Safeguarding your ethical business practices and introducing new ones could be the best thing for your business.
Do ethics matter for your business?
In short, yes. Living in the ‘Information Age’ has meant that employees, businesses, and the general public have access to more information than ever before. Not only are your business’ public behaviours increasingly scrutinised, but also your employees’. Combining this with the recent growth in consumer activism and the increase in litigation related to corporate social and environmental behaviour, it doesn’t take long to realise that a single action of unethical behaviour can take down a company. Fortunately, the converse is also true – actions supporting ethical behaviours are given a greater focus and have bigger impacts for businesses when promoted.
Even without increased scrutiny, public perceptions of business practices and the costs of criminal and civil liability are simply the reflection of society’s concerns. A recent university study found that 86% of millennials find it a priority to work in companies that are socially responsible and ethical. What’s more, a 2018 study saw that less than half of millennials believe businesses behave ethically. Ethical practices not only affect whether your business attracts new talent but also whether your business has the potential to thrive in the future with increasing competition. In essence, good ethical and sustainable practices mean for good business too.
Recognising ethical and unethical behaviour in your organisation and industry
Although defining whether something is ethical is highly subjective, this article judges ethics along these indicators:
- Corruption and fraud
Ethical businesses do not engage in fraud and corruption in any and all areas of their business. This includes supply chain, operations, employment, marketing, accounting and finance. Unethical behaviours can include exploitation, manipulation, misrepresentation, inaccurate financial reporting, hiding losses, embezzlement or unethical investing. By not engaging in corruption and fraud, you are recognising that these actions can not only cause harm to your business but also the society and environment as well.
Engaging in sustainability practices requires long term thinking and considers the needs and rights of future generations. Sustainable practices value diversity in natural, economic, and cultural systems in all areas of business. These include supporting sustainable development, having social or environmental objectives (rather than just purely economic objectives), and improving supply chain management. By engaging in sustainability practices and showing corporate social responsibility, you are recognising the importance of uplifting other businesses, societies, and environments. It is the recognition that your own business is part of an interrelated system.
- Ensure your operational practices and systems support ethical behaviour
It only takes a single employee to commit an unethical act that could ruin the reputation of the business. Make certain all your employees practise ethical behaviours in the workplace. Recognise how and when your organisation or industry culture motivates unethical behaviour. Ensure and promote that your operational policies, procedures, KPIs, budgets, and incentive systems support ethical behaviour.
Ensuring and adopting ethical practices not only protects your business, but allows it to be competitive, motivates employees, and attract the best new talent. It allows your business to operate sustainably and thrive well into the future.