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Integrity is an investment
Peter Beynon, regional director at ICAEW Middle East, talks about the role of business ethics
March 5, 2014 3:55 by kippreport
Most of us know what we mean by ‘integrity’, but it’s not often defined. However, it’s central to business. Conversely, it’s comparatively easy to identify cases where there has been a breakdown in integrity – where people or companies have concealed information or misled the public. All business rests on trust and confidence, and, once broken, trust can take years, if not decades, to restore. Moreover, an individual’s failure can damage a whole company. Look at the current view, especially in the West, of financial services. There have been very few bad apples, limited to some sectors of the industry, but a combination of dissatisfaction with lending charges and customer service and some high profile scandals have led to a widespread perception that “all bankers are dishonest.” So how can companies regain trust?
Leading from the front
The tone at the top is fundamental. It is rare for companies to lose integrity overnight, more often over time a culture of rule-bending or non-compliance is allowed to develop until it becomes part of the wallpaper. Obviously senior executives can’t micro-manage every last aspect of company operation, but they can lead by example. Research conducted by ICAEW last year showed that the behaviour of senior management is reflected throughout a company. But the c-suite cannot simply hope that their shining example will be followed; practical steps are also needed.
Transparent and open
Companies should encourage a culture of transparency. Employees should always feel they can discuss the ethical dimension of their work with managers, and never fear they might be ostracised for raising an ethical query, real or potential. Equally, managers should be open about why a business acts as it does. This way long-term trust can be built, and potential problems highlighted early.
Encouraging speaking out
If employees do speak up when they spot something wrong it is critical that they are supported. Whistleblowing can often mean confused loyalties and workers might fear that speaking out will be seen as a betrayal. But what starts out as entirely laudable team spirit could easily end up as a conspiracy. Companies need to be explicit that speaking out is the right thing to do, and ensure whistleblowers are looked after.
Nailing the colours to the mast
Having these policies is good, stating the publicly as well is better. It makes it more likely that people will abide by them, but also offers employees a benchmark against which to test behaviour. Ethical dilemmas are not always black or white; sometimes it is a case of identifying a direction of travel. Nailing your colours to the mast offers people a guide to behaviour, especially when the decision is not simply commercial.
Investing in the future
There are other measures available. Some companies offer ‘ethics training’ but ICAEW research suggests the benefits are patchy; no wonder when one solution is applied across myriad different industries, sectors and sizes of company. Rewarding ethical behaviour can incentivise it, but risks making it seem extra-ordinary. Even disciplinary action is a two-edged sword – if employees are ethical only out of fear it reduces the likelihood of embedding a culture of integrity. However, trust is crucial to doing business, meaning integrity is one of the best investments around.