The unplanned and ignominious departure of David Jones’ CEO Mark Mcinnes begs a number of questions, not only of his alleged conduct towards employees but also ‘who else knew’. The subsequent leaking of press reports and further allegations of misconduct cast a shadow over the whole organisation whose primary stakeholders are mostly women. It is fair to ask did anyone know of his various liaisons; his colleagues;, other executives, the corporate professionals charged with managing the cultural antennae of the company. And what about the Board?
Did a number of people simply go along to get along to ensure David Jones’s success wheels kept turning? Did they conveniently turn a blind eye to their duty of care and their duty to set the tone from the top? Or were they simply, as many Boards continue to be, blindsided by the unrecognised, undiscussed and unresolved day to day activities that shape the ethical dimension of every organisation’s culture? Cultural inertia or ethical muteness are the biggest barriers to creating healthy workplaces were employees can feel safe to raise issues of concern.
The “I did not know” defence no longer stands up. People listen with their eyes and the day is long gone when a Board can simply sign off on a values statement and assume that policies alone will drive employee behaviour. DJs had is Code of Ethics as did Enron, Goldman Sachs, Visy, Amcor and many other corporations whose behaviour has been found wanting.
Concepts such as duty, responsisbility and accountability are an essential part of the psychological contract between directors and shareholders.All too often they become casualties when corporate leaders fail to match standards of behavior to the public expectations of accountability.
The ethical issues that haunt directors are more often the result of an absence of any intent to manage the ethical dimension of their enterprises. Contemporary research shows that Australian directors demonstrate a passive orientation to organisational culture and rely on corporate policies to shape cultural development. The dominance of legal and accounting perspectives around the boardroom table lulls business leaders into a false notion that culture is inherently unmanageable despite case histories from long lasting organisations including Nordstrom’s, John Lewis Partnership and American Express demonstrating otherwise.
Every Board needs an actionable board strategy for managing ethics that ensures that culture can be supervised and reviewed in relation to business strategy and goals. Organisational ethics must be anticipated, measured and actively managed or else it mutates. Character, the touchstone of personal ethics cannot be assumed, If ethical accountabilities are not clearly defined in senior managers’ KPIs then they present a serious risk to the reputation of the company, an asset increasingly worth protecting.
What do you think? Are Boards responsible for choosing CEOs that uphold the integrity of the organisation they manage an are CEOs accountable for a higher standard of ethics? How are ethics managed in your organisation?
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