Author Neeraj Singh Rathore is a Independent Director,
Sustainability Consultant, Business Coach and CII certified Carbon Credit Practitioner. Worked with Infosys,
Convergys and also best selling Author now working on reducing carbon emissions.
A competent leader sets an example for their team members by encouraging, mentoring, and supporting them as they grow. They lead with ethics above all else.
Employees are led by ethical leaders who inspire, cultivate, and establish a climate of mutual respect and trust.
The Punjab National Bank (PNB) scam perpetrated by Nirav Modi is a prime example of the unethical leadership in the Indian corporate community. Recall Satyam, one of India’s most notorious examples of unethical leadership? The founder and chairman of Satyam Computer Services, Ramalinga Raju, acknowledged significant accounting fraud in 2009, involving over billions.
Numerous instances from the corporate and political spheres, such as Enron and Volkswagen, are there to read. A lack of moral leadership has several, serious repercussions.
Consequences for law: Leaders that act unethically risk fines, jail time, and criminal prosecution.
Reputational harm: Businesses and individuals engaged in unethical behaviour will experience long-term harm to their credibility and reputation.
Decrease in trust: Once lost, trust is hard to regain, and its decline can have an impact on stakeholders such as consumers, workers, investors, and others.
The practice of acting appropriately both inside and outside of the workplace is known as ethical leadership. The development of moral character and virtue are its primary concerns. Good values are demonstrated by ethical leaders in both their words and deeds.
Even in situations where it could be advantageous for their companies, moral leaders do not ignore misconduct. Being an ethical leader is fundamentally about being honest and doing the right thing. Leaders with integrity create an example for the entire organisation.
ETHICAL LEADERSHIP’S ROLE IN BUSINESS
Following a code of ethics has several advantages for you personally. You can cultivate relationships with friends and family that are more sincere and trustworthy. Making consistent selections in life could come more easily to you. Of course, there’s also the added benefit of feeling good about yourself for adhering to your values. However, behaving morally is advantageous in the job as well.
In today’s corporate world, ethical leadership—the act of providing a moral example for others—is essential. A corporate leader who makes moral decisions not only sets the standard for their sector, but they may also propel their organisations to new heights.
ETHICAL LEADERSHIP: WHAT IS IT?
A leadership approach known as ethical leadership places a strong emphasis on the value of upholding moral principles. Fundamentally, moral leadership is about setting a good example for people, regardless of their position in the chain of command.
Leaders who uphold ethics are aware of the need of responsibility, openness, and trust in creating a robust and long-lasting organisation. In all they do, they demonstrate their value for community, honesty, integrity, and respect.
Ethical leadership in action entails considering how each choice will impact the organisation and its stakeholders. Ethical leaders always ask the question: Is this the proper thing to do? before making decisions. What effects will this choice have on others?And lastly Does this choice align with the moral principles of the company?
Ethical leaders can make better judgements that support the long-term development of their organisation and are consistent with their beliefs by thinking through the moral consequences of their choices.
WHAT IS THE PURPOSE OF ETHICAL LEADERSHIP IN BUSINESS?
All company decisions, no matter how big or small, are the result of human decision-making. These individuals may participate in the decision-making process directly or indirectly, for instance, if they created an algorithm that uses data processing to generate decisions on its own.
More precisely, by identifying any potential moral or ethical dilemma, moral leaders can assist organisations in reducing risk. Ethical company executives may guarantee that their companies remain compliant with laws and regulations by promptly addressing possible issues.
You have an obligation to not only add value to your company but also have a good or neutral effect on the environment and society.
The triple bottom line, or the “three P’s,” is one conceptual framework for this:
• Profit: It is your company’s obligation to turn a profit.
• People: It is the duty of your company to make a constructive contribution to society by fostering well-being programmes, assisting charitable organisations, or creating jobs.
• The planet: It is your company’s duty to either protect or have a good influence on the environment.
A few crucial actions are:
Give an exemplary example: Moral leadership begins at the top. The attitude that SMEs want from their teams must be modelled by them. One prominent example is the creator of Patagonia, who has continuously exemplified the outdoor apparel brand’s dedication to ecological and ethical business methods. This is in line with the company’s mission and encourages other staff members to do the same.
Encourage accountability: Inspire accountability among all members of the organisation. Leaders should own up to their mistakes, learn from them, and make up for whatever harm they may have caused. Nestle’s response to the Maggi quality crisis that surfaced a few years ago serves as a compelling example. The business acted quickly and openly, prioritising customer safety before shareholder profits.
Provide a clear code of conduct: Draft a code of conduct outlining the moral standards and guidelines that the organisation expects.
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