The Importance of Ethics in Business: Building Trust and Success

When you’re thinking of the core tenets of a successful business, ethics might not come to mind. However, the importance of ethics in business can’t be overstated.

Ethical principles form the moral code by which a business conducts itself. In today’s interconnected world, they’re more important than ever—ethical standards help businesses build trust with consumers, ensure compliance, guide ethical decision-making and drive sustainable growth.

As a current or prospective business student, you need a thorough understanding of the role ethics play in any company’s success. Read on to learn more about the importance of business ethics in the workplace.

What Are Ethical Standards?

You probably have a personal set of moral beliefs that guide your behavior, but what are the ethical standards that guide businesses?

Business ethics aren’t much different from personal ethics. They’re rooted in the fair treatment of human beings and help business leaders make decisions that cause the least amount of harm.

There are 12 core principles that typically shape each business’s ethical standards:¹

• Leadership
• Accountability
• Integrity
• Respect
• Honesty 
• Legality (respect for the law)
• Responsibility
• Transparency
• Compassion
• Fairness
• Loyalty
• Environmental concern

How each business defines and acts on these principles depends on the industry, leadership and target clientele. Ethics in business analytics, for example, revolve around protecting customer privacy and using data responsibly. For a customer service business, ethics may center on fair treatment of customers and transparency in communication.

What Is the Purpose of Ethics?

Business ethics are necessary to protect consumers, employees and the environment from harm. However, they also serve businesses by helping to ensure long-term growth. Here are some of the key benefits of a strong set of ethical guidelines.

Promoting Trust and Credibility

One of the most important ways ethics serve a business is by building trust with customers.

Around 70% of consumers are more likely to buy from a brand they trust.² Unfortunately, that is complicated by the fact that the vast majority of consumers believe marketing and advertising professionals don’t act with integrity.³

In other words, marketing alone won’t establish trust. Businesses must remain transparent and demonstrate their ethical principles through action, not ads, if they want to grow a loyal customer base. A company known for acting with integrity and fairness is more likely to retain loyal customers, attract talent, and gain investor confidence.

Guiding Decision-Making

It isn’t always easy to decide what’s in the best interest of a company. In fact, research shows that 85% of business leaders struggle with decision distress, regretting or questioning choices they’ve made in the past.⁴

Ethical principles provide parameters to guide decision-making. They can help leaders resolve complex ethical dilemmas or conflicts in the workplace. A strong code of ethics also allows decision-makers to think beyond short-term gains, making choices that benefit the company’s growth and reputation in the long run.

Ensuring Legal and Regulatory Compliance

A business’s ethical principles should align with industry regulations. In the accounting industry, for example, professional conduct isn’t just an ethical guideline but a requirement. Financial professionals must be objective and confidential to comply with industry standards.

Clear, detailed ethical guidelines can help businesses avoid fines and even lawsuits as a result of noncompliance. However, this is true only if the business’s ethics are carefully written and adhered to in accordance with the applicable regulations.

Fostering a Positive Workplace Culture

Business ethics lay the groundwork for both internal and external relationships. They provide standards for ethical treatment in the workplace, ensuring fair opportunities, accountability in leadership and respect between coworkers.

This helps companies avoid potentially costly lawsuits over discrimination or harassment. It also supports hiring and retention. A recent survey showed that the majority of workers want to work for an ethical company.⁵ A company with clear anti-discrimination policies and fair hiring practices fosters a more inclusive and productive environment.

Supporting Long-Term Business Sustainability

A business is like a living thing—without a nurturing ecosystem, it can’t thrive. Ethics help businesses care for people and the planet, supporting the ecosystems they need to survive.

Making decisions based on ethics, rather than profit alone, may hinder growth in the short term. But a loyal customer base and positive workplace culture ensure sustainable growth in the long run.

Strengthening Stakeholder Relationships

Another important element of the business’s ecosystem is its stakeholders. Relationships with partners, investors and suppliers are all strengthened by ethical principles.

One reason for this is that corporate stakeholders are more likely to partner with an ethical business for their own sake, in order to uphold their own ethical standards and build trust with their clientele. Another reason is that principles like transparency and respect guide fair transactions with stakeholders, securing long-lasting, mutually beneficial relationships.

Case Studies of Ethical and Unethical Practices

To further illustrate the importance of ethics in business, consider these two examples.

Patagonia: Sustainable Success

Patagonia has been committed to sustainable practices since its founding. Today, all of Patagonia’s profits are used to combat climate change and protect underdeveloped land. It remains a staple of the outdoor clothing industry.⁶

Target: Boycotts Over DEI Rollbacks Hurt Profits

Retail giant Target recently reversed many of its ethical principles by scaling back its diversity, equity and inclusion programs.⁷ This led to nationwide boycotts, which the company partially blames for lower-than-expected profits in the first quarter of 2025.⁸

Learn the Pillars of Business With an Online Master of Accounting

A strong set of ethics is a pillar of any business. Ethics build trust, foster a positive workplace culture, ensure compliance and set the business up for sustainable growth.

If you want to learn more about the pillars of business to build a foundation for your accounting career, consider earning an Online Master of Accounting from the Raymond A. Mason School of Business at William & Mary. Our online programs offer a flexible path toward success. You can earn your master’s from a prestigious program without putting your life on hold.

Speak with an admissions outreach advisor today to get started.