Essential Ethical Principles for Business Execs

Decisions and actions made at all levels of a company have an impact on how a brand is perceived. To make sure correct choices are being made, ethical policies are put in place, which helps people to stay accountable. Ethical principles for business are determined by the ever-changing society they serve and are grounded deeply in core values. Although ethical choices are subjective, there is a consensus on what a positive code of conduct should look like. Throughout this article, we will discuss what ethical principles are and how they have an impact on your business.

What Are Ethical Principles for Business?

Ethical principles in business point to company-wide morals laid out by the senior team. When put into a written Code of Ethics, these principles will consider regulations as well as industry norms and values, and will direct the way people act. In this day and age, thanks to social media and the drive for transparency, customers are more invested in company operations than ever before. When a company acts according to a strong moral compass, it’s easier to insert trust into the community. You can head over to St Bonaventure University to find out more about why ethics is important in business. Closely monitoring your company’s actions in relation to ethics and the law is the only way to ensure long-term success.

Integrity

People often struggle to define integrity, which makes it one of the more difficult ethical principles to abide by. As a business executive, integrity takes into account your whole character. You can demonstrate integrity in the way you act, think, and speak. This ethical principle is intrinsically linked with courage because it can sometimes be difficult to do the right thing when no one else is. As a senior in business, you need to fight for what you believe in without letting anyone contradict your beliefs. If you can master this, the chances are that your company will breathe integrity because ethics trickle downhill.

Promise Fulfillment

Having integrity implies that you can be trusted, which is an essential part of being a business executive. Part of this trust requires following through on promises that you make. If you tell someone you will carry out an action by a certain date, make sure it’s done. When you start to break promises often, your integrity and trustworthiness may be brought into question. That being said, we are all humans and mistakes do happen from time to time – make sure you own your mistakes and apologies for breaking a promise.

Fairness

Business executives are expected to be fair in their daily actions. They need to command respect through accepting everyone, not exercising their power, and viewing everyone as equals. A large part of being fair is keeping an open mind, especially when it comes to investigating complaints. When hiring new talent, executives need to make sure that their policy reflects equality guidelines – everyone deserves a chance irrespective of their background.

Honesty

Honesty is tied in closely to integrity and promise-keeping and is one of the most fundamental components of ethical codes of conduct. Business leaders need to be open in their communications, and never attempt to mislead people. Being completely transparent is a great way to accomplish this. If you are found to be dishonest in communication with employees or customers, your integrity and trust will be brought into question. Acting with honesty is easy but recovering from dishonesty is near impossible.

Compassion

Compassionate people can easily demonstrate that they care for those around them. When it comes to business, compassion can be seen through interactions with society. When the world goes through turmoil, business executives can use their platform to carry out charity work. At the time of writing, hotels are opening up their spaces to home refugees fleeing from war in Ukraine. This action shows the public that they care on more than just a surface level.

Inside the company, business leaders need to consider the feelings and thoughts of their staff. When the staff feels valued, they are more likely to carry out their work at a high standard. Executives can show compassion to their employees by offering a day of rest after extremely strenuous periods.

Loyalty

Business executives can demonstrate loyalty to their company by complying with the wider ethical principles. This means that their actions are made with the progression of the business in mind, both in the public space and the legal sense. However, loyalty isn’t more powerful when it comes to doing the right thing in instances of unethical practices. When executives need to speak up, they need to break their loyalty by holding themselves with integrity.

Law Abiding

Laws are made to govern society and make sure rules are followed. Typically, they are made with ethics in mind but are a separate entity to ethical principles. If someone is ethical, they will follow the law even when they don’t agree with it. In business, executives are responsible for ensuring that policies and regulations are followed to the letter.

Being Respectful

Mutual respect between all parties is the heart of ethical principles in business. Everyone in the workplace needs a platform to be heard and share opinions, free of the judgment of other people. When a company nurtures a respectful environment, it paves the way for effective collaboration on projects. Everyone in the business, including executives, can show respect by being polite during disagreements, listening with an open mind, being conscious of non-verbal communication, and staying away from making personal attacks. If all else fails, remember the saying “treat others in the same way you would like to be treated”.

Committing to Excellence

Executives have countless duties to carry out. Striving for excellence in every task is a great way to remain ethical. Carrying out excellent work also helps to demonstrate loyalty, caring, and integrity. At various intervals in their working life, business executives will take the time to reflect on their work. Doing this helps to find ways to improve processes and boost excellency.

Accountability

The code of ethical conduct exists partly to keep all employees accountable, especially business executives. When everyone in a workplace is on the same page, there is a higher chance of nurturing a positive environment. Positive actions include effective time management, performing to a high standard, and using company resources in the correct way. When people make mistakes, they should be given a warning for breaching the code of ethics. If the behavior continues to dispute reasonable chances for correction, an employer can begin disciplinary action. It’s important to include the code of ethics in employee contracts, otherwise, any investigatory outcomes will be easily appealed.

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As well as employees being accountable within the business, executives are held accountable by the general public. Interacting in a professional manner in all communications is essential, and this includes social media, business, and telephone. Public accountability pushes businesses to act ethically in all their decisions.

Morale and Reputation

Business executives facilitate a company in building a solid reputation while helping to boost morale. They do this by not carrying out actions that would undermine the company’s values. If anyone in the company carries out inappropriate actions, it is up to business leaders to take necessary actions to account for the behavior on behalf of the company – this may be through public apology and taking necessary disciplinary action.

Senior leaders shouldn’t need to consistently put out fires. Instead, it is their responsibility to train staff on ethical policies, which should be an ongoing activity. When all staff knows what is expected of them, it’s less likely that inappropriate behaviors will emerge. A great way to promote great morale and keep company reputation high is to regularly award your staff.

Leadership

Management teams, especially business executives, need to personify the company code of ethics. In doing so, every action they make will consider the ethical position of the company. When coming across tough ethical decisions, a great way to decide if you’re going to make the right choice is to carry out a litmus test.

  1. The gut test. Take a moment to step back and ask if you can live with the decisions with no regrets. This requires people to have a conscience and can be less effective in group decisions.
  2. Authority. Think about an authority figure in your life or someone you look up to and ask if they would approve of your action. Would they be disappointed in you or not? Your company may have an ethics officer who is responsible for casting judgments – would they approve?
  3. Media test. Would you be comfortable having your actions broadcast to the world? If you’d rather the public didn’t know, the chances are you need to rethink your actions.
  4. Consequences. Whether positive or negative, every action has an outcome in the business world. Take time to consider all possible outcomes. If you can see negative consequences, no matter how far down the line, choose to take a different path.
  5. Legal test. Ethical people make sure they stay up to date with the latest legislation and policies. If your actions don’t take into consideration legal policy, you should steer clear.

Run each of these tests when you’re posed with a tough decision. You should remember that they are a guide, as opposed to a rigorous ruling. Depending on your values, you may struggle with parts of this test. For the best results, keep in mind your company’s values and set them aside from your own.

Trustworthiness

We’ve mentioned throughout that certain ethical processes help to increase trust in a person. Ethical principles help to govern trust both within the company and externally to customers. Business executives, and the wider workforce, need to act in a trusting manner, which will help to increase consumer confidence. When breaches to the ethical code of conduct are made, trust is shattered in the public’s eye. Keeping trust is relatively easy but recovering from the broken trust is extremely difficult.

Responsibility

On every level of a business, employees need to carry themselves with personal responsibility. Doing this can be as simple as carrying out assigned tasks to a high standard. When mistakes are made, take responsibility and own them. Everyone needs to work together for a business to be wholly ethical, and responsibility is a large part of that process.

Environmental and Social Consciousness

Ethical principles evolve alongside the views of society. In recent years, the public has become interested in how companies operate. In particular, there is enormous demand for a company to be conscious of the environment. As a business executive, you should stay up to date with new methods of being environmentally friendly – sit down and codify your green policy.

Social consciousness is another important part of ethics. Businesses need to understand that they can work hard to make a profit while giving back to the community. Keep up to date on current affairs and see where your platform can offer support.

Transparency

Having clearly defined ethical principles is important, but businesses need to make sure they are transparent. Display your code of ethics with honor and have full accountability from within the company, and in the court of public opinion. When you carry out positive actions aligning with your ethics policy, broadcast it to the world. When the world can see that a company is having a positive impact, they are more likely to choose them for services.

Ethical principles are the pillars that help a company present itself to the world and define how all employees should act. Actions travel like water, which means that they start at the top and trickle down to the bottom. Business executives are responsible for embodying ethical principles and steering the ship of positive actions. With the ethical principles above, you can create a powerful code of ethics. Remember, ethics are underpinned by values, so don’t include anything that you will struggle to fulfill. Breaching your code of ethics will damage public trust, so make sure your code of practice is attainable.