No business exists in a vacuum, frozen in time. Even the longest established companies are constantly changing. With every new name on the payroll, new contract or new customer, the business evolves. But there are some enduring principles that must remain even as the business develops and adapts.
Culture and values are central to long-term success. How a business adopts an ethical approach towards its staff, shareholders, customers and regulators, as well as within its own operations, has a bigger impact than any performance measure or operational improvement.
And demonstrating a clear commitment to ethical behaviour is one of the main drivers of better performance. It delivers an advantage when recruiting, it adds value to a brand, and it instils trust and confidence in partners, suppliers and others that the organisation is well run and resilient.
Sophie Wales, Head of Ethics at ICAEW, says: “All businesses face ethical questions every day. Just consider some of the issues that have emerged in the past decade that now fall within finance’s remit: cyber security, heightened visibility and presence on social media, the growing awareness of supply chain risk extending into areas such as modern slavery, and a company’s role and responsibilities within its community and to the environment.”
These issues are all constantly changing: indeed, disruption is the hallmark of the past decade and possibly of the one to come. They are all subject to far more scrutiny from regulators, press, NGOs and the public. And the way they are addressed and managed gives an insight into a company’s core values.
Leadership must come from across the organisation, but virtually every aspect will require the involvement of the finance team. “Most of the recent corporate scandals can be directly linked back to ethical failings within leadership. The tone from the top allowed the wrong kind of culture to flourish, where accountability is trumped by impunity and where transparency falls victim to obfuscation and error,” argues Wales.
“The finance department, therefore, has a crucial role to play. It’s critical that they, in their role as guardians of the company’s ethical framework, have a solid and robust foundation of their own to fall back on. Crucially, those foundations must adapt and evolve to meet the changing demands of business.”
Achieving that is not a matter of simple knowledge. Few ethical challenges will have simple right and wrong responses. They require technical understanding, rigorous appraisal and skilful handling. Accountants must have the necessary skills to apply professional judgement in a given situation, taking into account what has been learned as an ACA student about their ethical responsibilities as a Chartered Accountant.
There will be unique ethical challenges throughout any Chartered Accountant’s process of learning and career. They serve a variety of masters: senior management, external stakeholders, regulators; and above all the public interest responsibility of their profession. Because of the rigorous and effective training (and continued professional development) chartered accountants can speak up and take a lead.
None of this can happen without one critical element: professionalism. That goes beyond merely knowing the Code of Ethics: it means embodying the right behaviours and having the ability and willingness to push back against those who might compromise the integrity of the business.
That confidence comes from a qualification that prioritises not only technical knowledge of the ethical framework but also challenges accountants with scenarios that accurately reflect the ethical dilemmas a Chartered Accountant may face in business. It demands that accounting professionals stand against unethical and illegal business practices, and supports them in every aspect of doing so. They must be role models for the rest of the business.
All Chartered Accountants are expected to model the right behaviours and follow ethical obligations not just in their own role and personal life, but also by demanding that businesses do the same. They are strengthened in this by a CPD and member support regime that ensures they retain that focus throughout their careers.
Accountants know they are committing themselves to a difficult path, requiring a solid technical foundation and the confidence to challenge senior colleagues where they identify areas of concern. With the ACA they can follow that path with confidence.