Ethical Leadership

Most people have long assumed that top managers are ethical people. But in the wake of recent corporate scandals at firms such as Lehman Brothers, Toyota, BP, and Goldman Sachs, faith in top managers has been shaken.

Hence, perhaps now more than ever, high standards of ethical conduct are being held up as a prerequisite for effective leadership. More specifically, top managers are being called upon to maintain high ethical standards for their own conduct, to unfailingly exhibit ethical behavior, and to hold others in their organizations to the same standards.

Ethical leadership, then, is the process of leading based on consistent principles of ethical conduct. The emerging pressures for stronger corporate governance models are likely to further increase the commitment to select only those individuals with high ethical standards for leadership positions in business, and to hold them more accountable than in the past for both their actions and the consequences of those actions.