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The Alternative Board Blog

How to Build an Ethical Workplace Culture

Mar. 6, 2024 | Posted by Lee Polevoi


Most of us understand what it means to act in an ethical manner. CEOs and business owners frequently advocate a set of ethics by which to run their organizations, helping the workforce maintain a “moral compass” when it comes to interacting with both employees and customers.

Obvious benefits accrue when a company’s values are embraced across the board. These benefits include:

  • A boost in productivity
  • Greater employee retention
  • A strong reputation in the marketplace

Unfortunately, some businesses grapple with ethical issues and look for ways to form a culture that brings out the best in everyone. Here are tips to help ensure an ethical workplace:


Everyone lives by the same rules.

Ethical shortcomings sometimes occur when a business owner or CEO treats some employees differently from others. In some cases, a favorite employee’s episode of misconduct is ignored or glossed over, while strict disciplinary attention is paid to another employee’s infractions.

In an ethical workplace, this just doesn’t fly. As we have noted before, “Make sure everyone within the organization is subject to the same code of behavior, regardless of their position, and that when infractions occur, the consequences apply across the board.”


Emphasize “lessons learned” from mistakes.

An overly punitive culture can lead to an organization-wide fear of taking chances on innovation or otherwise attempting to think outside the box. In an ethical workplace, such minor transgressions occur within a “safe place,” as Business.com puts it, so employees can “make mistakes take risks, and ask for help.” In this safe place, there’s room for “reflection and, ultimately, growth among your team.”


Support anonymous reporting of unethical conduct.

It’s rarely possible for senior leadership to stay aware of every aspect of employee conduct. For this reason, it makes sense to institute a system whereby employees can report any unethical behavior (verbal or sexual harassment, discriminatory actions) so actions can be taken to rectify the situation.

Not only does this help prevent small mistakes from turning into organizational issues, but this process also “builds trust between you and the team,” says Indeed, as long as “the system you implement is easy to use and allows anonymous reporting.”


Sponsor training in ethics.

When ethics is ingrained in corporate culture, it’s a natural step to include ethics training during a new hire’s onboarding process. This type of training can also be part of an ongoing program focused on how to make the right ethical choices in difficult workplace circumstances. New and veteran employees alike will benefit from such an offering.


Recognize and reward ethical conduct.

Just as employees are (or should be) applauded for outstanding achievements and initiative, there can be recognition and reward programs based on ethical conduct.

When an employee helps a customer in a difficult situation or otherwise demonstrates that he or she is committed to behaving with integrity, it’s useful (and morale-building) to highlight that individual in an all-staff meeting and/or the company newsletter.


Be the role model a leader should be.

All the ethics reporting and training in the world won’t amount to much if the CEO or business owner fails to act in a transparent and ethical manner. Employees tend to emulate the behavior of leadership, so it’s imperative to “walk the walk” at all times.

As DeakinCo. notes, “Leading by example will send a strong message to employees and clients alike that the organization’s values are a lived reality rather than empty words on paper.”

In business as in life, ethics matter—perhaps even more so in our present times. A business with a reputation for integrity has a competitive advantage over other businesses less inclined to behave with honor.


Read our 19 Reasons You Need a Business Owner Advisory Board


Written by Lee Polevoi

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