Continuing reports of frauds and scandals in the media have placed ethical behavior high on the priority list of many organizations. The problem is that ethical problems erode the trust of both leaders and organizations. Despite the importance of leaders who are trustworthy, evidence suggests that business firms have many ethical problems. An ethical leader is honest and trustworthy and therefore has integrity.

Integrity refers to loyalty to rational principles; it means practicing what one preaches regardless of emotional or social pressure. Ethical and moral leaders strive to treat fairly all interested parties affected by their decisions. To do otherwise creates winners and losers after many decisions are made. A corollary of taking into account the needs of all stakeholders is that the leader helps people achieve a common goal.

Respecting individuals is a principle of ethical and moral leadership that incorporates other aspects of morality. If you tell the truth, you respect others well enough to be honest. Showing respect for the individual also means that you recognize that everybody has some inner worth and should be treated with courtesy and kindness.