Ethical leadership sets the tone for ethical behavior by modeling honesty, fairness, and transparency in actions and decisions. Since long, ethical leadership brings value to supply chain management. Therefore today, supply chain managers are well positioned to fix an ethical leadership vacuum developing across many industries.

The vacuum has its roots in post pandemic burnout, economic uncertainty and succession challenges. While the primary role of procurement and supply chain managers is to oversee logistical operations, they often exhibit the strategic qualities needed for successfully leading a complex organizations.

What is ethical leadership

Ethical leaders hold themselves and others accountable for upholding principled standards and values. They act as stewards, prioritizing the long-term sustainability and success of their organization. Leaders also consider the interests of others, including employees, customers, shareholders, and even the broader community, in their decision-making processes.

But how can ethical leadership bring value to the Supply Chain? Ethical leadership is essential in procurement and supply chain management for upholding supply chain resilience. It sets the tone for ethical behavior by modeling honesty, fairness, and transparency in their actions and decisions.

Value to the organization

While some supply chain managers may be comfortable with their traditional back bench role, others are increasingly filling the leadership vacuum and showing their ethical priorities in the process. Here are five of the many ways those ethical leaders bring value to the supply chain and their organisations.

1. Support employees

Ethical leaders prioritize open communication, fairness and transparency. They actively listen to their employees’ concerns, provide helpful feedback and ensure equal opportunities for growth to create a workplace where individuals feel valued and supported.

2. Build strong supplier relationships

Fairness, respect and responsibility lay the groundwork for trust-based collaborations within the supplier community. Upholding ethical standards sends a clear message to the extended supply base that integrity is non-negotiable. Mutual respect forms the basis for long-term partnerships, where both parties are committed to upholding ethical practices. 

3. Promote responsible sourcing and sustainability

Ethical leaders emphasize responsible sourcing practices, including the ethical treatment of workers throughout the supply chain, environmental stewardship and sustainable resource management. By prioritizing these considerations in procurement and supply chain decisions, ethical leaders contribute to positive social impact, environmental conservation and long-term sustainability. 

4. Mitigate downstream risks

Committing to responsible business practices serves as a proactive approach to mitigating risks associated with possible unethical practices within the multi-tiered supply chain. Leaders can identify and address weaknesses before they escalate into significant issues by prioritizing regular audits, compliance checks and due diligence processes to ensure that suppliers adhere to established ethical guidelines

5. Influence industry standards and practices

Ethical leadership also can influence industry-wide standards and practices through ethical practices within their supply chains. Leaders who prioritize ethical considerations often collaborate with industry associations, regulatory bodies and others to develop standardized guidelines and best practices to collectively raise the bar for ethical conduct and drive positive change.

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This post is based on a publication by SupplychainDive