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What Are the 12 Ethical Principles for Business Executives?

April 06, 2021
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A set of universal standards or a personal ethic code can serve as the guide for judging between right and wrong in your daily life. Business ethics are similar in principle to standard ethics, but have much broader consequences. From the worker on the sales floor to the business executive in the corner office, decisions made on the job are typically judged by a much larger number of people than personal decisions. Thus, the fate of an employee, and perhaps the organization's fate, may rise or fall according to the perceived integrity of decisions made in the workplace.1

For example, by engaging in unfair or questionable business practices purely for the sake of profit, an overly ambitious business executive with little regard for business ethics is courting disaster. Although the bottom line may improve in the short-term, the long-term fallout from organizational and possibly public disapproval may prove fatal to the executive's reputation and the organization's sustainable success. As American investor and business magnate Warren Buffet advises, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”2

The Path to Sustainable Success

Ambition, competitiveness and market-savvy are important characteristics for success, but must be guided by a strong inner core of ethical principles.1 To achieve lasting, sustainable success, organizations need all of their personnel to make ethically sound decisions regarding job performance and personal behavior. This is especially difficult when the stakes are high and no one else is watching.3

To help establish company expectations, an executive with an inherent appreciation for ethical values can help promote a benevolent environment in which ethical behavior is encouraged and nurtured. In fact, business leaders committed to personal and organizational excellence are often called upon to define a company-specific set of ethical business practices to help employees understand the principles by which they will be judged. Once developed and implemented, this set of principles offers a path to lasting, sustainable success.4,5

Below, the 12 ethical principles in business are presented to help provide strong guidance for ethical business practices.4 Included with these principles are details that focus on the ways in which each principle can be demonstrated by both businesses as a whole and by individual employees.

The 12 Ethical Principles for Business Executives

1. HONESTY

All personnel must be committed to telling the truth in all forms of communication and in all actions. This includes never purposely telling partial truths, selectively omitting information, making misrepresentations or overstatements. Honesty also means reliably sharing both good and bad news with equal candor.

2. FAIRNESS

All dealings and relationships must be founded on a conscious commitment to fairness, treating others as you would like to be treated. Fairness requires treating all individuals equally and courteously, never exercising power arbitrarily and never exploiting weaknesses or mistakes for personal or corporate benefit.

3. LEADERSHIP

Demonstrated by a conscious effort to set a positive example of ethical behavior, leadership is a commitment to excellence through ethical decision-making. Businesses and business executives maintain their leads by constantly improving operational efficiency, worker satisfaction and customer approval.

4. INTEGRITY

Organizations and personnel demonstrate integrity through a consistency between actions and words that inspires trust and credibility. Integrity also means keeping promises, honoring commitments, meeting deadlines and refusing to participate in unscrupulous activities or business dealings.

5. COMPASSION

Fostering a business environment of empathy and compassion requires a commitment to being kind and caring toward all personnel, business partners and customers. Business goals must be benevolent, ensured by spending enough time to understand the needs and sensitivities of others, including the local community.

6. RESPECT

Respect is demonstrated by a full commitment to the human rights, dignity, autonomy, interests and privacy of all personnel. It means recognizing that everyone deserves equal respect and support for sharing ideas and opinions, without fear of any penalty or form of discrimination.

7. RESPONSIBILITY

Employees exhibit responsibility by taking full ownership of their jobs, striving to be conscious of the emotional, financial and business consequences of their actions. Taking their responsibilities seriously also demonstrates employee maturity and ability to do a job without needing strict supervision.

8. LOYALTY

Loyalty is proven by never disclosing information learned in confidence and by remaining faithful to coworkers, clients, business partners and suppliers. Loyal employees avoid conflicts of interest, help build and protect the good reputation of their company and help boost the morale of their coworkers.

9. LAW-ABIDING

Organizations must fully comply with all applicable laws and codes from local, state and federal agencies. Law-abiding businesses and personnel also adhere to industry and trade regulations, marketplace standards and any additional mandatory organizational policies, practices and procedures.

10. ACCOUNTABILITY

Accountability requires a total commitment to the ethical quality of all decisions, actions and relationships. High expectations for ethical behavior drive business practices when an organization and its personnel are held accountable to fellow employees, consumers, the local community and the wider public in general.

11. TRANSPARENCY

Committing to transparency requires making business information and policies available to appropriate groups, such as financial investors, personnel and consumers. It includes, for example, sharing criteria for price hikes, wages, hiring, granting promotions, addressing workplace infringements and firing employees.

12. ENVIRONMENTAL CONSCIOUSNESS

Organizations and personnel demonstrate a commitment to the environment by helping mitigate the effects of global climate change. Beneficial actions include reducing the negative environmental impact of doing business by improving energy efficiency to help lower carbon emissions, reducing water usage and reducing waste.

Learn to Promote Sustainable Business Success

Organizations are more focused than ever on recruiting and retaining personnel committed to moral integrity and ethical business practices.3

If you are interested in becoming a confident leader with a strong inner core of ethical principles, ready to face any business challenge, consider an affordable online MBA from the Marquette University Graduate School of Management.

With no on-campus or in-person requirements, the 100% online MBA from Marquette University offers you the leading-edge skill set needed to develop and implement ethical business principles that can immediately guide you and your organization to lasting success.


1. Retrieved on 17 March 2021, from standardizations.org/bulletin/?p=133
2. Retrieved on 18 March 2021, from inc.com/marcel-schwantes/warren-buffett-explains-how-1-mistake-could-ruin-your-reputation.html
3. Retrieved on 18 March 2021, from recruiter.com/i/how-to-recruit-and-retain-ethical-employees/
4. Retrieved on 17 March 2021, from indeed.com/career-advice/career-development/ethical-principles-in-business
5. Retrieved on 17 March 2021, from marketbusinessnews.com/financial-glossary/ethics-definition-meaning/