Ethical Leadership and Corporate Social Responsibility: Driving Business Sustainability and Stakeholder Trust

Abstract

The subject of this research was to examine causal relationships between ethical leadership, CSR, business sustainability, and stakeholder trust. The study approach was exploratory mixed methods: questionnaires to 200 corporation leaders, and interviews with 15 senior managers. By using standardized scales, the variables of ethical leadership, CSR, sustainability, and trust were captured. Cross-sectional analysis of the variables of ethical leadership, CSR, sustainability and stakeholder trust gave positive significant correlations. Regression analyses also showed that ethical leadership together with CSR participation were significant predictors of enhanced sustainability and stakeholder trust. Qualitative data thematic analysis identified a values-based leadership approach to be an effective way to cultivate an ethical organizational culture practice of CSR issues like sustainability and community involvement. Combined, the results show that ethical leadership as well as the integration of CSR contribute to business sustainability, and the creation of trust with stakeholders in the long term, however, leadership entails choices between ethical and performance considerations. Additional studies may explain the changes in generations’ attitudes and better define the process of transfer of CSR values into action. This research validates the positive relationship between ethical leadership and CSR on organizational sustainability and social capital.