Ethics is a competence, not about being a nice person, according to Professor Chris Cowton, Associate Dean at the Institute of Business Ethics (IBE). 

The IBE recently published a report on the models to be found in FTSE 100 codes of ethics, and another on FTSE 350 companies, which builds on its 2021 report on FTSE 100 codes of ethics. 

For Professor Cowton, ethics as a professional competence involves being able to identify the ethical issues in any given situation, forming a judgement about the appropriate action to take, and then pursuing the ethical course of action. This can sometimes take courage and perseverance. 

Quite often, people overestimate their ethical competence; it is necessary to maintain competence in ethics by practising it often. Included within that competence is the ability to actually listen to others and make a conscious effort to value diverse perspectives.

Professor Cowton stresses the importance of maintaining an awareness of how we make decisions as individuals. “The great enemy of ethical decision-making is rushing, and that tends to happen because of pressure: pressure to meet deadlines, pressure to meet KPIs, etc. Sometimes we’ve got to carve out space and just stop and think.” 

Professor Cowton encourages the use of decision-making frameworks to assist organisations with making better ethical decisions. These provide various prompts and prisms through which decision-makers can view the options and potential consequences. However, the quality of the decision is enhanced by the richness of the decision-making process. Professor Cowton cautions against using the frameworks as a tick-box exercise to justify a preferred outcome.

Professor Cowton draws a distinction between behaviour that’s deliberately wrong and behaviour that’s unintentionally wrong. “I think an awful lot of behaviour at least starts out unintentionally wrong.” 

By practising their competency in ethics, accountants can train themselves to become aware of their blind spots and biases, and to actively consider ethical consequences of their actions.

For Professor Cowton, the concept of professional-organisational conflict represents an opportunity, not just a challenge. The concept refers to the potential tension between an accountant’s professional duties and responsibilities on the one hand, and what the organisation might require in practice of its employees on the other. “If we think about the public interest that accountants are supposed to serve, this represents an opportunity for accountants to bring a higher standard of behaviour to the organisation.”

When challenged on whether accountants really can make a difference to organisational culture, Professor Cowton says: “It depends on their position, of course, but actually, if you look at the code of ethics, they’re supposed to make a difference to the extent they’re able to.” 

He cites Part two of the ICAEW Code of Ethics, which sets out a requirement on accountants in business to encourage and promote an ethics-based culture within the organisations. This includes establishing policies in relation to education and training, whistleblowing and speaking up, and the prevention of behaviour that does not comply with laws or regulations.

Professor Cowton sees accountants as “embedded professionals” and acknowledges the significant responsibility that entails. “I don’t think you’re expected to be an ethics warrior, or that ethics should be the only thing you do. But practically, it’s not a bad idea. Because if you can get good things put in place, like a code of ethics and a speak-up policy [for the organisation], then that’s actually going to improve the ethical culture of the organisation.”

Professor Cowton has also been working closely with ICAEW on creating the new ethics CPD modules that will be rolled out to the profession later this year. Two modules are particularly relevant to the discussion: Practising Professionalism and Ethical Decision Making. These modules guide users through the fundamental principles in the ICAEW Code of Ethics and the conceptual framework. Says Professor Cowton: “Professional accountants have the Code of Ethics, which would be a weighty tome, if you were to print it off. There’s lots of material in there to help guide decision-making, including the five fundamental principles and the conceptual framework, which encourages accountants to consider whether there are any threats to their ability to comply with the fundamental principles in certain situations, and if so, how to remove or mitigate those threats.”

You can learn more about Professor Cowton’s views on ethical culture and decision-making by registering for the webinar on 15 June 2023.