Teach, learn, practice... and demonstrate courage. Traits of character are best transmitted to children by the example of their parents and other adults in their life. Set high standards for them, but expect no more than you deliver yourself.

Also, let them have heroes. Learn to point out and discuss the admirable traits and behaviors of others in life, and in fiction, with your children. Highlight what is good and noble in people. Biographies make good reading for young minds, so make well written books about worthy people available to your children. Buffer the amount of worldly sleaze and cynicism they are exposed to in their early years.