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Updated: Jan 11, 2023


By Allen Larson

A recent study of 8,000 employees across 17 industries showed that companies with strong ethical cultures outperform their peers by 40% in various business metrics including profitability. As a consultant specializing in talent attraction and culture, it is clear that both Millennial and Gen Z employees prioritize ethical culture in their job searches. However, combining the benefits of a performance-oriented culture with an ethical one is possible.

An ethical performance culture is one in which an organization's values and beliefs align with ethical practices and behaviors. The company expects employees to act with integrity and accountability in their work. This culture should also foster empowerment, encourage a growth mindset, promote open and effective communication, embrace agility, and encourage reflection on personal efforts. When guided by ethical principles, these values can lead to high-performance outcomes.

There are several critical benefits to establishing an ethical performance culture:

TRUST: Ethical performance cultures foster trust within and with external stakeholders. Employees who trust their colleagues and leaders are more likely to be engaged and committed to the organization's mission and goals.

REPUTATION: Ethical performance cultures are crucial for building and maintaining a positive reputation for the organization. Customers, clients, and other stakeholders are more likely to do business with organizations known for their ethical practices.

EMPLOYEE SATISFACTION: When employees feel that they are working for an ethical organization, they are more likely to be satisfied with their jobs and to remain with the organization for the long term. Employee satisfaction leads to increased productivity and lower turnover rates.

LEGAL COMPLIANCE: Ethical performance cultures can help organizations avoid legal issues and regulatory violations. By promoting ethical practices and behaviors, organizations can reduce the risk of unethical actions leading to legal problems.

Creating an ethical performance culture requires leadership commitment and focusing on making ethical practices a priority. Corporate leadership sets clear ethical guidelines and expectations, provides training and resources to help employees make ethical decisions, and establishes systems for reporting and addressing unethical behavior.

In conclusion, company culture matters, and by establishing and upholding an ethical performance commitment, organizations can outperform their competition while also growing trust, reputation, talent attraction, and employee satisfaction.

Supporting Studies

Several studies on the relationship between ethical culture and business performance support the points made in the article above: A study published in the Journal of Business Ethics found that ethical leadership is positively associated with employee job satisfaction and organizational commitment and negatively associated with turnover intentions. A review of research on corporate social responsibility and firm performance found that companies with a strong commitment to CSR tend to have better financial performance, improved employee recruitment and retention, and a positive impact on their reputation. A survey of 300 business leaders conducted by the Ethics & Compliance Initiative found that companies with strong ethical cultures had lower employee turnover, higher productivity, and better financial performance than those with weak ethical cultures. A study published in the Journal of Management found that ethical leadership is positively associated with employee creativity and innovation. Research published in the Journal of Business Ethics found that companies with strong ethical cultures are more likely to attract and retain top talent and have higher employee engagement and commitment levels.


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Meet Allen Larson - a jack-of-all-trades and master of them all too! With over 20 years of experience under his belt, he's a pro at building dream teams and companies. He's a leader who knows how to make everyone feel included and always has his eye out for the next big thing. As a member of the big boss squad, he's got mad skills in everything from employer branding to hiring the best of the best, to making sure everything runs like a well-oiled machine. In short, he's a change-maker who knows how to make the workplace a happier, more inclusive place for everyone.



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