiding influence.
A strong starting point for developing an ethical culture is a written set of ethical principles or guidelines based on declared values (a code of ethics or code of conduct). This brings clarity and alignment throughout the organisation. Studies also show that a living code of conduct also lowers stress levels of top management and mid-management alike.
Within the organisation, there must be open discussion and shared agreement on what constitutes acceptable conduct and what does not. During the process of drafting ethical guidelines, employees hear from one another why certain ways of working cause frustration or even hinder others’ work. The process also provides a constructive way to address difficult issues without creating unnecessary tension. At the same time, the guidelines become familiar from the outset, and their underlying spirit begins to take root. Not everything can – nor should – be written into a policy. That is why it is crucial that everyone understands the spirit in which the guidelines have been created.
Research shows that innovation capacity, the conditions for creative development of services and products, and employee wellbeing are all linked to the ethical quality of organisational culture. As social, cultural and intellectual capital grow through the development of organisational culture, new foundations are created for strengthening economic capital.
Our clients seek to achieve high productivity and wellbeing simultaneously, grounded in ethically sustainable solutions. We at Juuriharja are driven by the ambition to make ethical conduct a lasting success factor for our clients.
Get in touch – let us discuss your specific situation in more detail.
Erika Heiskanen