Courageous leadership in an age of uncertainty: Why business ethics matters more than ever

Today’s leaders are navigating an ethical minefield. The convergence of factors spanning political polarization, AI-driven disruption, climate change, inflation, and more make leadership a daunting proposition. At a time when taking a stance on anything seems risky, how can today’s business leaders set a vision, and then navigate change to achieve it? 

Being a leader in this environment demands transparency, accountability, and grit. It also takes community: The most effective leaders have people, resources, and tools to draw on during periods of volatility or change. Purpose can be one of the most powerful tools in a business leader’s toolkit, especially when that purpose is aligned with clear, ethics-driven values. Purpose clarifies what we’re striving for, values set the boundaries, and ethics ensures we act with integrity when the right path isn’t clear. The absence of any weakens the whole framework.

The case for ethical business

Research shows that companies with ethical cultures and practices outperform competitors financially: Ethisphere found that companies on the World’s Most Ethical Companies list outperformed a comparable index of companies by 7.8% over a five-year span. Consumers are also demanding ethical businesses: 84% consider a company’s ethics before making a purchase.

“When you look at the most trusted businesses—those that are using ethical leadership as a frame—their horizon of profits is greater,” said Brian Peckrill, head of the McGowan Charitable Fund. “Those businesses that think about their people, think about how they can invest in their people, and are not just focused on short-term profits through efficiencies, do better in the long term.” 

As chaotic as the world seems right now, businesses are in a good position to lead on ethics: Edelman’s 2025 Trust Barometer found business to once again be the most trusted institution globally, outpacing nonprofits, government, and the media. Further, business was the only institution to be seen as both competent and ethical. 

People already have a baseline level of trust in businesses, and it’s up to leaders to meet those expectations. Further, being an ethical business starts with leadership—in the words of Intel co-founder Robert Noyce, “If ethics are poor at the top, that behavior is copied down through the organization."

Putting ethics into practice 

At a time when society is so divided that even doing the “right thing” feels like a risk, how can business leaders put ethics first? 

Start with what ethics are not. Ethics can’t be reactionary, nor should ethics be malleable. Ethics should, however, equip leaders to react to changing circumstances and new information with confidence. 

Let’s explore a hypothetical example.

A food company known for its organic, fair trade kids snacks has a history of working with farmers and suppliers that support human rights. The company has a clear human rights policy and conducts periodic site visits to ensure worker fair treatment. This policy is mentioned on the company’s website, packaging, and in marketing: It’s a hallmark. Fairness and dignity are two of the company’s core values.

During a recent surprise site visit to one of the company’s biggest and longest-term suppliers, the auditing team identifies a few clear human rights violations. For one, a lack of affordable local labor has pressured the farmer into encouraging workers to bring their children to the fields. Now, there are children as young as 10 working in the fields—a clear and serious human rights violation.

As this is the company’s biggest supplier, the CEO has a difficult decision to make. Terminating this contract would leave the company without a reliable source for a core ingredient. Continuing the contract would mean that the company would be selling kids’ snacks produced by children working illegally. What would an ethical leader do?

This is one small example of the kinds of decisions that leaders can be faced with daily. The reality is that even the right decision may upset some stakeholders. 

Operating without a defined purpose or set of values makes it challenging to act ethically and even to identify the "right" course of action. Purpose provides leaders with a compass, guiding them toward the optimal path. Especially in unpredictable environments, ethical decisions are seldom clear-cut, often existing in a gray area. This underscores the critical need for business leaders to establish a clear ethical code to support their choices.

Back to our example.

Rather than brushing aside the child labor issue in order to continue sourcing a key ingredient, or terminating a contract (and risking a huge financial loss), the CEO might decide to deploy a team to help the farmer address the situation. This might involve a renegotiation on pricing to ensure the farmer can secure and pay legal workers, which will of course affect the food company’s bottom line—but not as much as sacrificing its values or losing a key ingredient.

Business leaders often find it daunting to communicate openly when challenging ethical issues arise. However, transparency is crucial. It is always better to be open about ethical topics rather than concealing them, which risks only partial information being revealed later. It’s far better to be open and control the narrative than to scramble to fill in the blanks—especially given that 52% of Americans say they’ve boycotted a company because of unethical business practices.

Principles for ethical leadership

By now, it should be clear that ethical leadership is the path forward. But that doesn’t mean it will be easy. By embracing the principles below, you and your team can embrace ethical leadership.

1. Define (and align) your values: Be explicitly clear about your organization’s values and how they come to life. Business leaders should also define their personal values and explore where they align with those of their organization. Why? Leaders are human beings, and ultimately act based on our own knowledge, experience, and yes—our gut feelings. It’s important to understand where you personally converge or diverge with your organization’s values, and how to navigate the differences.

2. Embrace 'inconvenient ethics': It’s easy to be ethical when it’s convenient. It’s not so easy when the ethical choice is inconvenient, triggering a cultural, financial, productivity, or reputational hit. The truth is that the “inconvenient” ethical situations will build far more trust and goodwill over the long run, even if there are short-term pains.

3. Strive for transparency: Similarly, hiding or withholding information rarely works out. Leaders should set an example by communicating transparently whenever possible, and encouraging other leaders, managers, and reports to do the same. Fostering a culture of transparency takes time and trust, but it results in an environment where problems are identified and solved more effectively and efficiently.

4. Talk it through: If this were easy, everyone would act ethically, all the time. Being an ethical business leader is challenging, which is why it’s so important to have colleagues, business networks, and resources to lean on. Importantly, business leaders should explore diverse perspectives when navigating ethical issues. Speaking to the same group of people, or individuals who are not directly impacted by an issue, means risking the wrong decision. Likewise, don’t rush ethical decisions. Take the time needed to fully understand the situation, its impacts, and potential outcomes.

5. Practice: Exercise your ethical “muscle.” Trialing various potential ethical scenarios on a regular basis can be an extremely valuable exercise. Not only does it help employees flex their ethical problem solving skills, but it helps them get comfortable with challenging discussions and decisions. Creating a decision-making tree or ethics framework can be especially helpful in practicing ethics-based problems.

Ultimately, a scenario like the one outlined above may seem like a crisis at first, but the ethical leader will see it as a challenge and opportunity for organizational growth and expression of values. Because in the end, ethical leadership isn’t about having all the answers—it’s about having the conviction to do what’s right, even when it’s hard. Luckily, leaders at purpose-driven companies have a vital resource to help guide decision making in their organization’s purpose. When a company lives its purpose, using it as a lens to make decisions and guide behaviors, ethics becomes second nature. 

As the world grows more complex, the true test of a leader will be their willingness to stand by their values, foster trust, and choose the ethical path, even in the face of uncertainty. Today, scrutiny is high and tolerance for hypocrisy is low—so the organizations that succeed will be those whose ethical decisions stem not from a fear of consequences, but a commitment to purpose. And by making ethics a daily practice and a core part of our decision-making, leaders not only build stronger organizations but contribute to a more just and trustworthy world.