If you have ever tried to put into words what makes a good leader and have struggled a bit, take a gander at The Magic of a Great Business Leader. Jeannine Bauer does a great job of introducing some of the qualities of a great leader and also touches on ethics:
“These leaders have one primary and broad-based goal — that is, to do the right thing for their organization. In general, this means to pursue the success of the organizations according to the goals set for it. But on a more subtle level, doing the right thing will also be reflected in how this leader treats customers, employees, and suppliers. This leader’s underlying sense will be that using a win-win approach with every level of stakeholders will always lead to greater net results for the organization. Thus, the daily life in such an organization, in both its internal and external interactions, will feel positive, ethical and satisfying to all involved.”
I think she is spot on in her overview of great leaders, but I would take the ethical angle a bit further even. In my idealistic world view, great leaders have to be the most ethical individuals you have ever met, whom are not willing to compromise on moral issues for the sake of making a few bucks. Further, they need to be consistent in their representation of their ethical framework and how it comes into play during the regular mix of daily business. Employees, peers, customers, and any other stakeholders, should all have a relatively strong certainty that the leader will or will not jive with a certain scenario based upon their ethical framework. Such consistency removes uncertainty and doubt, and also sets a good example for everyone.
As a practical example, imagine you are in the finance department of a company with a great leader, whose actions have established a clear precedent for what to do in questionable situations. You come across a journal entry that is an error but makes the company look more profitable. You realize that your boss is responsible for the error and know that correcting it, or pointing it out might negatively impact your career. However, you also know that the great leader whom has exemplified strong ethics (let’s assume he or she is the CEO or CFO in this situation) would unwaveringly expect you to correct the error and identify it to prevent future errors. Your ability as an employee to do the right thing is greatly increased by the ethical example set by the company’s great leader.
I would also argue that companies lead by great ethical leaders have a greater propensity for stronger overall business ethics and a desire to pursue corporate social responsibility initiatives than those lead by less ethical leaders.