What is Ethical Leadership?

Sep 21 2023 | Einblicke
Man and woman sat at a desk, smiling and laughing.

Although there isn’t one set definition of ethical leadership, the idea is based on leaders acting in a way that upholds moral principles and values. This includes integrity, trust, fairness, and much more. Interpreting and showing what is right is a key aspect of ethical leadership theory, whilst also understanding the rights of others. Let’s take a look at some of the most common ethical leadership traits.

Ethical Leadership Traits

Some examples of ethical leadership characteristics include:

  • Integrity

  • Accountability

  • Honesty

  • Transparency

  • Conscientiousness

  • Respect

  • Fairness

  • Active Listening

  • Good Communication

  • Responsibility

Benefits of Ethical Leadership

It might seem obvious, but ethical leadership is hugely beneficial for your business. On the other hand, unethical leadership can, expectedly, be detrimental. Benefits of ethical leadership include:

  • Lower turnover

  • Higher productivity

  • Loyalty

  • Workplace happiness & job satisfaction

  • Motivation

  • Trustful environment

  • Improving reputation

Let’s take a deeper dive into these benefits.

Lower Turnover

Research has found that when ethical leadership is practiced, the bond between the employee and leader is stronger, making work a more pleasurable place to be. This equates to higher commitment and decreased staff turnover rates (Mulki et al, 2007).

Higher Productivity

As a result of ethical leadership, higher productivity can be achieved. Overall satisfaction and a good workplace culture that is built through ethical leadership is a driver of employee productivity.

Trustful Environment

With ethical leadership also comes autonomy and a lack of micromanagement. Ethical leadership encompasses trust, both to and from employees. Employees are trusted to work autonomously, whilst leaders are trusted to make the right decisions; both ethical and business.


As a result of the higher level of workplace trust ethical leadership brings, loyalty and commitment are improved (Chughtai, 2015). Morally correct leadership is far more likely to build this trust and create a sense of loyalty to the company and its leadership versus questionable leadership decisions. Employees are more likely to feel comfortable and satisfied within their roles and the company as a whole.

Workplace Happiness & Job Satisfaction

Research has found that leaders who are more ethical, and adhere to ethical standards, direct their employees’ work behaviors, subsequently raising their job satisfaction (Freire and Bettencourt, 2020). This comes down to the idea of positive influence and inspiration. Having ethically minded leaders is a huge driver in a positive work culture, which is far more likely to create workplace happiness for employees, and therefore boost job satisfaction.


As an ethical leader, you, your decisions, and your doctrines are more in tune with the beliefs, values, and aspirations of your employees. This can be incredibly motivational for your workforce.

Improving Reputation

Being integral as an ethical leader means practicing what you preach. Accountability is a core feature of this type of leadership. If ethical leaders don’t hold these standards, their credibility and reputation can be seriously affected. Similarly, if unethical decisions are made, trust and credibility are again tainted. So, upholding the standards of ethical leadership can be a key driver in improving a leader’s reputation.

Why is Ethical Leadership Important?

So why is being ethical important for good leadership? Well, having an immoral leader isn’t going to motivate, engage, inspire, or retain employees. We’ve taken a look at some of the reasons ethical leadership is so important for your business, and these include:

  • Inspire and positively influence employees and individuals.

  • Holds people to a level of moral accountability.

  • Builds loyalty & trust.

  • Keeps morale high & boosts performance.

Inspire & Positively Influence

As we’ve previously explained, being an ethical leader and a well-respected individual can be hugely inspirational for your workforce, positively influencing their own actions. Not only can this create a really healthy and positive culture at work, but it can also boost motivation, productivity, and performance significantly.

Moral Accountability

If leaders don’t practice what they preach, they’ll be held accountable for it. Simple! Similarly, ethical leadership is often focused on the ethical culture of an organization, encouraging ethical conduct and setting good examples for other employees.

Builds Loyalty & Trust

Having a trusted, ethical leader who makes decisions off of shared values and beliefs has the power to rally real loyalty, boost workplace satisfaction, and reduce staff turnover rates.

Keeps Morale High & Boosts Performance

Think about it. If you had a leader who made unethical decisions, wasn’t held accountable, and made unfair choices, your morale would be pretty low. This would ultimately affect your productivity, motivation, and, as a result, your performance.

Want to learn more about becoming an ethical leader? Our certified leadership coaches can help you achieve your goals.


Chughtai, A., Byrne, M. and Flood, B., 2015. Linking ethical leadership to employee well-being: The role of trust in supervisor. Journal of Business Ethics, 128, pp.653-663.

Freire, C. and Bettencourt, C., 2020. Impact of ethical leadership on job satisfaction: the mediating effect of work–family conflict. Leadership & Organization Development Journal, 41(2), pp.319-330.

Mulki, JP., Jaramillo, JF. and Locander, W.B., 2007. Effect of Ethical Climate on Turnover Intention: Linking Attitudinal and Stress Theory, Journal of Business Ethics, 78(4), pp.559-574.

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