There is a lack of ethical leadership. Unethical leadership has rendered many organizations ineffective in their efforts to achieve success.  An example is Enron, an energy-trading company that collapsed after a major accounting fraud scheme was revealed in 2001. What is known is that ethics is an essential component of servant leadership and servant leaders’ decision-making processes. 

A lack of consistent business ethics in decision-making among business leaders has become problematic for contemporary organizations.  Adelphia Communications was a large cable company founded by John Rigas who was CEO and chairman. He employed his sons and son-in-law and used company funds to buy back company stock and used it to purchase perks and went bankrupt. The list of such ethical failures is lengthy.

Business ethics is not  a new concept. Cicero (106-43BC), a businessman, lawyer, politician, and orator, became a philosopher and wrote DeOfficiis (Moral Duties) in 44BC.  Cicero’s stance was that a businessperson could be ethical and prosper at the same time.  The four cardinal virtues of Cicero’s ethical leadership are wisdom, justice, courage, and temperance.  A study of Cicero’s virtue theory of ethics might form the basis for teaching ethics, moral behavior and practical wisdom in modern management and business practice.

The ethics ‘Master Class’ is comprised of four main categories of business ethics.  They are Communitarian ethics with a focus on a company’s duty to the business community or its overall corporate social responsibility and will evaluate the expectations of brands on themselves, on other businesses, and on their communities, as well as the consequences their actions have on others.  Deontological ethics centers on a sense of duty.  Utilitarian ethics’ focus is creating the ideal outcome for the greatest number of people and can be helpful in decision-making.  The premise of virtue ethics is that virtue should be the motivation for ethical business conduct. 

A code of business ethics can help leaders or a human resource department to identify unethical behavior or unethical practices in a business environment.  Ethical practices can determine reputation.  A business known to have ethical standards may attract better, more engaged employees.  Trustworthiness and a company’s reputation can affect whether their customers, clients and stakeholders want to do business with them.

Ethical leadership is about capacity building so that diverse groups can work collaboratively together toward common goals.  Ethical leaders pay special attention to building the capacity of followers for the purpose of sustainability.  Shaping organizations so that individuals from different cultures live and work peacefully is a challenge for management.

Following Cicero’s natural law, in the context of corporate reputation, what kind of corporate behavior would be praised by the public and why?  For Cicero, glory emanates from goodwill, faith in one’s competencies or admiration.  Goodwill comes as a result of the willingness to serve the community.

A good and moral life, according to virtue ethics, is a life responsive to the demands of the world.  In the pursuit of organizational ethics, top leaders should act as role models by demonstrating ethical leadership if they expect employees to follow their example in ethical work behaviors.  Ethics and integrity are vital to team building and effective leadership. The ability to serve and build trust is contingent upon ethical leadership—full stop.

In the Business News Daily, Sean Peek wrote an article for business owners and entrepreneurs who want to establish a culture of ethical behavior among their employees highlighting that unethical behavior has consequences for future business.  Ethical behavior includes honesty, fairness, integrity and understanding.  To encourage an ethical workplace culture, one way is to establish a company-wide code of ethics. If an ethical tone is set at the top and followed by management, everyone who works there will hold themselves and each other to those standards. Likewise in Business News Daily, Kaifeng Jiang, lead author and Jasmine Hu, co-author, cited several key takeaways from their research that could help business owners and managers achieve high quality service and a company culture of consistently ethical behavior. 

A primary goal of the servant leader is to develop future servant leaders.  One way is through ethics.  Through the process of moralization, followers perceive leaders as ethical. Trust is earned by honorable business leaders who demonstrate ethical behavior by being honest and forthright with their customers and constituents.  Potential clients must trust the leaders and employees supplying goods and services to have integrity and adhere to an ethical code of conduct. Effective leaders follow the advice of Ernest Hemingway, who wrote:                               

                                      “The way to make people trust-worthy is to trust them.”

The late Edgar Schein—MIT Professor Emeritus and a genuine icon in the field of organizational culture—sums it up this way:

                  “The only thing of real importance that leaders do is create and manage culture”.

He also admonished that Culture is the “most difficult organizational attribute to change”. 

In a 2019 interview with author Dr. Ernest Jones, Kenneth Miller noted that,