In 2009, the US based Ethics Resource Center (ERC) and Hay Group published a research study that looked at the link between a company’s ethics management system and its impact on employee engagement.
Their research found considerable evidence to show that a leadership commitment to managing the ethical dimension of business is good for business. (more…)
“Ethics is not a subject, it’s a life put to the test in a thousand moments.” (after Paul Tillich)
Time and again I come across people searching for answers, for a sense of meaning in a seemingly meaningless time. Not since the period between the two great wars has humankind faced such an era of uncertainty. In the past five years, we have seen a series of assaults on the very fabric of civil society and the decline of the institutions that have served as pillars of that society has raised the collective levels of ire and uncertainty to a point where people start to question the very meaning of life itself.
It’s a sad reflection on the state of corporate fitness that the types of ethical issues that continue to emerge are more the result of an absence of any intent to manage ethically than an indication of Machiavellian intent. Although ethics gets a mention in all the recent governance reforms around the world, the way in which it has been included reflects little new thinking on how ethical organisational cultures emerge or the changing nature of the external ethical challenges confronting business leaders.
In terms of workplace culture organisations are as deep as the ocean and, like the ocean, much of what happens lies beneath the surface. Those who seek to change cultures have to find novel ways of surfacing existing barriers such as the mental models employees cling to and use to navigate their response to organisational life. Tuning into these existing employee metaphors can deliver sunken treasures that throw much needed light on the direction effective change initiatives must take.
Until perhaps only 15 years ago, business existed comfortably outside of civil society. Politicians, business people and scientists lived in peaceful co-existence, each recognising the sovereignty of their separate states. The rest of society understood their dependence on business for employment, taxes and the contribution to the economies of developed and developing countries that business provided. Like the complex ecosystem that thrives under our oceans, the little fish lived off the big fish, the big fish ate the little fish and the myriad of other species made sure they kept out of the way, while eking out an existence for themselves.
The current widespread public backlash against business and its perceived unethical practices has left industry leaders scrambling to protect and nurture their corporate reputations. While the concept of business having to earn its’ social – as well as its legal- licence to operate, is now well-entrenched with the major business leaders around the world, many now find themselves having to incorporate the two sources of capital – social capital as well as economic – into their business strategies, as both are seen as vital to overall organisational success.
PHILOSOPHER AND THEOLOGIAN PAUL Tillich once said: “Ethics is not a subject, it’s a life put to the test in a thousand daily moments.” Nowhere could this be more relevant than inside the modern-day corporation, challenged as it is from every quarter to meet the increasingly stringent demands of a public that distrusts business to balance what is good for it with what is good for society.
BEGINNING WITH THE EISE CASE IN 1991, where an honorary director of the National Safety Council of Australia was found personally liable to the tune of $96 million for the debts of that organisation, the lifting of the corporate veil has been continuous and relentless. Other landmarks in the progressive rolling back of the notion of corporate, rather than personal, responsibility have been the spectacular demise of Arthur Andersen, the amendments to the insolvency laws relating to directors’ personal liability for trading while insolvent and the increasing frequency of prosecutions under insider trading legislation.
SOME YEARS AGO WHILE CONSULTING to a large accountancy firm, I found myself interviewing a young professional who had recently joined the firm. Let’s call her Crystal.
Crystal bounced into my office, perfectly groomed, eyes shining, brimming with enthusiasm and obviously delighted to have secured her new position with a firm she felt proud to belong to.
A recent spate of corporate scandal and misdemeanour has highlighted the need to address the ethical mindset of business leaders. It is easy to be critical when a prominent corporation is scrutinised by the media for its lack of ethical foresight, however, perhaps it is more beneficial to ask why its leaders did not act in a manner expected by society. As both Patricia Dunn, former chairwoman of Hewlett Packard, and the AWB chairman have discovered, misjudgement and failure to act ethically are as sound as a house of cards. Why then does an ethical lacuna exist? Does the organisational context encourage good people to behave badly? Or is it a lack of appropriate training that limits the ability of business leaders to recognise and consequently act on the ethical challenges inherent in business?
