Chief executive officers face a variety of ethical obligations that go beyond simply following the law. Business ethics can be a gray area, with some professionals pointing to legally maximizing the bottom line as their main responsibility and others believing in corporate social responsibility. Understanding different business practices that bring up ethical considerations will help you make decisions based on your moral compass.

A good starting point for developing your business ethics is knowledge of the local, state and federal rules, regulations and laws governing business practices. Not knowing basic compliance issues regarding harassment, discrimination, health, safety, taxes and false advertising doesn’t protect you from fines, penalties, lawsuits, liens and even criminal or civil prosecution. As a CEO, you are more responsible for understanding business legal issues than most other employees. Work with an attorney or attorneys knowledgeable in these areas to get up to speed about staying on the right side of the law. Learning the spirit of the law, rather than just the letter, will help you develop business ethics that will help take your behavior beyond simple legal compliance.

Product or Service Quality

Some businesses use the concept of planned obsolescence to make sure their products don’t last more than a few years before they need to be replaced. This ensures higher sales. The products might offer excellent features and quality while they last, but eventually wear out because of the purposeful use of cheaper materials or engineering techniques. In many instances, such as with smartphones and computers, this strategy doesn’t lead to reduced sales because most of these products don’t last 10 years or more. While you can always cut quality without consumers leaving you, some quality issues can lead to increased health or safety risks. When considering the level of quality you should offer your customers, your ethical compass might simply consist of asking yourself if you’d want a family member or friend to pay the same price and get the same quality you’re offering your customers.

Truth in Advertising

Even if you don’t lie to your customers, you can mislead them by leaving important information out of your marketing communications or even misusing truthful statements. For example, some food products advertise that they are 97 percent fat free, when approximately 30 percent or more of the calories from the food comes from fat. This is because, based on volume, so much of the product is water that the total amount of weight make the product 97 percent fat free. When you create marketing communications, pretend a consumer advocate or family member is sitting in the room with you. If you wouldn’t feel comfortable giving a particular message to them, don’t send it to customers and clients.

Employee Safety and Security

While many CEOs bemoan the health and safety requirements of the U.S. Occupational, Safety and Health Administration, its rules and regulations help protect employees from accidents, prevent injuries, decrease health problems and reduce lawsuits. Meet with your property insurance company, a security expert and a premises liability attorney to learn what you can do to keep your employees, safer and healthier.


What goes around comes around, and burning bridges you don’t think you’ll need to cross again can damage your professional reputation. If you put down competitors, clients, vendors, suppliers and co-workers -- whether it’s at your current or former place of work -- people will wonder what you’re saying about them. To follow a basic code of ethics regarding your professional behavior, don’t say or do anything you wouldn’t want aimed at you.