Is there a need for more focus on business ethics?
Employees are the key indicator of the ethical temperature in today’s organisations. They are at the frontline of how the organisation interacts with its customers and suppliers.
If they are not listened to when they have the courage to raise concerns, it implies that a company’s talk of values and “doing the right thing” is just that – talk. The way those that speak up about misconduct are treated shows how seriously an organisation really takes ethics.
Although the Institute of Business Ethics would advocate doing the right thing for its own sake, there are always pressures to show that doing business ethically also pays.
Companies that operate to high ethical standards have been proved to show increased financial performance over time, due to increased employee engagement, attracting high-quality employees, enhanced reputation and generating trust among other stakeholders.
In order to affect business behaviour, ethical values need to be embedded throughout the organisation, from the shop floor to the director. The articulation of corporate values is the foundation of any ethics programme.
A code of ethics, communications, ethics training, and supportive tools such as speak-up and advice lines help to embed these values.
But the big question remains: do ethics programmes actually have any effect on corporate culture?
In both the United Kingdom (UK) and continental Europe, awareness of corporate ethics programmes increases the ethical awareness of employees and their perceptions of ethical culture.
In both the UK and continental Europe, employees in organisations that provide a code of ethics, a speak-up line, advice/information helplines and ethics training are more likely to say that honesty is practised always/frequently in their organisation; are less likely to have been aware of misconduct in the preceding year; and are more likely to agree with each of the indicators of an ethical culture.
To create and maintain a strong ethical culture, core ethical values need to be identified and integrated into everything the organisation does – from external processes such as buying and selling to internal ones such as governance and accounting.
From the first interview to their last day of work, employees should feel that the company’s core values form the basis of every decision it makes.
The quality and style of the leadership will influence the tone of the entire organisation. While the collective tone at the top of the organisation is of utmost importance, there are also “leaders” at every level, who others will naturally try to emulate.
“Tone from the middle” is as important as “tone from the top”.
Research into embedding ethics in the workplace indicates that employees consider their line manager as the biggest enabler and teacher of ethics in their organisation.
Achieving buy-in from the management tier is therefore imperative. Organisations need to explain how their ethical values align with the business strategy to enable ethics to become a business priority.
They should also frame ethical values as a positive contributor to the business. This will achieve greater buy-in from hard-pressed managers who are trying to deliver.
By outlining the business case, managers can understand why it is important to consider the ethical dimension of decision-making and encourage their teams to do so, too.
However, it is important that managers not only talk about ethics but embed it into all their decision-making. Setting the right example is key.
The Institute of Business Ethics is a British organisation established to “encourage high standards of business behaviour based on ethical values”.
