27-05-2025
- Business
- The Herald Scotland
Ethical leadership is no longer optional – it's essential
Across industries, scandals have shown that wrongdoing often starts with individuals, but it flourishes in cultures and environments that tolerate or even reward unethical behaviour. To build lasting success, organisations must foster a culture where integrity is not just encouraged but becomes the norm.
Ethical leadership, done right, is a source of non-financial competitive advantage as well as financial, especially when it comes to brand resilience, talent retention, and long-term sustainability. In its annual World's Most Ethical Companies report in 2024, Ethisphere revealed that publicly traded companies recognised for their ethical practices outperformed a comparable global index by over 12 per cent over a five-year period.
The tone must be set at the top. Leaders have a critical role in modelling ethical behaviour and establishing the norms that shape organisational culture. But ethical responsibility doesn't reside solely in the C-suite. A culture of doing the right thing must extend to every level. From interns to executives, everyone has a role to play in upholding ethical standards and "doing the right thing".
Business professionals sit at the crossroads of organisational integrity and ethical decision-making. When anyone sees something wrong, they must be prepared to speak up, and those in leadership positions must be willing to listen and follow up as appropriate.
Leadership in ethics isn't about job titles – it's about action. Silence in the face of unethical behaviour is not neutrality, it's complicity. Problems left unchallenged only grow more damaging, both for the individual and the organisation. That's why empowering people to raise concerns is vital. When individuals are encouraged and supported to speak up and such matters are appropriately considered, organisations make better decisions, avoid reputational damage, and build stronger, more resilient cultures.
Ethics is the conscience of any organisation. It shapes corporate culture and influences behaviour, guides decision-making, and underpins long-term thinking. Ultimately, it builds trust - with investors, regulators, employees, and the public. These are just some of the pillars that will be covered at ICAS's Ethical Leadership Forum on June 3.
While leadership must begin at the top, it mustn't end there. Every professional, regardless of their stage in their career, should see themselves as a leader in ethics. Organisational cultures are built when everyone, at every level, chooses to lead.
James Barbour CA, is director, policy leadership at the Institute of Chartered Accountants of Scotland (ICAS). ICAS's online Ethical Leadership Forum is on Tuesday June 3.
Agenda is a column for outside contributors. Contact: agenda@
