Principles of Business Ethics!

Our personal ethics guide us in distinguishing right from wrong and making decisions in our daily lives. Similarly, business ethics can serve to guide a company's behavior, but the results can have more far-reaching implications. The decisions of everyone involved with a business, from customer service staff to the CEO, may come under public scrutiny, and one unethical action can harm an employee's prospects or the future of an entire company.

Basics of Ethical Behavior

At its core, ethical behavior is acting in a way that's morally defensible. Ethical business practices include producing high-quality and safe products, paying workers fairly, and telling the truth in advertising. A company's morals might also lead it to commit to creating more sustainable products, donate to local charitable causes, or avoid advertising with politically biased media outlets. Employees within a company might also have their own codes of ethics related to their specific professions. For instance, financial professionals are legally obligated to act in their clients' best interests.

The 12 Ethical Principles for Businesses

Ethical businesses establish a workplace culture that values principled behavior and encourages employees to make ethical decisions even when their managers aren't watching. Executives should lead by example, following the 12 principles of operating an ethical business.

1. Honesty: Employees must always tell the full truth, without misrepresenting or omitting facts that may be less than flattering.
2. Fairness: All business relationships, both internal and external, should involve respectful treatment of others, without exploiting another person's mistakes or weaknesses for your own gain.
3. Leadership: Ethical businesses start with ethical decision-making at the highest levels. Leaders must always strive to satisfy customers, keep workers happy, and improve the efficiency of the business.
4. Integrity: An ethical company's word is its bond. The business and its staff should keep their promises, meet deadlines, and ensure that their behavior reflects their values.
5. Compassion: Create a caring business environment centered around understanding others' needs and acting with kindness toward employees, customers, and business partners.
6. Respect: Acting respectfully toward all personnel should be a bedrock principle of any business, including protecting workers' privacy, preserving their dignity, and safeguarding them from discrimination.
7. Responsibility: Employees of an ethical business take full responsibility for their duties and the consequences that can stem from their actions. Responsible workers should be able to do their jobs well without strict oversight.
8. Loyalty: Everyone involved with an ethical business should be loyal to their coworkers, business partners, and clients, acting to protect the reputation of the business at all times and never disclosing confidential information.
9. Adherence to Legal Standards: The business and its workers must always comply with all relevant laws, regulations, and industry guidelines.
10. Accountability: Employees and executives at an ethical business should always be accountable to the public and to their fellow employees for their actions.
11. Transparency: While not all business information can be concealed, ethical employees do their best to be clear and up front about their actions, including making information about the business available to investors and customers and being forthcoming with coworkers about hiring, wages, and promotion opportunities.
12. Environmental Consciousness: An ethical business should minimize any negative environmental effects that could be caused by its operations and work to protect natural resources and lessen the impact of climate change.

Ethical Business Practices in Action

Businesses that pride themselves on their ethical practices often build a positive reputation and earn a loyal customer base. For example, Patagonia has long been a pioneer in sustainability, earning customer loyalty with initiatives like their product repair program and their commitment to sourcing eco-friendly materials. Ben & Jerry's built their business with an eye toward supporting environmental protection and human rights, advocating for social justice while also sourcing ingredients from farmers that offer fair working conditions and use sustainable farming practices. And the Body Shop has been at the forefront of ethical ingredient sourcing and opposing animal testing since the company's founding. Companies like these have attracted devoted customers who feel good about supporting ethical businesses.

Further Reading

• What Are Business Ethics, and Why Are They Important?
• Understanding Business Ethics
• What Are Business Ethics?
• Three Reasons Why Business Ethics Are Important
• Navigating the Ethical Horizon of Global Business
• Three Reasons an Ethical Business Leads to Profits
• A Culture of Ethical Behavior Is Essential to Business Success
• Cultivating Ethical Business Practices in Your Organization
• Tips for Creating an Ethical Business Culture
• Can We Make Businesses More Ethical?
• How Ethics in Business Drive Success
• A Guide to Why Business Ethics Are Important
• When You're a Leader but You Can't Stomach What Your Company Is Doing
• Code of Business Conduct and Ethics