See also my blogs:
God in Relation to Law: Ex Lex, Sub Lego or Sibi Ipsi Lex
Distinctions in God's Will from a Calvinist Perspective
God just *IS* the standard of what is good, by which everything else is compared. While it's an axiom and presupposition that God is the standard of goodness, there are also subsidiary reasons to think it makes sense and is the case. For example, if God knows all things [including all possibilities], then God know the best means to the best ends. God knows all possible consequences and outcomes to all possible decisions He or creatures could make. But then people will ask, how does God know, or learn or determine what is "best"? Well, that's based on God's perfect rationality. If God were perfectly rational, then he wouldn't be agent irrational. Rather He'd not only be omniscient [all-knowing] but also all wise [omnisapient]. In God's wisdom He knows that what is for His greatest glory is also for the greatest good of creation as a whole. Within those parameters God is free to create any world(s) He wishes. There may not be a single top world that's best. There may be a number of worlds, or even an infinite number of worlds that fit those criteria and parameters from which God could choose to create.
It might be argued that that conception would imply what is good is ultimately determined by consequences or state of affairs such that God really isn't the standard of goodness, but merely an observer and implementor of the good [i.e. the good is actually outside of God]. No, because the possibilities exist within God [His mind and powers]. There are no possibilities outside of God. Moreover, that might just be an analogy that might help others see why it can make some sense that God is the Good.
Another example of why it could be reasonable to think that God JUST IS the standard of goodness would be the Neo-Platonic insight that some Christian theologians like Augustine subscribed to which says that being just is goodness. Since God is pure uncreated and infinite Being, therefore God is pure uncreated infinite Goodness. Evil then would be defined as the sufficient privation/negation/absence/twisting/corruption of being or goodness [i.e. the principle of privatio boni].
As a Calvinist, I also think another aspect in determining what is evil is also by what violates God's 1. will of Demand [i.e. preceptive/prescriptive will which are His revealed commands], 2. God's will of Delight [i.e. God's gracious heart], 3. God's will of Design [e.g. cancer violates the original design of human biology], 4. God's will of Direction [i.e. a violation of God's supernaturally revealed specific will for someone]. Though, admittedly, from a Calvinist point of view God's 5. will of Decree ordains that the four above senses of God's will will sometimes be violated. Nevertheless, God doesn't ordain evil/sin/suffering for their own sake, or in isolation. He doesn't saction them in the sense of delighting in them. Yet He ordains them for other 2nd order goods that would not obtain if He didn't allow or ordain them to happen. Second order goods that will far outweigh the evil that is permitted/ordained such that God has morally and rationally sufficiently reasons to allow/ordain them.
Ultimately, God is the standard of Goodness due to His Sovereignty as the Supreme and Perfect Being [the ens perfectissimum and the summum bonum]. God just is the Arbiter of what is Good. But not in an arbitrary capricious way. God is a RATIONAL and Essential Arbiter of what is Good ["essential" in the sense of being = good]. That's why I hold ot Divine Command Essentialism rather than pure essentialism or pure voluntarism. God has eternally known His manifold perfections and excellencies and omnisciently and omnisapiently knows that He is the best possible Standard by which all creation ought to be modeled, evaluated and judged.
