Sometimes, however, these commitments are not translated into the operations of the organisation. Some organisations are using the ethics issue as a public relations (PR) exercise and are only paying it lip-service. Other organisations, especially those operating globally, may find it a real challenge to embed ethics in the decision-making process of their organisation.
Behaving ethically in organisations, if taken seriously, is a standing challenge but one that's worth trying to meet, as Marianne M Jennings notes in the article, Beware of the signs of ethical collapse.
Reporting with Integrity
ICAEW's own publication on this subject - Reporting with Integrity - proposes that to instil ethical behaviour, businesses should adopt a robust framework of five interconnecting, mutually reinforcing, organisational drivers. These drivers are:
- Leadership - boards of directors and senior management are in a prime position to embed ethics in an organisation by influencing that organisation's strategy, objectives, structure, policies, procedures, decision-making, communication and culture. As well as creating the right environment, leaders should set the right tone at the top by practising what they preach and setting a good example to others;
- Strategy - ethics should be incorporated into the organisation's mission, vision, and objectives and be supported by the policies and procedures of that organisation;
- policies and procedures - the policies and procedures that should be intertwined to a greater or lesser extent with ethics are corporate governance, codes of conduct, reward and recognition policies, recruitment, appraisals, training, disciplinary process and helplines;
- Information - information and communication are essential to articulating what 'ethics' means for that particular organisation. One of the main ways in which organisations communicate their values is in their codes of conduct. However, this is not enough. An organisation's values need to be part of everyday discussions and decisions. In addition, leaders should be committed to obtaining credible feedback on whether the organisation is living up to its values by looking at various indicators such as formal reporting on breaches of code, employee surveys and opinions from other stakeholders; and
- Culture - organisations should encourage certain attitudes and standards of behaviour and the notion that everyone within the organisation is responsible and accountable for behaving ethically. An organisation which promotes openness, transparency and accountability is more likely to encourage responsibility, which is essential for the promotion of ethical behaviour.
Conclusion
Ethics is important for performance, reputation and trust of the organisation, in good and bad times. Relegating ethics to the back-burner due to cost considerations or paying it only token attention, as part of a PR exercise, will eventually lead to damaging questions being asked about whether your organisation does really live up to its values.
ICAEW and ethics
ICAEW considers ethical behaviour in business to be of critical importance to maintaining confidence in markets.
The Woolf report (PDF 1MB/152 pages), commissioned to examine the ethical procedures of UK arms company, BAE Systems, includes a generally-applicable set of 23 recommendations to help directors and boards of global companies achieve the highest of ethical standards.
ICAEW has developed an ethics podcast which you can listen to any time and any place. Each month we will be updating the podcast with ethics-related news items that might be of interest or essential information that will help you keep up to date. You can choose to listen to audio files on your computer or automatically download the files to your MP3 player.
Further information on podcasts, ethics articles, publications and events can be found on www.icaew.com/ethics. ICAEW also runs a dedicated ethics helpline on +44 (0)1908 248 250.