This paper defines ethical leadership by integrating emotional intelligence (EI) and transformational leadership theory, drawing on Aristotle's Nicomachean Ethics as a philosophical foundation. It identifies four key attributes of exceptional ethical leaders: individualized consideration, intellectual stimulation, inspirational motivation, and idealized influence. The paper then applies these criteria to Jeff Immelt, former CEO of General Electric, examining how his implementation of CSR programs, ethics scorecards, Six Sigma quality management, and leadership development pipelines exemplify each attribute in practice. The analysis argues that ethical leadership is not merely a compliance function but a strategic driver of long-term organizational trust, credibility, and transformation.
The nature of leadership is multifaceted and often requires the continual mastery of new skills, insights, intelligence, and perspectives to remain effective over the long term. Such is the nature of ethical leadership, which requires a steadfast focus on a core set of ethical principles and values that guide a leader's judgment, ensuring consistency over time. These are also the fundamental aspects of any leader's long-term credibility, as well as their ability to transform their enterprises (John, 2005). Ethical leaders resonate with credibility and the willingness to change quickly in response to the needs of their organizations, employees, stakeholders, and customers.
The purpose of this analysis is to define what an ethical leader is, how managers can progress toward a more ethical leadership style, and how Jeff Immelt, CEO of General Electric, exemplifies what ethical leadership can accomplish within a very large multinational corporation. It has often been said that a leader is who one is and a manager is what one does (John, 2005). This is especially true when defining ethical leadership and its supporting concepts, including emotional intelligence (EI) and transformational leadership. Both of these ancillary components of ethical leadership ensure that the strategies designed and steps taken by leaders remain consistent over time and bring lasting change to organizations. Only by defining ethical leadership along these dimensions can its long-term value be fully realized within an enterprise. The integration of Aristotle's Nicomachean Ethics is also supported by the incorporation of EI and transformational leadership.
The foundational aspects of ethical leadership include a continual willingness to be accountable and transparent about every decision undertaken, in addition to providing clear evidence of values-driven decision-making. All of these attributes are critically important in transformational leadership skill sets as well. The definition of ethical leadership must therefore include the foundational elements of transformational leadership, as these latter concepts are what galvanize the many aspects of ethical leadership into place (John, 2005). Ethical leadership must combine EI and transformational leadership skills so that a leader can evoke change in an organization and make that change permanent (Mendonca, 2001). EI is important for ethical awareness; this core set of leadership skills enables a leader to correctly interpret complex, often abstract ethical dilemmas throughout an organization and arrive at acceptable solutions.
When the factors of EI and transformational leadership are understood as the foundation of ethical leadership, the following attributes emerge as the most important.
First, an exceptional ethical leader has the ability to provide individualized consideration and consultation to subordinates, tailoring messaging and support to their specific needs and concerns. This attribute makes the ethical leader more of an ethics coach than a supervisor or manager in a purely authoritarian role. The ethical leader seeks to create optimal conditions for each subordinate to attain not only their work objectives but also their professional career aspirations — all within ethical boundaries (Gonzalez & Guillen, 2002). An excellent ethical leader works to create a culture that allows for individual initiative while ensuring every employee has a very clear sense of ethical boundaries and understands how those boundaries enable professional growth (Sonnenfeld, 2004). Great ethical leaders do not see ethics compliance as a necessary burden; they see it as a means to propel both employees and entire organizations more effectively toward their goals and objectives (Mendonca, 2001). When compliance is used as a measure of overall achievement, ethics and transparency become the most important values in a corporate culture (Gonzalez & Guillen, 2002).
This mindset — treating compliance and transparency as catalysts for achievement — is also consistent with Aristotle's Nicomachean Ethics, in that both a leader and their entire team continually strive to attain fulfillment through the accomplishment of challenging goals or the overcoming of major problems (Heinze, 2010). The most effective ethical leaders recognize that the greatest challenges lead to the greatest victories, and this applies readily to the ethical challenges that often remain invisible outside an enterprise. The role of the ethical leader is to ensure that, through individualized consideration, employees have the appropriate frameworks and support to make the right ethical decisions even when managers and supervisors are not present. This is the acid test of an effective ethical leader using transformational skill sets to propel an organization toward its goals. Individualized consideration is also demonstrated in how effectively a leader provides autonomy, mastery, and purpose to employees in their pursuit of more challenging and complex work. Research has shown that the greater the level of abstraction and uncertainty in specific tasks — especially those involving stakeholders outside the business — the greater the potential for unethical decisions to be made (Mendonca, 2001). A reliable sign of ethical leadership is that when employees face such situations, they choose to abide by the concepts and frameworks instilled by their ethical, often transformational leaders (Gonzalez & Guillen, 2002).
A second aspect of the hybrid nature of ethical and transformational leadership is the ability to provide intellectual stimulation in specific roles while also setting clear boundaries of ethical conduct in their pursuit. This aspect of ethical leadership encourages subordinates to openly question the direction, logic, and even the ethical validity of decisions in an atmosphere of open dialogue and trust (Gonzalez & Guillen, 2002). Intellectual stimulation fosters trust while also teaching ethical decision-making and a focus on results achieved through shared insight and collaboration. This second attribute also concentrates on creating a culture of continual intellectual growth at both a personal and professional level (John, 2005). It is essential for building an organization that continually strives to learn and remain at the forefront of new technologies. The ethical dimension of this attribute pertains to how an organization chooses to use those technologies in the attainment of its goals and in serving its customers. The continual ascent of technology as a means to gain competitive advantage opens up a range of opportunities for ethical abuse — including the monitoring of competitive and customer activity. Intellectual stimulation guided by ethical leadership and framed within a transformational context to support and strengthen customers is an exceptionally powerful competitive advantage in global business, as Jeff Immelt of General Electric has demonstrated throughout his tenure as CEO.
The third attribute of an excellent ethical leader is the ability to influence outcomes within their own organization, throughout the broader enterprise, and across the industry. This attribute is also exemplified in a leader's demonstration of high values-awareness, high values-accountability, values-driven decision-making, and policies that are aligned with the broader enterprise (Gonzalez & Guillen, 2002). These qualities of inspirational motivation are essential for making transparency a foundational element of any leadership style (Mendonca, 2001). Encouraging initiative is also a central part of this attribute. Inspirational motivation, then, is more than simply leading by example; it is the continual evolution of a leader from a short-term to a long-term orientation, while balancing the many needs of an enterprise against an ethical set of checks and balances to ensure steady progress on both commercial and ethical dimensions (Mendonca, 2001). Among the best leaders of the twentieth and twenty-first centuries, this attribute proved the most difficult to align with a specific individual, given its comprehensive nature in reconciling two potentially divergent demands: ethical alignment and the need for employees to make significant progress on challenging goals and objectives.
"Idealized influence and Aristotelian ethics in leadership practice"
"Immelt's CSR programs and ethics scorecards at GE analyzed"
Ethical leadership is the most powerful attribute any corporation can cultivate within its senior management team. True to Aristotle's Nicomachean Ethics, the pursuit of its core ideals delivers consistent value to customers over the long term. Ethics will become the most potent corporate asset in the coming years as economic pressures force companies to cut corners in this area, inevitably inviting the fatal blow of lost trust. Winning and keeping that trust will be worth more than billions in revenue over time, as ethical performance becomes the defining waterline between successful, growing companies and those that fail, are acquired, or fade into obscurity.
You’re 64% through this paper. Sign up to read the remaining 2 sections.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.