Eight Ethical Practices Every Business Should Adopt

Businesses aren’t only measured by their sales or extensive marketing reach; many consumers also consider their honest approach to environmental or social issues before engaging with a business. Regardless of their size and industry, companies must operate according to the ethics of our interconnected world where they’re accountable for every action, decision, and policy they make.

Running a business is packed with responsibilities, and every business owner must ensure that their operations suit a variety of people, including employees, shareholders, and customers. To achieve this, you need to be adept in business administration to aid you in handling the business effectively.

St. Bonaventure University offers an accredited online MBA program that trains individuals to be leaders in their industry. This program is designed to develop your skills, sharpen your understanding of business operations, and prepare you to be a competent but also ethical leader. With ethics becoming increasingly important in business, we will now discuss some ethical concerns that businesses must consider in 2023.  

What is ethics in business?

Ethics in business refers to the actions businesses take and the moral principles they apply when considering these actions. It could be something as simple as providing anonymity to employees with complaints. It could also be vital, like prioritizing employees’ mental and physical health and safety. 

Ethical companies have defined social and environmental principles that give people equal opportunities and discourage discrimination against employees. These kinds of companies can enhance their brand reputation and attract committed employees.

On the other hand, ethical problems occur in business when a company’s operations don’t align with society’s ethical standards. For instance, a company that discriminates against particular religions or backgrounds will be ethically incorrect in today’s diverse community. This company could lose the opportunity to hire talented people due to their discrimination. It could also cost them their reputation in the business world. 

Now that it’s apparent that businesses must embrace ethical considerations in their operations, what ethical practices should they adopt?

Eight ethical practices every business should adopt

Fair employment practices

Businesses should ensure that their hiring and promotion practices are fair and non-discriminatory. You must discourage bias against factors such as race, gender, religion, and age and provide equal opportunities for all employees. The essence of prioritizing fair employment practices is ensuring everyone within your organization has access to the same opportunities, regardless of their culture or background. Now, how do you achieve this?

Business owners must take a merit-based approach when hiring their employees. This means they should employ people based on their talents and the value they bring to the company. To achieve this, you must carefully craft your job descriptions and ensure your hiring process is transparent. You can encourage transparent procedures by implementing blind recruitment processes or standardizing interview questions to ensure every applicant gets the same treatment. You can also provide equitable pay structures where the management pays everyone according to their value or position in the company.

The usefulness of fair employment practices is that they help you base your hiring decisions on each individual’s skills, qualifications, and performance, not their characteristics or affiliations. Besides, hiring people for their abilities creates a diverse and inclusive workforce, which can enhance problem-solving capabilities within your organization.

This practice can also translate to lower turnover rates. How? Companies that uphold fair employment practices make their employees feel valued, respected, and rightly treated, which fosters their commitment to the organization.

To successfully implement this practice, you may vehemently discourage discrimination in your company and educate your employees about the importance of fair employment practices. You can also provide confidential channels for employees to report instances of discrimination and put disciplinary actions in place for individuals that don’t follow these organizational rules.

Workplace safety and health

The World Health Organization (WHO) says that about 12 million workdays per year are missed due to employees’ depression and anxiety attacks. This means that companies lose about $1tn every year. Organizations must prioritize the physical safety and mental health of their employees. This includes providing safe working conditions, stress management resources, and ensuring your workplace is free from harassment and bullying.

Workplace safety and health can be placed into two categories: physical safety and mental safety. Physical safety ensures that companies take the necessary measures to prevent accidents and health issues that might arise from work-related activities. To avoid these accidents, companies must have clean and organized workspaces and implement procedures to handle emergencies.

Mental safety, on the other hand, involves establishing an environment that supports employees’ psychological well-being. You can boost your employees’ mental health by addressing workplace stress, such as avoiding excessive overtime and cutting out workplace bullying. You can also provide resources that can help your employees maintain their mental health. These resources could be counseling services, flexible work arrangements, or even conducting stress management workshops to support your employees. 

Ensuring your employees have top-notch mental and physical health is a win-win situation. They feel more confident in their job, and you get a composed and dedicated workforce, which eventually translates to organizational growth.

Environmental sustainability

Environmental sustainability refers to your responsibility to minimize your negative environmental impact. This includes reducing waste, conserving resources, promoting recycling, and transitioning to renewable energy sources.

Most businesses are significant contributors to pollution, and environmental sustainability practices ensure that they do their part in preserving the planet. It is vital that businesses are proactive in their efforts to reduce their impact on the environment. But how can they do this? 

Businesses can start by reducing their carbon emissions. Businesses nowadays are increasingly leaning towards green energy solutions, where they try to reduce the greenhouse gases emitted into the atmosphere. Reducing your carbon footprint and switching to environment-friendly operations can help your business market itself better, as consumers now prefer environmentally sustainable products and services. 

You should also implement processes to reduce, reuse, and recycle waste. This can include minimizing your package, composting organic waste, and recycling office waste. Rather than use generators to power your offices, you can install solar panels or purchase green energy from the grid. 

Your organization can also contribute to environmental sustainability by going for suppliers who minimize their environmental impact. Practicing environmental sustainability aligns your business with the growing societal and consumer demand for environmentally responsible practices, which can significantly enhance your reputation.

Honest advertising

In the late 2000s, Airborne Health Inc., a manufacturer of herbal supplements, faced legal action for false advertising. The company claimed their product could boost the body’s immune system and help fight germs. Airborne Health Inc. didn’t back these claims with scientific evidence, and they were deemed misleading to consumers. In 2008, the company paid $23.3m to settle a class action lawsuit for falsely advertising to consumers.

False or misleading advertising hurts consumers and erodes trust in the brand, which is why businesses should ensure their marketing practices only discuss their capabilities. This is where honest advertising comes in.

Honest advertising ensures that all marketing and advertising messages accurately represent your products or services. Consumers often make buying decisions based on advertisements and have the right to truthful, accurate information to make informed purchasing decisions.  

To be completely honest in advertising, ensure your marketing strategies and communications list your capacities. For instance, an advertisement should discuss genuine price claims, warranty promises, and product descriptions. Simply put, what your customers order is what they should get.

Data privacy and security

Protecting customer data has become a critical ethical issue, especially with the increasing digitalization of business. Businesses must implement solid data security measures and ensure they respect the privacy rights of their consumers.

In today’s digitalized world, businesses often collect, process, and store vast amounts of data. This data may vary from a customer’s email address and name to their online behavior and footprint. And while this data can be of value for businesses to understand their customer’s behavior and tailor their products and services to suit that behavior, it can also be easily stolen from their grasp. Hence, every business must protect its data from security breaches.

To uphold data privacy and security in your company, you should:

  • Only collect necessary data and retain it only for as long as needed.
  • Implement strong security measures, such as firewalls and regular security audits. 
  • Ensure your customers know what data you’re collecting, how you use it, whom you share it with, and how long you’ll retain it.
  • Give customers options on the use of their data. For instance, the reject all and accept all button for cookies is an excellent way to give your customers choices.
  • Develop a plan to respond to data breaches. 

Security breaches can severely harm your customers in ways such as identity theft, financial loss, and violation of their privacy. It can also affect your business, as attacked companies often face legal penalties and significant damage to their reputation. If tech is not your specialty, you can employ the expertise of a cybersecurity specialist to maintain the security of your customers’ data.

Responsible sourcing and ensuring product safety and quality

These two ethical considerations are intertwined practices that businesses must prioritize. Responsible sourcing involves making conscious choices about suppliers, ensuring you only work with suppliers that uphold ethical practices and respect human rights. How do you achieve this? 

You must actively understand the supply chain, from getting raw materials to distributing products or services. This is how you can effectively scrutinize suppliers for potential exploitation of workers, child labor usage, and even environmentally damaging practices. 

Like responsible sourcing, ensuring product safety and quality involves adhering to high standards throughout production. This means ensuring your company practices only the safest product acquisition, manufacturing, and redistribution processes. It also means conducting regular quality checks to maintain the required standards. This helps you produce goods or services that are safe to use and meet consumers’ expectations. 

Besides this, ethically sourced, high-quality, and safe products reflect positively on a company’s brand. Customers might purchase more from you if they know the intricate safety standards of your brand’s products. Ultimately, this enhances your reputation and trustworthiness to consumers.

Community engagement

Businesses should contribute positively to the communities in which they operate. This contribution could be supporting local initiatives, donating to charities, volunteering at community gatherings, and promoting social causes. 

In essence, community engagement encourages businesses to step out of their traditional profit-making role, to actively engage and contribute to the development of their surrounding community. 

To engage with a community, a company must understand said community. This means understanding the community’s needs, challenges, and goals. A business can conduct research to discover what their community needs, and can also host community forums to listen to people talk about their challenges and goals. Businesses can also discuss their intentions with community leaders and local organizations. 

A business’s community engagement initiatives should align with its strategies and values. For example, if Parrot & Co, a children’s book publisher that values literacy and creativity wants to engage with their community, they could start a “reading hour” where employees can volunteer to read books to children. This would promote literacy and creativity (since they’re sharing stories that would spark children’s imagination) and involve the company directly with the community.

Using this method, Parrot & Co can contribute to their community and still promote their products meaningfully and impactfully. Community engagement allows businesses to give back to the public while maintaining their values.

Respect for intellectual property

Intellectual property could refer to an invention, design, images used in commerce, or literary and artistic works. Legal rights, such as patents, copyrights, trademarks, and design rights, often protect these kinds of properties. 

Having respect for intellectual property means recognizing and honoring these legal rights. This means businesses shouldn’t plagiarize other people’s work, counterfeit or “make fakes” of other people’s products, or illegally acquire business information.

It’s vital to acknowledge the effort, creativity, and investments that individuals and businesses put into their intellectual creations and not exploit their assets. It also goes beyond ethical imperative; businesses that violate IPs can face legal consequences, such as lawsuits, hefty fines, and damage to their company’s reputation.


Ethical considerations are crucial parts of a company’s operations that shape its identity, influence its success, and determine its legacy. Businesses that embrace ethical practices can enhance their reputation and increase their customer loyalty. Hence, organizations must ensure ethics is a top priority to improve their overall business performance.