Business Ethics for Business Owners: Your Role as a Leader

In the first entry in this series Business Ethics for Business Owners: Part 1- What Are They?, Adrienne Fitzer, PhD, founder/CEO of ABAC, LLC, introduced business ethics. She asked readers to jot down what currently guides the decisions that they make as business owners and to think about the values they hold that can help them make decisions that are  “right” for their company in the future. This week, Dr. Fitzer examines a business owner’s role as a leader when developing business ethics for their company.

Welcome back!  At this point you should have developed a core list of values, aims, goals, or beliefs that will function as the foundation for the development of your company’s business ethics. As the owner(s) of your business, this has to come from you and will help define the company that you own, so take another look at that terrific list and then continue.

While you may be a business owner, there are many owners that don’t function as leaders in their company. If that is you, it is okay, forward this to the folks in your company that do function in leadership roles because today I am going to continue our conversation from the angle of a leader committed to developing business ethics for a company. In that position- what is your role? 

Your Role as Leader in Developing an Ethical Business

In the article “Functions of organizational leaders in cultural change: Financial and social well-being” published in the Journal of Organizational Behavior Management  in 2015, Dr. Ramona A. Houmanfar and colleagues write:In short, leadership behaviors include effectively communicating the mission and vision of an organization, cultivating a motivated workforce, and ensuring adequate resources for production.

but they also say later in their paper …an organization is said to have values when its employees are granted the opportunity to change the organizational environment in ways that improve it and are reinforced for doing so.

Now let’s go back to the question 

“As a leader in your organization (owner or otherwise) committed to developing business ethics for the company, what is your role?”

Your role certainly includes all of the leadership behavior described in the first quote, but it is the second quote I included that really stands out to me.  There is probably no greater responsibility of a leader than to grant your employees the opportunity to help improve your organization.

If this never occurred to you before or, if you have never been quite sure how to do that, that is okay, because now that you are planning on developing a set of business ethics for your company, it is the perfect time to give your employees the opportunity to improve the organization.

To start, your role as a leader during this time is to create a team of employees that will be intimately involved in the development of the principles and standards you will all use to make decisions and, more importantly, that will impact their work environment. (If you don’t have employees don’t worry, I will discuss your role in a bit.)

In many ways, your employees know your business better than you do. Don’t forget it. Seriously. Don’t forget that, ever. If you want to improve your business then ask the people who know the business what needs to be improved.

Developing Business Ethics Guidelines for Decision Making: Step 2- Brainstorm with your team

Provide the list of values, aims, goals, or beliefs that you want to function as the foundation for the development of your company’s business ethics to the team of employees you have decided to include in this process. Also provide them with the list of areas that I provided last week (see side bar) and ask them the following questions:

“Which of our processes and day-to-day operations in these areas align with the values on this list?

“Which of our processes and day-to-day operations in this areas do not or need improvement?”

Remember, your role as a leader is to not just ask what your employees think, but give them the opportunity to help effect change. Do not dismiss anything your employees say, no matter how hard it may be to hear. I get it. It is your company…it is hard not to take things personally, but don’t get defensive!.

If you are not sure why someone mentioned something, thank your employees for sharing and then ask for clarification, or in other words, ask them to help you better understand what about that process or practice doesn’t fit (actually you should always thank your employees for sharing).

Don’t expect to get this done in one sitting. You may find that some areas take up a whole hour to discuss or discover things that apply to various aspects of your company and it may take more time to figure out the extent.

In many ways, your employees know your business better than you do.

Don’t forget it.

Adrienne Fitzer, PhD

Areas to Evaluate with Your Team

  • Financial transactions
  • Human relations
  • Employee/Employer Relationships
  • Business partnerships
  • Customer relationships
  • Information & communication tech
  • Social media use
  • Record keeping
  • others?

Here are some scenarios to help you envision how this could go.

Value:  “Do unto others as you would want done to you.”  

Your role as a leader is to ask your employees about practices that they wouldn’t like as customers or clients. The following are some examples of what might come up.

  • Financial transactions: Someone from billing says – “We don’t pay people on a regular schedule. It is sometimes on the 1st of the month and sometimes the 7th. My spouse and I know exactly when their check is coming each month and it helps a lot. I think the people who work here would like that too.”
  • Customer relationships: Someone in the office says “A customer recently sent an email to our general mailbox and I have no idea who checks that! They called and complained that not only did they email, they left a message on our twitter account. Does anyone check that daily? I know it is important to me when I have my messages returned within 24 hours, I think our customers will too.” 

Goal: To promote and ensure a safe and healthy work environment.

Promoting a safe and healthy work environment requires us to consider all possible things that we do or ask others to do. It is incumbent upon us to ask our employees what they need and what they think we do as a company that could put others at risk.

Here is one scenario that could come up that I (Adrienne) have been noticing lately.

  • Information and communication technology:  I have seen an increase in live video conversations with people calling  in while driving their car. You know the ole “I will be driving at that time but I can speak.” Well it has graduated to “I will be driving at that time but I can log in and join the video chat” When setting up calls, ensure that the person you are talking to is able to take the call in a safe way- i.e.  schedule calls when individuals are not operating heavy moving machinery. 


You have likely all seen examples of it (or done it). Folks driving with their camera on to participate in live conversations or interviews while driving.  It is scary enough to know that folks text and drive. The recent phenomenon of individuals looking at their phone to participate in live video calls and interviews (even just for a second to “make eye contact”) vs. looking at the road is really problematic. Don’t set up situations that requires folks to video chat while driving. You are putting them and others at risk…and for what? A social media opportunity? Don’t do it.

For those of you that do not have employees: What is your role as a leader?

Well- this exercise may not be as easy for you without input from others but you should try it anyway. Pull out that list values, aims, goals, or beliefs that you want to function as the foundation for the development of your company’s business ethics. Now take some time to think about the purpose of your company.

It is not only what you sell and why you are going to sell it, but the values that support HOW you are going to make and sell it. I can’t take credit for that idea. If you don’t have it, please stop everything and hop on over to wherever you buy books to get a copy of  “It’s Not What You Sell, It’s What You Stand For: Why Every Extraordinary Business is Driven by A Purpose” by Roy M. Spence, Jr. 

Your company’s purpose and the values will drive not only how you produce your product or service but how you will sell it, who you will sell it to, the kind of education you will provide to the community about your products or services. It is how you will motivate the actions of the people who work for you (in time) or otherwise represent your brand and it will guide the development of your business ethics. 

With that in mind- Do you have vendors, clients, customers, or advisors you can survey about your practices? They may be a great source of information. Otherwise, sit down with a trusted friend or mentor and do the activity I described above. I would even be happy to work with you for an hour to help you get started!

Next week I am going to start to talk about developing those business ethics! I can’t wait!


Continue Reading:

Part 3- Preparing to Write Business Ethics