Decades of leadership and business scandals have led many to be skeptical that anyone can be an ethical leader. Indeed, some suspect the main objective of leaders is to simply increase production and profits — sometimes using any tactics.

But this view has been changing. Research has shown that the ethics of a workplace can be directly linked to bottom-line company performance. As a result, more and more people are taking it upon themselves to ensure standards of moral and ethical conduct in their offices, starting with themselves.

What does it mean to be an ethical leader?

Be a role model of integrity. Integrity has been seen as the single most important leadership attribute across many cultures and countries. This means being credible and doing what you say you will do.

An effective leader honors commitments and expects subordinates and business partners to do so as well. He or she maintains loyalty, apologizes when necessary, and takes responsibility. Ethical leaders make the right choices for the long-term benefit. They understand that it all starts with them, and that if they don’t project the values they wish to promote in others, employees will see them as a hypocrite and possibly ignore their ethical guidelines.

As Albert Schweitzer noted, “Example is not the main thing in influencing others. It is the only thing.” And as Warren Buffett once said, “In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And, if they don’t have the first, the other two will kill you.”

Set ethical standards for the company. This is a critical first step in creating an ethical organization. These standards must be clear so that all employees understand what is meant. Employees must know how they should behave toward one another, customers and business partners. They also need to know what is unacceptable in the workplace.

Provide training. Managers and employees should be provided with training on the types of ethical dilemmas they may face, such as with customers or employees. This can enable them to practice how to respond to these possible issues in a way that supports the company’s ethical codes. In addition, training on how to interpret the firm’s standards is a good idea to avoid later confusion over interpretations.

Inspire trust . As expert and author Patrick Lencioni noted in his bestseller, “The Five Dysfunctions of a Team,” the fundamental base of an organization is trust.

When people trust each other, they can focus on getting the work done, asking for help when they need it, and solving business problems. They do not need to spend energy manipulating others, worrying about being mistreated, dealing with harassing employees, etc. This trust starts at the top — when an organization’s leader is reliable, is willing to admit mistakes and is trustworthy, subordinates have confidence in leadership. Ethical leaders recognize that by leading by example this creates an environment that fosters productivity.

Enhance workplace relationships. Ethical leaders understand that all employees must be treated with dignity and respect, regardless of their rank in the organization or their demographics.

They know that their work environment must be safe and free of harassment, discrimination, workplace violence, and bullying of any kind. They further know that there should be fair and equal opportunities for promotion, and that they should encourage employees to pursue training and development opportunities to advance in their careers. They also know that employees are more than just workers — they have lives outside of work that need to be considered in order to keep them healthy.

Illustrate transparency. An ethical leader realizes subordinates watch him or her closely to decide how to act. The leader makes decisions carefully and communicates them in a timely fashion, encouraging transparency in issues that impact employees rather than secrecy or gossip.

Ensure compliance with ethical standards. After policies are clear, an ethical leader needs to monitor employees to ensure compliance with the standards. Employees need to be encouraged to not only follow procedures, but also to report ethical violations. Then actions should be taken to punish violations and reward compliance. When a leader uses rewards and punishments to help ensure appropriate behaviors, employees are less likely to engage in unethical behavior and less likely to have relationship conflicts with co-workers.

We need to do our part to ensure that our leaders are ethical. As Mahatma Gandhi noted many years ago: “There are seven things that will destroy us: wealth without work; pleasure without conscience; knowledge without character; religion without sacrifice; politics without principle; science without humanity; [and] business without ethics.”

Joyce E. A. Russell is the vice dean and the director of the Executive Coaching and Leadership Development Program at the University of Maryland’s Robert H. Smith School of Business. She is a licensed industrial and organizational psychologist and has more than 25 years of experience coaching executives and consulting on leadership and career management. She can be reached at