Article 7 - Ethical Leadership & HR’s Strategic Role: Building Trust, Performance and Sustainable Value
Ethical leadership in Human Resources is building organisational culture based on trust and values. Ethical HR leaders serve as role models for organisations to demonstrate how to manage teams with integrity, equity, and respect in manners that uphold legal and moral responsibilities. If there is good ethical leadership, leaders have the power to influence the behaviours of an organisation through ethical decision-making. This creates a sustainable workplace where employees feel valued and respected (Aurora Training Advantage, 2024). In such ethical leadership will strengthen employee trust and engagement, a good reputation, and long-term organisational success will be achieved.
The Importance of Ethical Leadership & HR’s Strategic Role
Ethical leadership can impact the view of fairness and justice among employees. It enhances reputational outcomes, reduces risks, and enhances decision quality. HR has an important role in operationalising ethics by embedding values into the processes of recruitment, training, performance management, and rewards. Research shows that HR systems align with ethical leadership principles, commitment and job satisfaction among employees are high (Guo, 2022). This highlights that good strategic ethical leadership is not just about managing processes—it’s about leading the way in building an ethical and sustainable workplace culture.
Principles
In ethical leadership, there are a few principles (“Core Principles of Ethical Leadership”, 2025).
1. Integrity: Shows honesty, practices transparency, adds strong moral and ethical standards.
2. Fairness: Treat all equally, make fair decisions, and give equal opportunities to all.
3. Accountability: Take responsibility for actions and decisions for success or failure.
4. Transparency: Sharing information and decisions. This will help to build trust. Communicate updates to employees even in good or difficult times.
5. Respect: value others' ideas and contributions, and well-being. listen actively to employees' ideas, acknowledging their efforts.
6. Empathy: Understand others' emotions and address them. Support employees with personal challenges with flexibility.
International Perspectives and Examples
Internationally, Ethics in leadership are becoming an important part of corporate governance in many organisations. Research across the world shows ethical leadership direct better reputation and employee outcomes in the organisation. For example, companies like Unilever and Patagonia also link leadership performance with ethical KPIs and sustainability goals (Unilever, 2022; Patagonia, 2019). Ethical leadership has improved employee engagement and organisational reputation in many sectors (Zahari, 2024). In countries like the UK and Australia HR functions are promoted at the core of corporate ethics frameworks. This reflects the increasing recognition that HR serves as a strategic partner in corporate governance and accountability.
Sri Lankan Context and Examples
Sri Lanka has several good examples to show where ethical leadership and HR practices come together to strengthen corporate reputation. Companies like Dilmah and MAS Holdings are examples of how ethical leadership, linked with strategic HR leadership, enhances the brand reputation and well-being of its employees. For instance, Dilmah has integrated the HR-driven sustainability practices in the governance model (Dilmah, 2025). Also, MAS Holdings has taken similar focuses on ethical supply chains and gender equity (MAS Holdings, 2024). At John Keells Holdings incorporated ethics and social responsibility into the development programs for HR leaders (John Keells Holdings, 2023). These examples show that ethical leadership, enabled by strategic HR, enhances competitiveness and public trust in Sri Lankan enterprises.
Challenges
The practice of ethical leadership is hence not easy. Many challenges remain the same. Most organisations still base their decisions on short-term benefits rather than ethical ones. The limited influence of HR, weak enforcement of policies on ethics, and top-down decision-making could come in the way of progress. Further, ethical posturing occurs when companies speak about ethics publicly but fail to put those values into practice, which not still a concern globally (SAJHRM, 2024). These challenges can only be addressed through genuine leadership commitment, HR strategy, and transparent evaluation metrics tied to ethical outcomes.
Conclusion
Ethical leadership and the strategic role of HR are the inseparable pillars of modern organisational success. While it is the leader's role to inspire ethical behaviour, it is HR's job to build the frameworks to keep it. Embedding ethics in HR strategy connects to Ethical Decision-Making Theory (Rest, 1986). This theory shows that ethical choices come from consistent moral judgment and values built into organisational systems. It also aligns with Social Learning Theory (Bandura, 1977). This theory explains that employees often copy and adopt the ethical behaviours they see from leaders. These behaviours become stronger when HR structures support them. Embedding ethics in the HR strategy is a moral duty for any organisation, whether Sri Lankan or global, but also a business imperative that will drive long-term trust, resilience, and sustainable value.
References
Aurora Training Advantage, 2024. The Importance of Ethical Leadership in HR. Available at: https://auroratrainingadvantage.com/articles/the-importance-of-ethical-leadership-in-hr/#:~:text=Ethical%20leadership%20in%20Human%20Resources%20(HR)%20is%20crucial
Core Principles of Ethical Leadership. 2025. Guide to Ethical Leadership in Management & Strategy. Available at: https://www.bmc.net/blog/management-and-leadership-articles/ethical-leadership
Azhar, Z., 2025. The Role of Ethical Leadership in HRM-driven Corporate Governance. SSRN. Available at: https://papers.ssrn.com/sol3/Delivery.cfm/5184673.pdf?abstractid=5184673
Guo, K., 2022. The Relationship Between Ethical Leadership and... International Journal of Environmental Research and Public Health. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9158423/
Zahari, A.I., 2024. Ethical culture and leadership for sustainability. Journal/ScienceDirect. Available at: https://www.sciencedirect.com/science/article/pii/S2199853124000131
Unilever, 2022. Unilever named corporate sustainability leader for 11th year. Available at: https://www.unilever.pk/news/2022/were-named-corporate-sustainability-leader-for-11th-consecutive-year/
Patagonia, 2019. Unilever, Patagonia, and IKEA Are the Most Recognised Leaders: 2019 Leaders Survey Results. Available at: https://www.sustainability.com/about/news/unilever-patagonia-and-ikea-are-the-most-recognized-leaders-2019-leaders-survey-results/
Bridging the gap: Ethical leadership, human resource practices and organisational justice”, 2024. SA Journal of Human Resource Management. Available at: https://sajhrm.co.za/index.php/sajhrm/article/view/2697/4198
Dilmah Ceylon Tea Company PLC, 2024. Integrated & Sustainability Report 2023/24. Available at: https://www.dilmahtea.com/wp-content/uploads/2025/05/sustainability-report-2023-24.pdf
John Keells Holdings PLC, 2025. Environmental, Social & Governance | CSR. Available at: https://www.keells.com/esg/
MAS Holdings, 2024. Plan for Change | Impact Report 2024. [pdf] Available at: https://masholdings.com/wp-content/uploads/2025/06/impact-report-2024.pdf
SA Journal of Human Resource Management, 2024. Bridging the Gap: Ethical Leadership, HR Practices and Organisational Justice. Available at: https://sajhrm.co.za/index.php/sajhrm/article/view/2697/4198
Securities & Exchange Commission (Sri Lanka), 2013. Code of Best Practice on Corporate Governance 2013. Available at: https://www.sec.gov.lk/asset/pdf/code%20of%20best%20practice%20-%202013.pdf
Rest, J.R. (1986) Moral development: Advances in research and theory. New York: Praeger. Available at: https://doi.org/10.4324/978020378209
Bandura, A. (1977) Social learning theory. Englewood Cliffs: Prentice Hall. Available at: https://doi.org/10.4324/978020379684
This is a compelling exploration of ethical leadership's critical role in modern HR strategy. Your integration of core principles integrity, fairness, accountability, transparency, respect, and empathy provides a solid foundation. The Sri Lankan examples from Dilmah, MAS Holdings, and John Keells effectively demonstrate practical application alongside international benchmarks like Unilever and Patagonia. Addressing challenges like ethical posturing adds important realism to this thoughtful analysis.
ReplyDeleteLivan, thank you for your comment. I am glad you noticed the core ethical leadership principles, like integrity, fairness, and empathy, in the discussion. This highlights that good strategic ethical leadership is not just about managing processes, it’s about leading the way in building an ethical and sustainable workplace culture. I appreciate you highlighting how the Sri Lankan and global examples are relevant to this discussion. Embedding ethics in the HR strategy is a moral duty for any organization-whether Sri Lankan or global. I completely agree that highlighting the challenges, like dealing with ethical posturing, makes the whole analysis more realistic. These challenges can only be addressed through genuine leadership commitment. Your feedback reinforces the importance of promoting genuine ethical behaviour across diverse organisations.
DeleteBecause it so clearly highlights the human side of HR and leadership, this article truly speaks to me. I adore how it demonstrates that moral leadership is about daily deeds that foster respect, trust, and equity in the workplace rather than just rules or policies. The emphasis on honesty, openness, compassion, and responsibility seems very realistic and relatable. I also value the practical examples from international and Sri Lankan businesses that demonstrate how ethics can be effectively ingrained in a culture. It serves as a potent reminder that organizations and employees flourish when HR and leaders collaborate morally.
ReplyDeleteDanushka, thank you for your supportive comment. I appreciate your recognition of the focus on the human side of HR and leadership. This shows how ethical behaviour truly shapes workplace culture. Your point about moral leadership is demonstrated through everyday actions such as honesty, openness, compassion, and accountability. This highlights why ethics must go beyond compliance. I am also glad that the international and Sri Lankan examples helped show how these values can be embedded in practice. Your reflection reinforces the idea that when HR and leaders act ethically together, both employees and organisations are able to grow and succeed.
DeleteThe importance of moral HR leadership in creating a positive company culture is well-highlighted in this article. I appreciate the focus on values like honesty, equity, and compassion as well as how these are used in real-world situations in Sri Lanka and around the world. It is a crucial reminder that establishing trust, increasing employee engagement, and guaranteeing the long-term viability of an organization all depend on ethical leadership.
ReplyDeleteChanika, I appreciate your comment. I am glad that you recognised the focus on how moral HR leadership shapes a positive and healthy organisational culture. Highlighting values such as honesty, equity, and compassion is important. These qualities support leaders in making fair and people-centred decisions. I am glad that the examples from Sri Lanka and international organisations helped to demonstrate how ethical leadership can be applied in practice. Your point about the link between ethics, trust, employee engagement, and long-term organisational success is especially valuable. It reinforces the idea that ethical leadership is not optional but essential for sustainable workplaces.
DeleteGreat post! I really like how you linked ethical leadership with HR’s strategic role—it shows how values can truly shape workplace culture. The Sri Lankan examples like Dilmah and MAS Holdings make it very relatable. I also appreciate how you pointed out challenges like short-term thinking and ethical posturing. Really thoughtful and well-balanced discussion!
ReplyDeleteCharith, thank you for the comment. I appreciate your acknowledgement of how ethical leadership supports HR’s strategic role to make a strong workplace culture. Ethical leadership can impact the view of fairness and justice among employees. I am glad the Sri Lankan examples, such as Dilmah and MAS Holdings supporting the discussion. These examples prove that when Sri Lankan companies prioritise ethical leadership with support from HR, they not only become more competitive but also earn a stronger reputation and public trust. Your point about challenges like short-term thinking and ethical posturing is also very important and adds more value to the discussion.
DeleteThis is an excellent explanation on how the ethical leadership and smart HR practices work together to build trust, improve organization's culture and supporting for long term sustainability. This shows that when leaders act ethically, employees feel respected and treated fairly, and HR plays a key role by adding ethical practices for resourcing, training, evaluations and rewards.
ReplyDeleteSaliya, thank you for your comment. I appreciate your recognition of how ethical leadership and HR practices work together to build trust and strengthen organisational culture. Your point about employees feeling respected when leaders act ethically is important. I agree that HR plays a key role in supporting values in the processes of recruitment, training, performance management, and rewards. Good ethical leadership isn't just about following rules or process. It’s about leading and building an ethical and sustainable workplace culture.
DeleteThis was such an insightful read. I do really like how you showed that ethical leadership isn’t just about “doing the right thing,” but about shaping everyday culture through HR systems, fairness, and transparency. But do you think do you think companies here are ready to move beyond symbolic ethics and actually embed these principles into their leadership frameworks?
ReplyDeleteHowever the examples from Dilmah, MAS, and John Keells made the message feel very real and grounded in our own context. Your point about HR being the bridge between ethics and business strategy really stood out it’s something many organisations overlook.
Shashi, thank you, and I appreciate your comment. I agree that ethical leadership must be reflected in everyday practices, not just statements. In response to your question, I believe some Sri Lankan companies are beginning to move beyond symbolic ethics, especially those with strong governance and people-centred cultures. However, many organisations are still at an early stage and need clearer frameworks, leadership accountability, and HR-driven systems to fully embed these principles. You are correct that the examples from Dilmah, MAS, and John Keells show that meaningful progress is possible when you have a good strategic, ethical culture. HR truly plays a central role in making this shift sustainable.
DeleteThis essay offers a lucid and perceptive description of how HR strategy and ethical leadership collaborate to foster trust, fortify organizational culture, and provide long-term sustainable value. The conversation is made realistic, believable, and extremely relevant by the use of Sri Lankan and worldwide instances.
ReplyDeleteIndika, thank you for your kind words. I agree that combining HR strategy with ethical leadership strengthens trust, culture, and sustainability in the organisation. Your observation on using examples from Sri Lanka and globally helps make these concepts practical and relevant. This shows how ethical practices can be applied effectively across different organisational contexts. Good ethical leadership is not just about following rules or processes. It’s about leading and building an ethical and sustainable workplace culture.
DeleteThis an excellent article. You have discussed how ethical leadership and strategic HR work together to build a trustworthy, high-performing, and sustainable organizational culture. And also, you have discussed the importance of ethical leadership & HR’s strategic role and principles. Furthermore, you have discussed about global and Sri Lankan examples, it shows that ethical practices are not just ideals but practical drivers of reputation, employee engagement, and long-term success.
ReplyDeleteDilrangi, thank you for your comment. I'm glad you recognised how ethical leadership and strategic HR work together can build trust and a sustainable workplace culture. Making ethics central to HR strategy is simply the right thing to do for any organisation, whether in Sri Lanka or anywhere else. But it's also crucial for business success. When companies prioritise ethics, they create lasting trust with their employees.
DeleteThis article presents a critical and well-organized discussion of the fact that ethical leadership and the strategic role of HR collaborate with one another to establish trust, accountability, and sustainable organizational value. The main ethical leadership principles, as discussed by you, namely, integrity, fairness, accountability, transparency, respect, and empathy, make it obvious why ethical behavior should be incorporated into the processes in the HR. The presence of international examples such as Unilever and Patagonia, as well as powerful examples of Sri Lankan business such as Dilmah, MAS Holdings, and John Keells, is effective to show that ethical leadership is a means to improve reputation and the well-being of employees. I also like the realistic explanation of problems like poor enforcement and short-term decision making that you have presented. On the whole, this article is rather insightful, practical, and inspirational. Good job- your writing is a strong motivator towards ethical and human-based leadership in contemporary organizations.
ReplyDeleteDishan, thank you for the detailed feedback. I am glad you found how ethical leadership and strategic HR together build trust and long-term company value. You have identified the key principles, integrity, fairness, transparency, and empathy, which are really important in strategic HR and ethical leadership. I am also glad that the international and Sri Lankan examples helped to show how these values can be embedded in practice. Especially concerning reputation and how employees feel. Your point about challenges like short-term thinking and ethical posturing is also very important and adds more value to the discussion. Your comment shows that when HR and leaders work ethically together, both employees and organisations can perform. Thanks again for your encouraging words and thoughtful insights.
DeleteThis is a highly insightful article that effectively highlights the critical connection between ethical leadership and HR’s strategic role in fostering trust, engagement, and sustainable organizational value. I appreciate how you tied global perspectives to the Sri Lankan context, showcasing examples like Unilever, Patagonia, Dilmah, MAS Holdings, and John Keells Holdings to demonstrate practical applications. The emphasis on principles such as integrity, fairness, accountability, transparency, respect, and empathy provides a clear framework for ethical behavior in leadership. I also value how you addressed the challenges, including short-term decision-making, limited HR influence, and ethical posturing, which adds realism and depth. Overall, this article underscores that embedding ethics into HR strategy is not only a moral responsibility but a strategic necessity for long-term organizational success and public trust.
ReplyDeleteNadeesha, really helpful comment, thank you so much. You found the key connection between ethical leadership and smart HR, which builds trust, engagement, and long-term organisational value. I appreciate you highlighting how the Sri Lankan and global examples are relevant to this discussion. Embedding ethics in the HR strategy is a moral duty for any organisation, whether Sri Lankan or global. You are correct that principles such as integrity, fairness, accountability, transparency, respect, and empathy provide a strong foundation for ethical leadership. Highlighting challenges like short-term thinking and limited HR influence is essential. Real progress requires addressing these barriers. Thank you again for your insightful feedback.
DeleteYour write up presents a clear, well structured overview of ethical leadership in HR and effectively integrates international, Sri Lankan, and organizational perspectives. You highlight not only what ethical leadership is, but why it matters especially in shaping culture, trust, and long term sustainability.
ReplyDeleteA few particularly strong points:
• Holistic coverage: You bridge theory, principles, and real-world applications, showing how ethics moves from abstract values into concrete HR systems like recruitment, performance management, and rewards.
• Use of examples: Referencing organizations such as Unilever, Patagonia, Dilmah, and MAS Holdings strengthens your argument by showing how ethical leadership works in practice across different contexts.
• Critical reflection: Acknowledging challenges such as short-termism, weak policy enforcement, and ethical posturing adds depth and realism.
What could enhance the piece further is a slightly deeper link between HR’s strategic influence and how ethical leadership changes employee behavior for instance, how HR can embed ethical decision making into training or leadership pipelines. You could also briefly contrast the consequences of poor ethical leadership to highlight the importance even more strongly.
Luckmee, thank you for taking the time to share such a detailed comment. I really appreciate that you noticed how the article brings together ethical leadership and HR's strategic role, and how the international and Sri Lankan examples make the ideas more practical and relevant. Your suggestion about strengthening the connection between HR's strategic influence and employee behaviour really resonates with me. You are correct, when we connect ethics into training programs, leadership development, and the systems we use to make decisions, we create real and lasting improvements in workplace behaviour, not just basic rule-following. Discussing the consequences of poor ethical leadership is also a valuable suggestion. It would further emphasise why ethical practice is essential for culture, trust, and long-term organisational success.
DeleteI appreciate your thorough article. I concur that developing trust, engagement, and long-term organizational value requires ethical leadership and HR's strategic role (Blyton and Turnbull, 2004; Farnham, 2015). A solid basis for moral decision-making and employee relations is provided by the values of integrity, justice, accountability, transparency, respect, and empathy (Core Principles of Ethical Leadership, 2025; Guo, 2022). While Sri Lankan businesses like Dilmah and MAS Holdings show local applications improving reputation and employee well-being, global examples like Unilever and Patagonia demonstrate how ethical leadership aligns with sustainability and performance goals (Unilever, 2022; Patagonia, 2019). Short-term decision-making, limited HR influence, and ethical posturing are some of the ongoing challenges that underscore the need for sincere commitment integrated HR strategies to integrate ethics into organizational culture (SAJHRM, 2024; Zahari, 2024).
ReplyDeleteSahini, thank you for your thoughtful comment. I am glad that you have analysed well that ethical leadership and HR’s strategic role are essential for building trust, supporting engagement, and creating long-term value in any organisation. You are absolutely correct that core principles such as integrity, fairness, accountability, transparency, respect, and empathy provide a strong base for ethical behaviour in daily HR practices. The examples you noted from Sri Lanka and global companies clearly show how ethical leadership can improve both reputation and employee well-being. You noted that important point about challenges such as short-term thinking and ethical posturing, which remind us that real progress requires genuine commitment across all leadership levels.
DeleteYour article insightfully connects ethical leadership with HR’s strategic role in shaping trust and sustainability. The Sri Lankan examples enrich the discussion, showing how values translate into practice. A thoughtful and timely contribution to HR discourse!
ReplyDeleteDilrukshi, Thank you for your thoughtful comment. I am glad the link between ethical leadership and HR's strategic role came through clearly. I also appreciate you pointing out how the Sri Lankan examples help show how this actually works in practice.
DeleteThis is an excellent and well-rounded analysis of how ethical leadership and HR’s strategic role work together to shape culture, trust, and long-term organizational value. I especially appreciate how you connected global practices with Sri Lankan examples—making the discussion both practical and relevant. Your emphasis on principles like integrity, fairness, and accountability clearly shows why ethical leadership is no longer optional, but essential for sustainable performance. A thoughtful and impactful contribution to the ethics discourse.
ReplyDeleteMahesh, thank you so much for your thoughtful feedback. I am glad that the connection between ethical leadership and HR's strategic role was clear to you. I appreciate your observation on practices with Sri Lankan companies like Dilmah, MAS Holdings, and John Keells help demonstrate how these ethical principles actually work in real workplace settings. Your point that ethical leadership is no longer optional but important for trust, culture building, and long-term sustainability is well noted. I truly appreciate your encouraging words. Your comment is motivating, and I’m grateful for your meaningful engagement with the topic.
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