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The Power of Ethical Leadership: How Integrity Drives Success

By leading with integrity and ethics, leaders create an environment where employees feel excited to come to work

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Ethical leadership

What differentiates a positive organizational culture that enjoys a clean reputation and long-term success from a toxic culture drowning in scandals, mistrust, and legal fines? 

The answer: Ethical leadership. 

Starbucks has always prided itself in being an ethics-first organization. Out of their 14 board members, five are from racial minority groups and five are women. So, when the manager of a Starbucks outlet in Philadelphia called the cops on two black people who were simply waiting for their friend before making an order, the racially motivated incident clashed with the company’s core values. 

The outcome? Starbucks fired the manager, apologized to the victims, and made racial bias training mandatory for all their employees. While this training cost Starbucks an estimated “$12 million in lost profit,” it was a big win for the company – they got a powerful message across, “we care about our customers, employees, and society.”

The story of Starbucks teaches us why integrity and ethics – not mere profitability – allow businesses to stand the test of time. Here, we discuss what ethical leadership looks like in action and how leaders can tap into the power of integrity to create a culture of positivity, caring, understanding, truth, honesty, and success. 

Ethical Leadership in Action 

If you ever observe an ethical leader in action, here are the most common qualities you’ll find:

  • Making integrity non-negotiable. For ethical leaders, integrity is non-negotiable. Regardless of how complex a situation seems, they always side with options that match their personal integrity and core values. 
  • Bring true to themselves. Ethical leaders genuinely care about values like integrity, honesty, and transparency. They consistently display ethical behaviors because they’re true to themselves and commit to doing the right thing. 
  • Clearly outlining and communicating their core values. Ethical leaders clearly communicate their core principles to their partners, employees, and customers and eventually build a culture of ethical decision-making. 
  • Making every decision with ethics in mind. Ethical leaders prioritize integrity and honesty over profits to ensure their organization sustains long-term success. 
  • Setting strong examples of ethics. Ethical leaders practice what they preach. They consistently operate with integrity, honesty, and transparency for their teams to learn and implement similar values.
  • Holding themselves accountable. Ethical leaders set clear standards of ethical behavior and hold themselves and their team accountable for it. 

Why Integrity is Vital for Ethical Decision-Making 

Employees always believe in leaders who operate with integrity. Ethical leaders aren’t afraid to side with the truth and stand for what they believe in. A strong sense of integrity in decision-making – even in the face of external challenges – is what enables them to create loyal customers, happy employees, and a better world. 

These leaders practice what they preach and don’t hesitate to hold themselves accountable for their mistakes.  Positive traits such as acting with honesty and prioritizing authenticity enable ethical leaders to navigate uncertainty, manage risks, and adapt and innovate even during crises. 

Transactional vs. Ethical Leadership 

Ethical leadership is not transactional.

Integrity in business brings results that are far beyond an improved bottom line. Sure, questionable activities may bring gains in the short term. But eventually, these gains transform into financial, legal, and reputational catastrophes. 

Achieving lasting success comes only from ethical business practices that rest upon positive core values. When leaders prioritize integrity, the resulting ripple effect spreads across every element of business – from customer satisfaction to improved employee morale. 

Another byproduct of leading with integrity is the creation of highly productive and motivated teams. When employees see their leaders consistently lead with integrity, the result is a culture of trust, respect, and innovation. 

In a world where consumers are hyper-aware of the way businesses operate, ethical leaders use the power of integrity that sets their organization apart in the marketplace. 

The Ethics of Profit 

It can be tempting to choose profit over integrity in today’s highly competitive business landscape. But a trip down history will reveal how (unethical) businesses built on weak foundations failed to stand the test of time. 

Prioritizing ethical practices over questionable business tactics is vital to establishing a strong moral compass that reinforces transparency, builds accountability, and results in long-term success. 

Employees today want to work with organizations that have a strong ethical foundation, focus on creating a positive work culture, and openly advocate for what’s right. The way a company’s image unfolds online is linked directly with the way leaders make decisions. 

Ethical leaders know that not everything that’s profitable (or legal) is ethical. When faced with difficult situations and complex ethical dilemmas, great leaders draw from their core values, consistently maintaining a positive brand image. 

In other words, ethics and integrity inspire loyalty, attract and retain top talent, create happy customers, and build a sense of trust among strategic partners. 

Ethics Training Starts During Onboarding and Never Stops

How do ethical leaders get their people to operate with honesty and integrity every step of the way? The answer lies in consistent training that starts at onboarding and never stops throughout the employee lifecycle. 

For these leaders, ethics training goes beyond a “compliance formality.” Ethical leaders pay a high degree of attention to an ethics training system because they’re fully aware of how it directly impacts their organization’s culture. 

By investing in ethics training that is focused on helping employees retain their learnings, ethical leaders make it extremely easy for their people to do the right thing every time. 

Ethics Start from Top Down, Not Bottom Up 

Great leaders don’t shy away from modeling the behavior they expect from their people. They consistently set examples of ethical behavior for their teams to follow. By being honest, maintaining transparency, and encouraging open communication, these leaders inspire trust and positivity in the workplace.

They establish clear standards, guidelines, and expectations for ethical conduct. They hold regular conversations surrounding ethical best practices and always guide their teams. Ethical leaders believe in the power of rewarding good behavior. They don’t miss the chances of publicly acknowledging people who choose right over wrong. 

Finally, ethical leaders aren’t afraid of feedback. In fact, they look for it by actively listening to their people. They create a culture where everyone feels comfortable to raise their concerns and find the resolutions they’re looking for.

From Patagonia Founder Yvon Chouinard’s commitment to sustainability to Indra Nooyi’s ethics, diversity, and inclusivity first approach – ethical leaders teach us that power can be used not only to drive organization-wide success but also to make the world a better place. 

By leading with integrity and ethics, leaders create an environment where employees feel excited to come to work. A culture of trust, integrity, and honesty not only creates happy employees and customers but also drives sustainable success and inspires the next generation of leaders.

Giovanni Gallo is the Co-CEO of Ethico, where his team strives to make the world a better workplace with compliance hotline services, sanction and license monitoring, and workforce eLearning software and services. Growing up as the son of a Cuban refugee in an entrepreneurial family taught Gio how servanthood and deep care for employees can make a thriving business a platform for positive change in the world. He built on that through experience with startups and multinational organizations so Ethico’s solutions can empower caring leaders to build strong cultures for the betterment of every employee and their community. When he’s not working, Gio’s wrangling his four young kids, riding his motorcycle, and supporting education, families, and the homeless in the Charlotte community.

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Success Advice

Why One-Size-Fits-All Leadership Will Always Fail (and What Works Instead)

The surprising truth about leadership styles that can make or break your team’s success.

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The Leadership Shift Every Company Needs in 2025

Struggling to keep your team engaged? Here’s how leaders can turn frustrated employees into loyal advocates.

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Bridging the gap between employees and employers
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In workplaces around the world, there’s a growing gap between employers and employees and between superiors and their teams. It’s a common refrain: “People don’t leave companies, they leave bad bosses.”

While there are, of course, cases where management could do better, this isn’t just a “bad boss” problem. The relationship between leaders and employees is complex. Instead of assigning blame, we should explore practical solutions to build stronger, healthier workplaces where everyone thrives.

Why This Gap Exists

Every workplace needs someone to guide, supervise, and provide feedback. That’s essential for productivity and performance. But because there are usually far more employees than managers, dissatisfaction, fair or not, spreads quickly.

What if, instead of focusing on blame, we focused on building trust, empathy, and communication? This is where modern leadership and human-centered management can make a difference.

Tools and Techniques to Bridge the Gap

Here are proven strategies leaders and employees can use to foster stronger relationships and create a workplace where people actually want to stay.

1. Practice Mutual Empathy

Both managers and employees need to recognize they are ultimately on the same team. Leaders have to balance people and performance, and often face intense pressure to hit targets. Employees who understand this reality are more likely to cooperate and problem-solve collaboratively.

2. Maintain Professional Boundaries

Superiors should separate personal issues from professional decision-making. Consistency, fairness, and integrity build trust, and trust is the foundation of a motivated team.

3. Follow the Golden Rule

Treat people how you would like to be treated. This simple principle encourages compassion and respect, two qualities every effective leader must demonstrate.

4. Avoid Micromanagement

Micromanaging stifles creativity and damages morale. Great leaders see themselves as partners, not just bosses, and treat their teams as collaborators working toward a shared goal.

5. Empower Employees to Grow

Empowerment means giving employees responsibility that matches their capacity, and then trusting them to deliver. Encourage them to take calculated risks, learn from mistakes, and problem-solve independently. If something goes wrong, turn it into a learning opportunity, not a reprimand.

6. Communicate in All Directions

Communication shouldn’t just be top-down. Invite feedback, create open channels for suggestions, and genuinely listen to what your people have to say. Healthy upward communication closes gaps before they become conflicts.

7. Overcome Insecurities

Many leaders secretly fear being outshone by younger, more tech-savvy employees. Instead of resisting, embrace the chance to learn from them. Humility earns respect and helps the team innovate faster.

8. Invest in Coaching and Mentorship

True leaders grow other leaders. Provide mentorship, career guidance, and stretch opportunities so employees can develop new skills. Leadership is learned through experience, but guided experience is even more powerful.

9. Eliminate Favoritism

Avoid cliques and office politics. Decisions should be based on facts and fairness, not gossip. Objective, transparent decision-making builds credibility.

10. Recognize Efforts Promptly

Recognition often matters more than rewards. Publicly appreciate employees’ contributions and do so consistently and fairly. A timely “thank you” can be more motivating than a quarterly bonus.

11. Conduct Thoughtful Exit Interviews

When employees leave, treat it as an opportunity to learn. Keep interviews confidential and use the insights to improve management practices and culture.

12. Provide Leadership Development

Train managers to lead, not just supervise. Leadership development programs help shift mindsets from “command and control” to “coach and empower.” This transformation has a direct impact on morale and retention.

13. Adopt Soft Leadership Principles

Today’s workforce, largely millennials and Gen Z, value collaboration over hierarchy. Soft leadership focuses on partnership, mutual respect, and shared purpose, rather than rigid top-down control.

The Bigger Picture: HR’s Role

Mercer’s global research highlights five key priorities for organizations:

  • Build diverse talent pipelines

  • Embrace flexible work models

  • Design compelling career paths

  • Simplify HR processes

  • Redefine the value HR brings

The challenge? Employers and employees often view these priorities differently. Bridging that perception gap is just as important as bridging the relational gap between leaders and staff.

Treat Employees Like Associates, Not Just Staff

When you treat employees like partners, they bring their best selves to work. HR leaders must develop strategies to keep talent engaged, empowered, and prepared for the future.

Organizational success starts with people, always. Build the relationship with your team first, and the results will follow.

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