Picture this: you drive into work to find Special Investigation Unit agents or competition authorities wheeling files and computer hard drives out of your offices while television cameras record the search and seizure. An alarming number of companies have experienced these embarrassing scenes, and they raise important questions about ethics. The activities of companies like Auction Alliance, African Bank and Aurora come to mind.
Ethics govern everything business leaders do: their relationships and interactions with those around them, with those they serve and/or those who serve them, and with their duties, rights and obligations to the company they work for.
Ethics programmes can yield long-term rewards, such as customer allegiance, a reputation for honesty and better compliance with corporate governance. These benefit the bottom line.
The responsibility to design and implement ethics programmes begins with the occupants of mahogany row and should be overseen by executive directors.
Ethics guru Stanley Milgram asks: “What is it about organisations that allows them to slip the restraints of human conscience?”Marianne Jennings’s book, The Seven Signs of Ethical Collapse describes these as: pressure to maintain profits; fear and silence in the culture; a star CEO surrounded by young sycophants incapable of dissent; a weak board; failure to recognise and root out conflicts of interest; managers who believe they are creatively inventing the future; and a belief that goodness in one area atones for evil in another.
Even the most cynical worker wants to have some faith that a company’s management exercises a degree of transparent leadership. When employees see the CEO and board making poor decisions they understandably question the judgment of those at the helm. After all, aspects of corporate culture and establishing an ethical environment start at the top.
The CEO and chair of the board must be personally dedicated to the ethics programme. Companies known for their ethics and social responsibility are led by CEOs and board members who are personally committed to the mission. The ethics programmes themselves can be good management tools.
I know that short-term business goals can often collide with ethical concerns. But when employees are equipped with a thorough understanding of company values, they can respond to dilemmas more appropriately.
Ethical companies invest in an ethics officer or officers who have the authority and resources to investigate problems while also providing ethics training workshops for employees.
Companies committed to ethical standards should establish a confidential ethics telephone line to deal with questions or complaints about financial mismanagement, sexual harassment, conflicts of interest, potential ethical misconduct or other misdemeanours.
There will be challenges. Upholding ethical codes can be cumbersome, particularly when employees fear retaliation for blowing the whistle on unethical conduct.
Good ethics programmes — and transparent leaders that lead them — should work to reassure employees that there will be no retribution for reporting on suspected ethical lapses.
Today’s tough regulatory and legal environment demands that companies have ethics programmes. The question is: are CEOs serious about enforcing ethical conduct, or are ethics programmes introduced for window dressing? If CEOs and directors are ready to commit to this, they must be ready to embrace some lost revenue and demands on their time.
On the other hand, ethical leaders soon discover the primary benefit to establishing good ethics is that they become part of their company’s fibre. Good ethics is good business. If only managers at African Bank, Auction Alliance and others thought so.
• Mkhondo runs The Media & Writers Firm