How important are business ethics to being an effective leader? According to the American Management Association, it is an important characteristic of effective leaders today. In a survey of 462 executives who were asked, “What characteristics are needed to be an effective leader today?” 56% ranked ethical behavior as an important characteristic, followed by sound judgment (51%) and being adaptable/flexible (47%).

However, with all due respect to the AMA survey, I strongly believe it is much more than “important,” it is a “critical, essential and non-negotiable” characteristic of an effective leader. Strong business ethics is a pillar of my strategic planning and strategic thinking business coaching efforts each and every day. Clients are encouraged to develop a set of core values and guiding principles and publish them for their clients and stakeholders to know that this is the way they do business. And furthermore, the clients are continually reminded to make sure the core values are demonstrated in all that they do.

Examples of unethical behavior abound in business stories around the world. And individuals witness some form of unethical behavior in their workplace every day. Unethical behavior where people deliberately intend to harm themselves or others, develops from and is reinforced by, destructive states of mind, including fear, greed, anger and jealously. In contract, ethical behavior enhances the well-being of everyone because it ids developed from and reinforced by strong motives and emotions such as love, joy, generosity and compassion.

We need to ask these questions: “How ethically vulnerable is our company or organization?” “What are the core values and guiding principles of our company or organization?” “Are we committed to living and exhibiting our core values in everything we do?” The answers to these questions will define the state of ethics in our business.

Leadership in business must set the standard and “walk the talk” when it comes time to ethical behavior. There can be no compromise of ethics. There can be no “waiver of ethics.” A leader must constantly keep his or her actions above reproach. If leaders are committed to that high standard, there will be no more Enron, WorldCom, Tyco, and Adelphia ethical meltdowns.

Knowing what is right is very important to personal and business ethics. Doing what is right is absolutely critical to personal and business ethics. A strong unwavering commitment to your core values and guiding principles of your business or organization will lead to the right ethical decisions and actions. In the absence of these actions, all one has is good intentions and that simply is not enough for effective leadership.

J. Glenn Ebersole, Jr. is a multi-faceted professional, who is recognized as a visionary, guide and facilitator in the fields of business coaching, marketing, public relations, management, strategic planning and engineering. Glenn is the Founder and Chief Executive of two Lancaster, PA based consulting practices: The Renaissance Group, a creative marketing, public relations, strategic planning and business development consulting firm and J. G. Ebersole Associates, an independent professional engineering, marketing, and management consulting firm. He is a Certified Facilitator and serves as a business coach and a strategic planning facilitator and consultant to a diverse list of clients. Glenn Is also the author of a monthly newsletter, “Glenn’s Guiding Lines – Thoughts From Your Strategic Thinking Business Coach” and has published more than 225 articles on business.