Develop your Ethical Intelligence

Ethical Intelligence

A Guide for Business Managers and Leaders:

Do you know any business leaders who clearly display ‘moral leadership’? According to The HOW Institute’s 2020 Survey Report on ‘The State  of Moral Leadership in Business’ Moral leadership is in high demand, but very short supply. We also learn from the report that moral leadership (and ethical decision making) increase business performance.

In our troubled and challenging business environments, it is evident that moral leadership and ethical decision making  are vital qualities of leadership. Being aware of the needs of people around you and knowing what is right, must be accompanied by the courage and knowledge of how to do ‘what is right’.

Ethical intelligence refers to the ability to recognize ethical issues, make principled decisions, and act in ways that are consistent with ethical beliefs. Ethical intelligence may be the most practical form of intelligence there is — and possibly, the most valuable skill set you need to develop.

Ethical Intelligence involves a deep understanding of moral principles and the ability to apply them in complex and often ambiguous situations.

Developing ethical intelligence requires both theoretical understanding and practical application. This article explores some of the theory and research behind ethical intelligence, and provides practical guidance for managers seeking to enhance their ethical decision-making skills.

Understanding Ethical Intelligence

Ethical intelligence can be understood through several theoretical frameworks and research studies that emphasize moral development, ethical decision-making, and leadership integrity.

Theoretical Frameworks

There is a wide base of theory and research which informs ethical and moral leadership, including:

  • Kohlberg’s Stages of Moral Development: Lawrence Kohlberg’s theory outlines how individuals progress through different stages of moral reasoning, from basic obedience to advanced principles of justice and rights. Leaders with higher stages of moral development are more likely to make ethical decisions.
  • Rest’s Four-Component Model: James Rest’s model suggests that ethical action is the result of four psychological processes: moral sensitivity (recognizing an ethical issue), moral judgment (deciding the right course of action), moral motivation (prioritizing ethical values over other values), and moral character (having the courage to act ethically).
  • Virtue Ethics: This approach emphasizes the importance of developing moral virtues such as honesty, courage, empathy, and fairness. Virtue ethics focuses on the character of the decision-maker rather than on specific actions.

Research Insights

Research in the field of business ethics provides valuable insights into how leaders can develop their ethical intelligence:

  • Ethical Climate and Culture: Studies indicate that a positive ethical climate and organizational culture significantly influence ethical behavior. Leaders play a crucial role in shaping this climate through their actions and decisions.
  • Role Models and Mentorship: Research also highlights the importance of role models and mentors in developing ethical intelligence. Leaders who exhibit ethical behavior inspire others to follow suit.
  • Ethical Decision-Making Models: Various models, such as the PLUS model (Policies, Legal, Universal, and Self), provide structured approaches to ethical decision-making, helping leaders systematically evaluate ethical dilemmas.

Learn more about using the PLUS model here: USING THE PLUS MODEL

Practical Steps to Develop your Ethical Intelligence

Here are some steps you can take to develop your personal ‘Ethical Intelligence’:

1.     Reflect on your Personal Values and Principles

To do this, you can:

  • Conduct Self-reflection: this is the starting point for developing ethical intelligence. Leaders must understand their core values and principles, which serve as the foundation for ethical decision-making.
  • Identify your Core Values: Take the time to identify and articulate your core values. Reflect on your past experiences to understand what values have guided your decisions (and include any poor decisions you made).
  • Conduct Moral Reflection: Regularly engage in moral reflection to consider how your values align with your actions. Journaling can be a helpful tool for this practice.

2. Enhance your Ethical Awareness

Ethical awareness involves recognizing ethical issues in various situations. This skill can be developed through education and practice, such as:

  • Ethics Training: Participate in ethics training programs that provide knowledge about ethical theories, principles, and frameworks.
  • Scenario Analysis: Practice analyzing real-world scenarios to identify ethical issues and potential solutions. This can be done individually or in group settings.

3. Develop Ethical Decision-Making Skills

Applying ethical principles in decision-making requires structured approaches and frameworks. You can, for example:

  • Use Ethical Decision-Making Models: Adopt models like the PLUS model to evaluate ethical dilemmas systematically. These models guide you through considering policies, legal implications, universal principles, and personal values.
  • Seek Diverse Perspectives: Engage with colleagues and mentors to gain diverse perspectives on ethical issues. This helps in understanding the broader impact of decisions.

4. Build your Moral Courage

Moral courage is the ability to act ethically even when faced with adversity or opposition. This can be a touch challenge for many leaders. Here are some suggestions:

  • Small Acts of Courage: Start by practicing small acts of ethical behavior, such as speaking up in meetings or addressing minor ethical concerns. Gradually build up to more significant challenges.
  • Support Networks: Build a support network of like-minded individuals who can provide encouragement and advice when facing ethical dilemmas.

5. Lead by Example

Leaders set the tone for ethical behavior within their organizations. Leading by example is a powerful way to influence others. To do this:

  • Promote Transparency: Be transparent in your decision-making processes. Share the reasoning behind your decisions with your team.
  • Acknowledge your mistakes: Demonstrate honesty with your people, by taking responsibility for your mistakes.
  • Display Consistency: Consistently apply ethical principles in all situations, whether big or small. This builds trust and reinforces the importance of ethics.

6. Foster an Ethical Culture

Creating an ethical organizational culture requires ongoing effort and commitment. This can be achieved through:

  • Introducing Ethical Policies: Develop and enforce clear ethical policies and codes of conduct. Ensure that all employees are aware of these policies.
  • Promoting Ethical Leadership: Promote ethical leadership at all levels of the organization. Encourage your leaders to model ethical behavior and recognize those who do so.
  • Practising Open Communication: Create an environment where employees feel safe to speak up about ethical concerns. Implement anonymous reporting mechanisms and protect whistle-blowers from retaliation.


7. Continuous Learning and Improvement

Ethical intelligence is not a static trait but a continuously evolving skill. So,….

  • Stay Informed: Keep abreast of the latest developments in business ethics through reading, attending seminars, and participating in professional organizations.
  • Reflect and Adapt: Regularly reflect on your ethical decisions and learn from both successes and failures. Adapt your approach as necessary to improve your ethical intelligence.

Practical Applications and Examples

Here are  some practical examples of what you can apply in your workplace:

  1. Case Study Analysis: Regularly analyze case studies of ethical dilemmas in business to practice applying ethical principles. For example, study cases like the Enron scandal or the Volkswagen emissions scandal to understand the consequences of unethical behavior and how ethical intelligence could have altered the outcomes. VIEW This article for examples.
  2. Mentorship Programs: Establish or participate in mentorship programs that focus on ethical leadership. Mentors can provide guidance and support in navigating complex ethical issues. VIEW our course on Mentoring Skills
  3. Ethical Audits: Conduct regular ethical audits within your organization to identify areas of improvement. This involves evaluating practices, policies, and employee behavior against established ethical standards.
  4. Employee Training: Implement ongoing ethics training programs for all employees, not just leaders. This ensures that everyone in the organization understands and commits to ethical behavior.
  5. Ethical Decision-Making Committees: Form committees to oversee and guide ethical decision-making within the organization. These committees can provide diverse perspectives and ensure that decisions align with the organization’s ethical standards.


Developing personal ethical intelligence is an essential journey for leaders who aspire to create ethical, trustworthy, and successful organizations. By understanding the theoretical frameworks, engaging in self-reflection, enhancing ethical awareness, and applying structured decision-making processes, leaders can cultivate their ethical intelligence. Leading by example, fostering an ethical culture, and committing to continuous learning are crucial steps in this journey. As leaders develop their ethical intelligence, they not only enhance their decision-making capabilities but also inspire others to uphold the highest standards of ethical behavior, creating a positive and principled organizational culture.

In the next article, we will explore what you can to do introduce and promote Ethical Intelligence with your own organization


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