When I worked at a SaaS company, one of my responsibilities was to create content — and there were dozens of articles that I created, which were also signed with my name. The articles featured plenty of first-person experiences.
After I left, a new person took over and replaced my name with theirs as the author. While this wasn’t illegal, was it ethical? That’s a subject for debate. From my perspective, unless a piece was ghostwritten, putting a new name simply because the original author left the company is not okay.
That’s just one example of a situation that could have been avoided by setting and following business ethics within the organization. Creating and documenting ethical practices can prevent more than “just” hard feelings. it can also protect your company from violating laws, treating your staff inequitably, and suffering from reputational damage.
→ Download Now: Free Business Plan Template
Table of Contents
- What are business ethics?
- Why are business ethics important?
- Principles of Business Ethics
- How to Build an Ethical Business
What are business ethics?
Business ethics are the guidelines a company establishes that help teams make moral decisions. At the highest level, you can think of them as a cheat sheet for what each company defines as a “good” and “bad” practice.
So, why do you need them?
In my opinion, the best answer comes from Harvard University, which argues that business ethics comes down to “different interpretations of what’s ethical.” When faced with the same situation (especially a “gray area”), different people will decide on a different approach — that is, unless they have business ethics to lean on.
Why are business ethics important?
Business ethics relate to all groups — your investors, customers, and employees alike. Here are a few reasons why it’s worth putting them in place.
To Avoid Legal Consequences
Let’s start with the obvious — businesses that act unethically might face legal action. Volkswagen, the German car manufacturer, is the perfect example of how not to act. Back in 2015, they caused a scandal later known as “Dieselgate.”
To cheat on emission tests, the brand installed illegal software in its diesel cars. It detected when the vehicle was undergoing testing and altered its performance to meet regulatory standards. In reality, it emitted up to 40 times the allowed levels of pollutants during regular use. Volkswagen deliberately deceived consumers who were unaware of how much environmental harm their cars were causing.
The company faced lawsuits and had to pay $30 billion globally in settlements and regulatory penalties. Not only did the business suffer financially, but it also damaged its brand reputation.
To Build Customer Trust
I think that companies should treat customers’ trust like Fabergé eggs. Trust is fragile. Sometimes, the damage is irreversible.
While I’m sure you’ll agree that Volkswagen landed on its four feet and few people remember the scandal from a decade ago, some brand names will forever be tarnished (think: Wells Fargo, a bank that had to pay $3 billion for illegal and unethical practices).
Business ethics, such as fair treatment and transparency, hold everyone in your organization accountable for their actions. They help ensure that all the information you share with your clients (whether on the service, product, or the company itself) are true. The more open and honest you are, the stronger their belief in what you do.
.webp)
Free Business Plan Template
The essential document for starting a business -- custom built for your needs.
- Outline your idea.
- Pitch to investors.
- Secure funding.
- Get to work!
Download Free
All fields are required.
To Improve Profit
As opposed to what many people think, it’s the ethical companies that make the most profit. People prefer to buy from brands that match their values, and they’re often willing to pay a premium price for ethical products or services.
Etisphere first launched the World’s Most Ethical Companies recognition program in 2006. Two decades later, brands like Pepsico, Aflac Incorporated, and Allianz were among the most ethical businesses in 2024. They also discovered that companies that prioritize business ethics outperformed their competitors by 12.3% between 2019 and 2024.
To Attract and Retain the Best Talent
This has become particularly noticeable post-pandemic. In the last few years, I’ve seen a few interesting studies that directly link employee retention and talent acquisition to company values.
The most eye-opening statistic I saw comes from Qualtrics, which found that 54% of workers would choose a lower-paying job if that meant they were working for a “more ethical” company.
I’ve seen this first-hand. At one of my previous companies, I worked with an incredibly skilled marketer who moved to our company from a large corporation. Initially, I thought they decided to move because they were offered a higher salary and the ever so cliché “opportunity to work in an innovative environment.”
Eventually, they told me they decided to leave the previous company for ours as the latter was much closer to their personal, ethical values — even though it came with a salary cut.
Principles of Business Ethics
1. Integrity
Acting with honesty and following strong moral principles irrespective of a business situation. This includes being truthful, transparent, and consistent. For example, staying away from deceptive marketing or financial reporting.
2. Fairness
Treating all stakeholders, including employees, customers, suppliers, and competitors, equally and without discrimination. This includes offering the same opportunities to everyone, irrespective of their race, gender, or background.
3. Accountability
Taking responsibility for all business decisions — no matter their consequences — good or bad. For example, recognizing and fixing errors in a product or service.
4. Respect for Stakeholders
Acknowledging and respecting the rights and interests of all those affected by the business, like employees, customers, investors, and the community. For instance, offering a safe work environment and fair pay.
5. Transparency
Operating in an open and clear way and providing honest and accurate information to all stakeholders. For example, informing investors about financial performance and potential risks.
6. Compliance with Laws and Regulations
Following all relevant legal standards and avoiding any illegal activities.
You might be wondering if legal compliance should be an ethics’ pillar — after all, it’s not a company choice but a necessity. I believe it should. Many local and global regulations prevent businesses from engaging in illegal and unethical behavior. They help companies take a stance on important topics like equal opportunities and data privacy.
7. Sustainability
Running a business in a way that minimizes its negative impact on the environment and society. This is one of the newer principles, which became particularly important with global and local net-zero pledges. The goal of this principle is two-fold:
- It ensures that the organization helps preserve resources for future generations.
- It prevents any “greenwashing” attempts within the business and secures it from reputational damage.
8. Loyalty
Being faithful in commitments made to customers, employees, and other stakeholders, while also avoiding conflicts of interest.
A great example can be respecting confidentiality in client relationships — not only because the contract requires it, but also to show integrity and retain trust.
9. Empathy
Understanding and addressing the needs and concerns of stakeholders with compassion and consideration. This shows respect towards everyone who makes up the business as well as its clients.
For example, you could show your pledge towards empathy by supporting employees and customers during economic downturns.
10. Commitment to Excellence
Striving for high-quality performance and constant improvement in all aspects of business operations. This is an umbrella term for a number of approaches, like regularly upskilling your staff, auditing your existing processes, or constantly exploring new technologies that can make you more competitive and ethical.
Free Business Plan Template
The essential document for starting a business -- custom built for your needs.
- Outline your idea.
- Pitch to investors.
- Secure funding.
- Get to work!
Download Free
All fields are required.
How to Build an Ethical Business
So, how to make sure you run your business ethically? I’ve asked a few experts to share their thoughts.
Make transparency your priority.
First of all, it’s absolutely necessary to keep transparency at the top of your mind and let it guide you in all your actions. Being transparent should keep you out of trouble — after all, if you’re not doing anything wrong, you won’t have anything to hide.
Joy Aumann, a licensed realtor (CIPS), interior designer, and founder of LUXURYSOCALREALTY, told me that she made it a priority to be transparent and make sure clients know exactly what they’re stepping into. Whether it’s discussing a property’s features, its potential, or even its limitations, being upfront builds trust and prevents future surprises.
“I’ve had buyers appreciate that I’ll walk them through every detail, from disclosures to local market insights, without glossing over anything. For example, I once worked with a client purchasing a coastal home. Instead of focusing solely on its beauty, I outlined details about flood zones and long-term upkeep costs. They valued the transparency and said it gave them confidence in their decision,” Aumann said.
David Hunter, the founder of Local Falcon, also agrees that ethics in business mean being upfront with people, even if it makes you uncomfortable.
“Early on, I worked with a small business that wanted quick results from SEO. Instead of selling them a dream, I broke down the process honestly — how rankings take time, what they could expect, and why shortcuts would hurt them later. They stuck with us because we were clear from day one. That experience reinforced how far transparency goes in building trust,” said Hunter.
Embed “doing the ‘right’ thing” in your culture.
This approach, as Dominick Tomanelli, CEO of Promobile Marketing, told me, is all about making the right, ethical choices feel like second nature for your employees. Naturally, this isn’t something that happens overnight. Like all habits, it takes time and practice to know straight away how to reflect your company’s values consistently, even under time pressure.
“At Promobile Marketing, we started with a clear code of conduct, shaped with input from our team. This involvement gave everyone ownership over our values,” Tomanelli said. He also underlines that — even with the best ethical guidelines in hand — you might be caught off guard in a new situation.
That’s why the team at Promobile Marketing regularly meets to hold discussions about the ethical dilemmas they come across. “This allows us to learn from one another,” he added.
Make ethics part of your values.
This one probably won’t come as a surprise. If you make ethics part of your values, then those who are part of the business will feel more obliged to follow them. Mark Hirsch, Personal Injury Lawyer at Temple & Hirsch, suggested starting with distinct, actionable values to guarantee that operations are founded on ethical principles.
“Integrity, transparency, and accountability are the guiding principles of all interactions at our firm, from managing team dynamics to resolving client cases. To guarantee impartiality in legal proceedings and prevent conflicts of interest, we implement rigorous compliance protocols,” added Hirsch.
Stay true to your values.
Walking away from an attractive deal for the sake of staying true to your commitments is, arguably, the biggest test for your business ethics. The leaders I spoke to repetitively told me that no amount of money is worth compromising the integrity and trust they’ve built.
"Over our 20 years in business, we’ve faced situations where honesty was at stake,” admitted Jessica Munday, CEO and founder at Trio Solutions. “Once, we encountered a real estate developer whose practices raised red flags. Despite the potential revenue, we trusted our intuition and ended the partnership.”
Munday told me that walking away from an unethical opportunity ultimately makes you feel relieved, as you know you’ve made the right choice.
Ricardo Batista, co-founder and CEO at FidForward, agrees with this approach. He told me, “Never bend your policy, even for paying customers — like Apple's firm stance against government pressure.”
He said that his company, which offers an employee feedback platform, recently faced pressure from one of its clients.
“They requested access to private feedback data from a problematic case, seeking to justify an employee's dismissal,” Batista said. “We firmly refused to break our privacy promise, even at the risk of losing the contract.”
He explained to the customer that violating this policy would destroy the platform’s credibility and prevent honest feedback from all future users — not just for theirs but also for other companies.
“Fortunately, the customer understood our position and respected our commitment to privacy,” Batista added.
Lead by example.
I’m sure that, based on the previous tip, you can see that business ethics start right at the top. Naturally, not all decisions will take place with the involvement of department leaders or even the C-suite. Yet, the most lucrative opportunities on the table most probably will.
“Ethical operations truly start and end with leadership, because we set the tone for everything that happens in our daily operations,” said Elisa Montanari, head of organic growth at Wrike.
Montanari notes that companies have codes of conduct, and leaders need to model those behaviors – or even go beyond them. Your staff needs to see that your actions are fair and transparent and that you’re accountable in every interaction. The actions of a leader flow down to every single employee.
Montanari also underlined that you need to be strong enough to admit that you’ve made mistakes — ideally, as soon as possible. “Even before taking the steps to correct them,” she added.
Ensure transparency in pricing.
This is an absolute-must have, as — in my experience — operating on the basis of a vague pricing plan can lead to irreversible damage.
In the mid-2000s, I was part of a team that reached out to the company’s existing customers, offering them a free trial of a new tool. We presented the costs of a monthly plan but reassured them that the contract would not auto-renew after the free trial period had ended.
Unfortunately, that was not the case, and even we as the customer-facing team weren’t aware of this fact. I don’t have information on how many clients the company lost due to this situation. Yet, I remember how unhappy most of them were when they reached out to complain about their credit cards being charged.
On the flip side, if you can lay out each and every term and condition for your offer, you can quickly gain market trust. That’s the case of Eyeglasses.com, as Mark Agnew, the company’s founder and CEO, explains.
“In my experience, strong ethics need to be a central part of a company's culture. As the CEO of Eyeglasses.com, I‘ve always prioritized transparency in our pricing, making sure customers understand what they’re paying for. There's no hiding or misleading — customers can access high-quality eyewear without being trapped in high-cost insurance plans,” Agnew said.
He told me that the best example of how much transparency can play out in your favor is his company’s NewVision Benefits Plan.
“We launched it to provide affordable and transparent vision benefits directly to corporations,” Agnew said. “This ethical approach has not only differentiated us from our competitors but also enabled us to build long-term trust with our customers.”
Foster a conversation about ethics with your team.
Your team needs to know what being ethical means to the business and how it impacts their jobs. This includes telling them what’s deemed unethical.
Bob Schulte, CEO at Bryt Software, told me that they hold workshops with their engineering teams twice a year to ensure responsible innovation remains a cornerstone of their work.
“During one session, an engineer raised concerns about how an update to Bryt’s Document Management feature might impact user privacy. This sparked a meaningful discussion that ultimately led us to design a more transparent solution and utilize Azure’s advanced tech stack,” said Schulte.
Moments like these remind him why fostering open conversations is so important and that's exactly what he recommends. The company is also looking to leverage AI tools that will guide ethical decision-making in real-time, helping them evaluate choices through the lens of their core values.
Embed transparency into your supply chain.
I’ve mentioned earlier that it’s important that transparency guides all business decisions, and this also applies to the supply chain. CellaBeauty’s operations are grounded in ethics.
The company’s Director of Operations, Rachel Lynch, said that “one pivotal moment came when we partnered with a new raw material supplier. During an audit, we discovered gaps in their labor practices. Instead of terminating the partnership immediately, we worked collaboratively to help them implement fair labor standards, ensuring workers were paid and treated fairly.”
Thanks to this approach, the company was able to uphold ethical commitment while fostering growth for the supplier.
“The team learned that ethics isn’t just about policies and creating real-world impact. Transparency in sourcing, producing, and communicating has strengthened trust with our customers and internal team, reinforcing that doing the right thing always pays off,” she added.
Build and share data usage dashboards for your employees and stakeholders.
Arne Helgesen, CTO at Sharecat, shared with us a tip that he thinks is unconventional — to implement transparent data usage dashboards that allow employees and stakeholders to see how their data is being used and protected.
According to Helgesen, this not only promotes ethical operations but also creates trust within the organization and outside of it. As an example, Helgesen recalls consulting for a mid-sized engineering business. Rolling out AI technologies for operational efficiency raised data security and employee privacy issues.
“Together, we developed a dashboard that displayed real-time insights into how their data was being processed, anonymized, and stored. This transparency reassured employees and partners that their privacy was respected and eliminated rumors about unethical data practices,” said Helgesen.
This resulted in a 35% increase in employee involvement in just six months and allowed the firm to avoid potential legal issues by cultivating an ethical and transparent culture.
Business Ethics = More Than Just Following the Law
As many of the leaders I spoke to told me, being ethical in business not only protects you from reputational crises and legal fees. It also lets you sleep well at night, as you know that all the decisions that you’ve made in line with your ethics were a good choice.
I believe that any company, regardless of size, should refer to the ten principles I’ve listed. They cover all potential scenarios and stakeholder perspectives. Ultimately, we all want to be in business with ethical companies — customers want to buy from them, and talent wants to work for them.
Free Business Plan Template
The essential document for starting a business -- custom built for your needs.
- Outline your idea.
- Pitch to investors.
- Secure funding.
- Get to work!
Download Free
All fields are required.
![Everything You Need to Know about Partnership Businesses [+ Expert Tips]](https://knowledge.hubspot.com/hubfs/partnership-business-1-20250219-4868724.webp)
![Entrepreneurial Marketing: Find New Customers on a Shoestring Budget [+Expert Tips]](https://knowledge.hubspot.com/hubfs/entrepreneurial-marketing-1-20250220-651487.webp)
![Entrepreneurship Trends That Will Change the Business of Building Businesses in 2025 [Expert & Data-Backed Predictions]](https://knowledge.hubspot.com/hubfs/entrepreneurship-trends-1-20250219-7312699.webp)
