Ethics means adhering to values that determine the right decision or action. The decisions and actions of the project manager should be intended to achieve the best for the team and the project. Ethics, of course, depend on beliefs that act as "moral compasses" to make decisions and take action. They also reflect overall attitude towards people and their work. 
Max De Pree identifies three essential ideas that associate leadership with ethics. The first is that ethical leadership does not mean much without justice . It is the leader asking: What do I owe to the group ? The second is celibacy. Leaders behave as stewards, by continually exercising personal restraint. The third is when both ethics and leadership are on behalf of an entire group. 
Not surprisingly, De Pree derives two types of relationships that leaders create and develop in their environment. These relationships directly impact the level of importance. The first type is a contractual relationship. It is based on transactions; providing a quid pro quo in exchange for a service, for example. The other type is a covenantal relationship; a shared commitment exists to ideas, values, and tolerance. The key between the two is focus.  The former deals with means, whereas the latter concerns itself with ends.
In Leadership , James MacGregor Burns distinguishes similarly between two categories of leadership styles and their relationship to ethics. The first category is ethics of responsibility, which involves an approach to decision making and rational behavior. It requires more of a choice over the means to achieve some practical ends. It tends to deal with everyday needs and wants. The other category is ethics of ultimate means, which means to be motivated by some "higher" purpose, often idealistic and abstract.
The distinction is important, particularly in relationship with the two fundamental concepts of leadership by Burns that was discussed in an earlier chapter: transactional and transformational. According to Burns, the ethics of responsibility is associated with transactional leadership and the ethics of ultimate means with transformational leadership. 
Covey et al. take a very similar perspective to a covenantal and transformative leadership style regarding ethics, but call it stewardship instead. They define stewardship as trusting a person to be accountable for another person or cause much more than oneself. 
Project managers must always act ethically, therefore, by doing what is right. While most project managers would never disagree , the reality is that few really understand the meaning from a leadership perspective. Ethics must play a central role and there are ways for that to happen.
Project managers must lead by example. They must act according to the expectations and standards that they expect others to follow. In other words, they should not establish a "double standard"; nothing can kill the effectiveness of project managers faster. Ethics and leadership are closely tied together. 
They must emphasize ethical behavior in all dealings with stakeholders. If they compromise ethics on small issues, they will lay the groundwork for lapses of ethical behavior when dealing with larger, more important concerns. De Pree says the big challenge is to apply ethics with people daily. 
Project managers must reduce or eliminate the conditions that encourage lapses in ethical behavior. These conditions include setting an atmosphere of fear, discouraging open communication, not dealing with issues on sincere levels, and punishing the messengers. They are reflected in behavior like inconsistent messages, false feedback, and lack of trust in others.
Of course, conditions exist that project managers cannot handle directly. These conditions can make leading projects very difficult. By acknowledging their sources and impacts, they can adapt better. These conditions include the negative effects of globalization, takeovers, automation, restructuring, and corporate fraud.
They must create a positive atmosphere at work. For example, they remove bureaucratic red tape that may hinder people. This action may become an issue, because people start taking shortcuts to achieve results not in accord with ethical behavior.
Project managers must identify and eliminate as many barriers as possible without shortcoming ethics. If a conflict between the two arises, project managers must always grant ethics the highest priority.
Project managers must encourage accountability for results. A good way to do this is to have people responsible for specific tasks and deliverables in a manner that will encourage ownership. Such accountability will encourage people to pursue an ethical route simply because the effects of their work can be traceable to them. For this to happen, project managers must empower team members to encourage and support ethical behavior. That is an ongoing activity between leader and follower involvement; participation is critical. 
They must focus on "doing the right things" rather than "doing things right." Everyone should ask: "Is this the right thing to do?" Failure to ask that fundamental question can lead to oversights in ethical behavior as people concern themselves with details. Consequently, people may find themselves inadvertently "doing the wrong work in the right way."
A principle-centered orientation makes the job easier. In Principle-Centered Leadership , Covey says that principles serve as a "compass" for pointing in the right direction, especially during times of confusion and conflict. 
Trouble brews when ethics, for whatever reason, get suspended . Opportunism and self-centeredness through protection and deception become the rule. Such behavior causes what Paul Nutt describes as "ethical decision traps." These traps are usually reflected when people are reluctant to admit the suspension of ethics by placing them on an equal level with rational justification. 
 Stephen R. Covey, The Seven Habits of Highly Effective People , Simon & Schuster, New York, 1990, p. 255.
 Max De Pree, Leadership Jazz , Dell, New York, 1992, pp. 130 “139.
 Max De Pree, Leadership Is an Art , Dell, New York, 1989, pp. 58 “60.
 James M. Burns, Leadership , Harper & Row, New York, 1979, pp. 45 “46.
 Stephen R. Covey, A. Roger Merrill, and Rebecca R. Merrill, First Things First , Simon & Schuster, New York, 1994, p. 129.
 Max De Pree, Leadership Jazz , Dell, New York, 1992, p. 125.
 Max De Pree, Leadership Jazz , Dell, New York, 1992, pp. 125 “126.
 James M. Kouzes and Barry Z. Posner, Ten lessons of leadership, in A Systems Approach to Small Group Interaction , 6th ed., Stewart L. Tubbs, Ed., McGraw-Hill, Boston, 1997, p. 198.
 Stephen R. Covey, Principle-Centered Leadership , Summit Books, New York, 1991, p. 19.
 Paul C. Nutt, Why Decisions Fail , Berrett-Koehler, San Francisco, 2002, pp. 206 “226.