Imagine visiting a restaurant that exudes fancy, wealth, and bourgeois, and you proceed to order their best meal. As you wait eagerly, the atmosphere feels luxurious, and your account balance shivers. Suddenly, you catch a glimpse of the chef sneezing into your meal. As if that’s not enough, he picks his nose and brings your food to you, acting as if nothing happened. Suddenly, it doesn’t matter how fancy the restaurant is or what advertisements you’ve heard; that horrifying experience has destroyed your appetite.
No matter how hungry you were at that moment, the hunger would disappear, and you would find the fastest excuse that comes to mind to save yourself from disgust, or you would find the quickest way to sue the restaurant. Now, picture your organisation as the dish and the chef as the leader of the company. You can invest millions in marketing and advertisement and develop the best logo, but if the leadership in your company is busy sneezing or displaying unethical behaviour, the entire meal—or brand identity—is compromised.
“Errors, bad behaviour, and poor judgement in leadership can negatively impact a company’s brand and reputation. For business success, it is critical for organisations to fill their C-suite with ethical leaders,” says a blog post by the Harvard Division of Continuing Education. C-suite refers to the executive-level managers within a company who have titles that start with the letter C, such as Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Operating Officer (COO).
These leaders play a significant role in shaping the organisation’s vision, strategy, and, more importantly, its values and ethical standards. However, note that ethical leadership is not limited to C-suite leaders but extends to anyone in an organisation that exercises leadership qualities. Additionally, the statement by the Harvard article underscores the significance of ethical leadership in developing a company’s corporate brand. But what does ethical leadership mean?
According to an academic paper titled “Ethical Leadership: A Social Learning Perspective for Construct Development and Testing,” ethical leadership is “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making.”
In simple terms, ethical leadership is about leading by example—demonstrating the right way to behave through your actions and interactions with everyone you encounter, from employees and colleagues to support staff. It also involves encouraging others to follow your lead by communicating effectively, rewarding positive behaviour, and guiding them in making ethical decisions. As a leader, you embody the values your company stands for.
At its core, ethical leadership fosters a culture of significant values such as integrity, transparency, professionalism, respect, and accountability. Leaders who demonstrate ethical behaviour consistently prioritise fairness, stakeholder welfare, and corporate responsibility. They ensure that decisions are made with profitability in mind and awareness of the broader social and environmental impact.
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“With good ethics, leadership makes more sustainable and enduring choices for profit based on sound ethics and values. Leadership will better balance the short and long term, recognising that short-term profits that injure society or have huge negative costs to society do not ultimately endure. Poor ethical choices in leadership ultimately destroy the franchise of the business and its long-term competitive advantage,” said Olu Akanmu, CEO, Board Advisor, Phillips and Samuel Ltd, Executive in Residence at Lagos Business School.
Olu Akanmu’s statement focuses on the importance of ethical leadership in making sustainable decisions that consider both short-term gains and long-term impacts on society. For example, former CEO Paul Polman of Unilever adopted a long-term strategy focused on sustainability.
Instead of prioritising short-term profits, Polman emphasised the importance of ethical sourcing, reducing environmental impact, and improving the livelihoods of communities involved in their supply chain. This leadership approach enhances consumer trust and brand loyalty, differentiates the brand in the marketplace, engages employees, and builds strong community relations, all contributing to a robust and resilient corporate brand.
“Paul Polman, former CEO of Unilever, challenges business leaders to ask themselves if they care about the world’s problems—and if they do, how far are they willing to push their companies to help solve them?” says an article by Harvard Business Review titled, Former Unilever CEO Paul Polman Says Aiming for Sustainability Isn’t Good Enough—The Goal Is Much Higher.
According to Forbes’ article “The Role of Ethical Leadership in Long-Term Organisational Success, “Ethical leaders are often regarded more favourably by stakeholders, customers, investors, and the public due to their consistent adherence to principles prioritising honesty, integrity, and social responsibility.
“This fosters trust and confidence, creating a strong reputation that resonates with individuals and groups who value transparency and the greater good. This positive reputation enhances brand value and, in turn, attracts top talent.”
This approach to leadership is essential for corporate brand development because a company’s brand is much more than its logo, name, visual identity, product, or service—it encompasses the public perception of the company as a whole.
Therefore, if an organisation’s leaders exercise ethical leadership, they will build trust with customers, employees, and investors, strengthening brand loyalty and enhancing the company’s reputation. Conversely, unethical behaviour at the leadership level can lead to scandals, legal issues, and a loss of trust, which can severely damage the corporate brand.
Chinedu Izuchukwu Ndigwe is a Management Scholar Academy (MSA) research assistant at the Department of Research, Lagos Business School.
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