15 Ethical Principles in Business (With Definitions)

Updated March 10, 2023

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Ethical behavior is a crucial component of a business's success and employee trust. Organizations rely on leaders and employees to make the right choices at work, even when it may be difficult. Learning some common standards that executives and employees may have can help you understand why these are important.In this article, we discuss what ethical principles in business are and share a list of ethical business practices companies commonly follow.

What are ethical principles in business?

Ethical principles in business are the moral standards set by a company as a whole and individual employees within an organization. These principles take into account values, standards, regulations and common industry rules that dictate how people behave in the workplace and how a business operates in the community.Consumers are increasingly aware of how businesses run. Organizations with a solid moral foundation develop trust and gain credibility with clients and employees. A strong reputation builds a loyal customer base. Achieving success legally and ethically is a more sustainable, stable approach to long-term success.Related: Professional Code of Ethics: Definition and Examples

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15 ethical principles in business

Here is a list of 15 basic ethical principles in business you can apply in the workplace:

1. Honesty

Honesty requires a commitment to telling the truth, regardless of the consequences. It encourages trust among colleagues and between a business and the public. Everyone in an organization benefits from honesty. Employees want to work for honest leaders, business owners want honest employees and clients want to do business with honest partners. This means sharing favorable and unfavorable news with the same candor and directness, leading to a reputation of reliability.

2. Integrity

Having integrity means adhering to a set of moral standards at all times, even if no one is aware of your choices. Others notice when you live and work with integrity, which leads to respect and confidence in your decisions. This applies to people who work with others and those who work alone, as strong integrity can influence your honesty and obedience to rules and regulations.Read more: Valuable Examples of Integrity at Work

3. Loyalty

Loyalty means remaining faithful to business partners, coworkers and clients to demonstrate your commitment. You can develop lasting partnerships and a firm foundation for future success when you prove your alliance and honor these agreements. This can extend to maintaining relationships with suppliers, sharing a promotion opportunity with coworkers in your department or honoring financial commitments to the community.

4. Creation of ethical practices

Companies must do more than hope for their organization to operate ethically. Leaders might develop a defined code of ethics for their business practices and share this with all employees. Consider using a consulting firm to help craft a thorough and specific set of ethical practices. Explaining exactly what a company expects of employees reduces stress and confusion, creating clear expectations and a shared mission for everyone.

5. Implementation of ethical practices

Beyond writing a code of ethics, companies must include protocols to implement and enforce these policies. Consider regular training on the company's practices incorporating scenarios that team members can discuss and work through. You can also create a recognition program and incentives for those with high ethical standards.

6. Compliance

The most basic level of ethical business practices means complying with any laws related to your business. From international trading regulations, state tax codes and local building ordinances, companies must ensure all practices adhere to these guidelines. Often, legal regulations can serve as the beginning framework for an organization's code of ethics. By starting at the macro level, companies can use these industry regulations as an outline to devise more specific policies and procedures.Related: What Is a Chief Legal Officer? Definition, Duties and Steps To Become One

7. Fairness

Being fair in the workplace involves treating everyone equally, from assistants and interns to the CEO. Fairness also means avoiding preferential treatment and encouraging everyone to share their thoughts and ideas. A fair workplace promotes inclusion and equity in-house as well as for clients and customers. Fairness in the workplace creates a unified environment where employees feel comfortable, which increases engagement.Fairness might encompass the following areas:

Hiring new employees
Promoting team members
Delegating tasks
Reviewing performance

8. Respect

Treating others with respect is a core principle in business ethics. Each team member deserves a voice and the ability to share opinions and ideas in a supportive environment. Workplaces that promote individual respect can experience enhanced collaboration and teamwork among employees.Showing respect includes:

Listening to clients and coworkers with an open mind
Showing kindness and courtesy
Remaining polite even during disagreements
Refraining from personal attacks
Monitoring your nonverbal communication, including body language and facial expressions

9. Trustworthiness

Trustworthy workers keep their word to customers, colleagues and business partners. Honoring commitments proves that others can count on you, making you a trusted employee and coworker. Trustworthiness also involves being dependable and meeting your obligations.You can demonstrate trustworthiness at work by:

Arriving on time
Meeting deadlines
Showing up to scheduled meetings
Establishing consistency in words and actions

10. Responsibility

Being responsible in the workplace means taking ownership of your tasks. Responsibility includes thinking about how your actions can affect those around you and making choices that consider other people. Employers and employees depend on responsible workers to make the best decisions without requiring constant supervision. Being responsible demonstrates maturity, capability and discipline.

11. Accountability

Accountability is important for employees to be held to a company's ethical standards. If most team members support a business's ethical code, they will expect others to behave the same way. This creates a culture of high moral expectations that encourages all team members to act ethically in areas such as:

Managing time
Using company resources
Producing an appropriate quantity and quality of work

A business can also increase accountability by the public for its actions. With numerous ways to connect with companies, including email, and social media, consumers can easily communicate their support or opposition to a company's actions. This accountability encourages businesses to act efficiently and ethically.

12. Compassion

People who display compassion genuinely care about the well-being of others. In business, compassion can mean that organizations increase involvement in charitable causes and interpersonal interactions between colleagues. It involves taking the time to understand the thoughts and feelings of another person.People often want to work in an environment where they feel valued and cared for and do business with companies that display compassion towards consumers and the community. Consider these examples of compassion in the workplace:

A restaurant holds a fundraiser for a local child in the hospital
A group of employees organizes a meal delivery schedule for a coworker who has lost a loved one
Company leaders schedule a day off for workers after a particularly busy season

13. Social consciousness

As the world becomes increasingly connected, social issues receive more and more attention. Consumers look for businesses that use their platform to bring awareness to and support change on social issues. Socially conscious business practices include:

Following fair trade practices
Working with business partners and suppliers that source ethically grown products
Paying fair wages

Customers might prefer to do business with companies that take these extra steps to impact society positively.

14. Environmental consciousness

The global climate crisis remains a focus for business owners, employees and clients. Ethical business practices include making choices to limit or reduce your negative impact on the environment, such as:

Reducing carbon emissions from transportation and factories
Limiting trash and waste production
Encouraging energy-saving practices
Creating more sustainable, cost-saving strategies

15. Transparency

Creating transparency in the workplace is one way to promote ethical operations. Some companies may offer financial transparency to investors or employees to show how the company runs. Transparency can also refer to organizational structure, criteria for hiring and firing and addressing mistakes when they occur. For example, if a business must raise prices, it can communicate the reasons directly and honestly to consumers. This openness is another way to develop trust among employees and customers.

Executive managers