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Why is Ethical Leadership Important in Business

I'm the owner and founder of PIT Designs. I love creating digital presence and creative digital solutions for our clients.

Posted 2 years ago on February 17th, 2021. Last modified on September 5th, 2021

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How many times have we come across peer pressure and do ethically wrong things? Or Like probably favor a candidate in a job interview because they were the same race as you etc. We are all guilty of doing something or the other. We are not all the same when we are at home, in offices, or at our community gathering. Our peers change how we behave. It is a well-known fact

We have seen many who are all authoritative at homes, but when you see them with their office colleagues, they are probably the friendliest and accommodating individuals that you might have seen.

What is Ethical Leadership

So to draw a line between what is ethical and what is not at workplaces, This is where ethical leadership comes in place and shows why it is important. For those who do not know what ethical leadership means, it can be defined as “Ethical leadership is knowing your core values and having the courage to live them in all parts of your life in service of the common good.”

Sellers can even practice unethical ways to sell their products like titan repacking kits in the black market or probably demand an extra amount if the product is scarce and you have multiple takers for the product.

This is where ethical leadership comes into place to lay out the ground rules for you to lead the way in business and after going through this list you will realize how important it is for the business.

Why is Ethical Leadership Important in Business?

  1. Your Investors are more likely to be impressed

Your ethical way of leading a business is one sure way to impress all your sponsors and investors. And this is one important element to grow your business and take it towards success.

As a leader, it's important for you to layout a clear standard for ethical business practices.

  • It Builds Customer Loyalty

Employees have the power to make or break a brand identity. If you are practicing ethical ways of promoting and growing your business, it will gain you the respect of your customers.

There are a lot of under the rug practices going on to promote brands, and customers can find out if that is happening.

As a leader, you should try your best to exemplify ethical practices with everything you do. The best way to teach employees is when they see you, that is their leader, practicing it.

  • Freedom to employees

As a leader, you should give employees the freedom to perform their job efficiently and ethically. You have to trust your employees. If you start micromanaging your employees you will end up with a lot of frustrated employees in your company.

Lay down the groundwork for a self-motivated team and it will save you a lot of time and money.

  • Have a Trusted network of vendors and partners

When you are operating a business, you should know for smooth running you need to establish trust between the vendors and partners. So if you have a vendor supplying you titan repacking kits, but they don’t trust your partners, it is your job to establish that trust so the process can go on smoothly from vendors to sellers, etc.

  • Boost Employee Morale

Keeping the employees motivated is extremely important for your business to be successful. Being an ethical leader means that you will be holding your employee to a certain standard and hold them accountable if they were to deviate from it.

  • Legal Safety

If you are making ethical decisions and ensuring ethical practices in your corporation, you are more likely to stay away from all sorts of legal trouble.

  • Healthy Working Environment

If every employee is being ethical and morally online, then your company is going to be having a healthy working environment. This means, there is no likelihood of controversy arising or office politics.

  • Attract Better Employees

Employees are what makes your business environment either friendly or harsh. If you have good ethical practices in place, it is likely to attract better employees that will fit perfectly into your company’s culture.


In 2021, every corporation is going all cutthroat to gain the maximum profits. Hardly anyone focuses on the integrity and ethical aspects of business practices. So if you strive towards such practice of ethical leadership, this will give you an edge from your competition and earn you customers and employees for life.