Ethical leadership has become a business priority for employees, executives, and customers. In The HOW Institute’s 2024 State of Moral Leadership in Business, 93% of respondents said the need for moral leadership was more urgent than ever, compared with 88% in 2022 and 86% in 2020. Other 2024 research links ethical conduct and trustworthy leadership with stronger employee commitment, better customer relationships, and greater confidence in organizational change.
Contents
- The state of moral leadership
- How employees experience ethical managers
- Moral leadership and organizational performance
- Unethical behavior, reporting, and workplace health
- Trust between leaders and employees
- Trust, customers, and business results
The state of moral leadership
The HOW Institute’s 2024 survey indicates that moral leadership is widely viewed as an increasingly urgent need. The 93% result in 2024 was 7 percentage points higher than the 2022 result and 7 points higher than the 2020 result. The survey’s comparison describes change across those survey years; it does not establish that every organization improved at the same rate.
The distribution of top-tier moral leadership was limited across organizational roles. In 2024, 10% of CEOs and 13% of managers were classified in the top tier of moral leadership. The figures suggest that seniority alone is not equivalent to strong ethical leadership: the manager result was higher than the CEO result, while both remained minority shares.
Employees’ ratings of their own managers also varied by level. The HOW Institute reported that 7% of entry-level employees rated their manager as a top-tier moral leader. The corresponding figures were 10% for director or mid-senior employees, 10% for associates, 15% for middle-management employees, 11% for senior-level employees, and 25% for executive or C-suite employees.
These results are best read as perceptions of managers among different employee groups, not as a ranking of employees’ own ethics. They also show why an ethical-leadership program cannot rely only on executive messaging. Employees at different levels may encounter different managers, incentives, and decision-making practices.
How employees experience ethical managers
The HOW Institute connected manager quality with employees’ willingness to recommend their organization. In 2024, 98% of employees reporting to top-tier managers said they would recommend their organization as an excellent place to work. Among employees reporting to bottom-tier managers, the figure was 66%.
Job-search behavior showed a similar pattern. Eleven percent of employees reporting to top-tier managers were actively seeking a new job in 2024, compared with 29% of employees reporting to bottom-tier managers. In the earlier 2022 survey, the comparable figures were 19% for employees reporting to top-tier managers and 38% for those reporting to bottom-tier managers.
| Manager tier | Recommend organization as excellent place to work | Actively seeking a new job, 2024 |
|---|---|---|
| Top-tier | 98% | 11% |
| Bottom-tier | 66% | 29% |
The 2024 results describe an association between the reported manager tier and employee attitudes. They do not, by themselves, prove that manager ethics caused every difference in recommendation or job-search behavior. Still, the gap is operationally important: ethical leadership is experienced through everyday management, not only through formal values statements.
Moral leadership and organizational performance
The HOW Institute also reported differences in employees’ views of customer satisfaction, adaptability, and near-term business prospects. Among employees reporting to top-tier managers, 79% strongly agreed that their organization had satisfied customers. The corresponding results declined across the reported manager tiers: 65% for second-tier managers, 58% for third-tier managers, 31% for fourth-tier managers, and 12% for bottom-tier managers.
Employees reporting to top-tier CEOs were also more likely to strongly agree that their organization adapted quickly to internal and external change. The result was 75% for the top tier, compared with 52% for the second tier, 41% for the third tier, 20% for the fourth tier, and 8% for the bottom tier.
The survey found the same ordered pattern for expectations about the next 12 months. Sixty-eight percent of employees reporting to top-tier CEOs strongly agreed that their organization was positioned to improve business results in the next 12 months. The figures were 49% for second-tier CEOs, 35% for third-tier CEOs, 17% for fourth-tier CEOs, and 6% for bottom-tier CEOs.
| Reported leadership tier | Strong agreement: satisfied customers | Strong agreement: adapts quickly | Strong agreement: improve results in next 12 months |
|---|---|---|---|
| Top tier | 79% | 75% | 68% |
| Second tier | 65% | 52% | 49% |
| Third tier | 58% | 41% | 35% |
| Fourth tier | 31% | 20% | 17% |
| Bottom tier | 12% | 8% | 6% |
These are employee-reported organizational outcomes grouped by leadership tier. They should not be treated as forecasts of revenue or as a controlled test of leadership interventions. They do, however, provide a consistent pattern across customer experience, change readiness, and expected business improvement.
Unethical behavior, reporting, and workplace health
Gallup’s 2024 Most Unethical Behavior Goes Unreported and Unresolved reported that 23% of U.S. employees had personally seen or had first-hand knowledge of unethical behavior in the past year. Employees with that awareness were 2.7 times as likely to be actively disengaged and 2.3 times as likely to be burned out as their peers. They were also 70% less likely to strongly agree that they were connected to their organization’s culture and 45% more likely to be watching for or actively seeking another job.
Reporting remained incomplete. Gallup reported that 43% of employees who witnessed unethical behavior reported it. Among non-reporters, 22% said they thought no action would be taken, 20% said they were afraid of retaliation, and 9% said they had previously reported an issue and had not had a good experience. Leaders and managers with first-hand awareness reported at a 55% rate, compared with 39% among other employees.
Gallup’s 2022 Only 4 in 10 Employees Report Unethical Behavior also found that employees who strongly agreed their employer would do what was right after an ethics concern reported at a rate 24 points higher than employees who did not strongly agree. In that research, 40% of employees with knowledge of unethical behavior actually reported it, while 90% of employees in Gallup’s 2020 survey said they would report unethical behavior in the future if they saw it at work.
The difference between stated future willingness and observed reporting is a useful leadership signal. A speak-up culture depends not only on a policy or reporting channel, but also on confidence that leaders will respond fairly and that retaliation will not follow.
Trust between leaders and employees
Gallup’s 2024 Why Trust in Leaders Is Faltering and How to Gain It Back reported that 95% of employees fully trusted their leaders when those leaders communicated clearly, led and supported change, and inspired confidence in the future. The finding identifies a combination of leadership behaviors associated with full trust rather than a single communication tactic.
PwC’s 2024 Trust in US Business Survey found a perception gap between executives and employees. Eighty-six percent of business executives said they highly trusted their employees, while 60% of employees said company leaders highly trusted them. Sixty-one percent of employees said a perceived lack of trust from leadership affected their ability to do their jobs well.
Executives also recognized trust as a leadership responsibility. Ninety-five percent agreed that organizations have a responsibility to build trust, and 93% agreed that building and maintaining trust improves the bottom line. Yet 94% said they faced at least one challenge when building trust with stakeholders. Twenty-four percent cited a lack of clear ownership of trust among leaders as a top-three challenge, up 10 points from 2023, while 24% cited a lack of clarity about what stakeholders want, up from 17% in 2023.
Trust expectations also include fairness and ethical conduct. In PwC’s survey, 77% of employees said fair pay was very important, 77% said fair treatment was very important, 72% said protecting employee data was very important, and 72% said ethical behavior was very important.
Work design was another trust issue. Sixty-eight percent of business executives said they trusted remote and in-person employees equally, while 20% trusted in-person employees more. Seventy-one percent of employees said flexibility around when work gets done would build trust, compared with 43% of executives who said they currently offered that flexibility. Sixty-nine percent of employees said flexibility around where work gets done would build more trust, while 39% of executives said they currently offered it.
Trust, customers, and business results
PwC’s 2024 Trust in US Business Survey shows how ethical leadership extends beyond the workplace. Forty-two percent of executives cited customer engagement as the biggest risk if customers did not trust the business. Forty-one percent cited the ability to expand into new geographic markets or customer segments, and 38% cited profitability.
Consumer behavior reflected those risks. Sixty-one percent of consumers had recommended a company they trusted to friends or family, 46% had purchased more from companies they trusted, and 28% had paid a premium at companies they trusted. At the same time, 40% of customers no longer purchased from a company because of a lack of trust.
Employee trust also had business implications in the PwC findings. Executives cited productivity as the biggest risk if employees did not trust their employer, at 42%. They cited product and service quality at 41%, operational efficiency at 40%, and profitability at 38%. Sixty percent of employees said they had recommended a company as a place to work because they trusted it, while 22% said they had left a company because of trust issues.
The practical basis of trust was specific. Seventy-nine percent of consumers said protecting their data was very important to earning their trust; 74% said quickly responding to and resolving their concerns was very important; and 73% said delivering a consistent and reliable customer experience was very important. Forty-five percent of employees said it was very important for companies to disclose environmental impact, such as a net-zero commitment.
Together, these statistics frame ethical leadership as a measurable workplace and stakeholder issue. The strongest signals concern whether leaders act consistently, protect people, respond to concerns, communicate clearly, and make trust an owned responsibility rather than an abstract value.