“Corporate executives and business owners need to realize that there can be no compromise when it comes to ethics, and there are no easy shortcuts to success. Ethics need to be carefully sown into the fabric of their companies.”

Vivek Wadhwa

ETHICS IN ACTION

Business ethics, underpinned by ESG, successfully delivers sustained business growth by inspiring stakeholder trust.

WHAT IS IT

What is business ethics?

Business ethics goes beyond current topical initiatives such as CSR or ESG. They are the rules, standards, codes and principles that guide morally appropriate behaviour relating to an organisation’s operations and relationships with employees, customers and society.

Increasingly, customers, partners, shareholders, and employees want to understand the ethical programmes of an organisation to track and manage day to day workplace issues, such as:

environmental, social and governance (ESG)
corporate and social responsibility (CSR)
transparent financial reporting and investing
sexual harassment
diversity and discrimination
health and safety
open social media communication
strong data privacy practices
Use and accountability of AI

It’s also essential that an organisation’s ethical programmes remain aligned to consumer and societial trends. Which means they must be subject to regular review and refinement.

What

WHY MATTERS

Why Business Ethics Matter

Business ethics are the rules, standards, codes and principles that guide morally appropriate behaviour relating to an organisation’s operations and relationship with employees and society. It applies to all aspects of business conduct by individuals and the organisation as a whole.

Ethical marketing is the process whereby an organisation promotes its goods and services based not only on the way they benefit customers, but also their social and environmental contribution.

As such, business ethics is a central philosophy within an organisation’s commercial strategy – and runs through everything from ensuring advertisements are honest and trustworthy, to building strong relationships with consumers based on shared values.

It also has a big impact on business performance

92%

of millennial consumers are more likely to buy products from ethical companies.

82%

of those consumers believe ethical brands outperform similar companies without ethical principles.

With so much media disinformation now circulating, business leaders must bridge the trust gap - and help rebuild credibility with the public. Collectively, we all need to do better - and there are high expectations for business leaders to pave the way.

This has put organisations under pressure to create effective business ethics programmes. Stricter regulation requires companies to strengthen compliance underpinned by definitive rules and regulations. Meanwhile, employees, customers, shareholders, business partners and society alike expect ever higher standards of integrity and ethical business conduct.

The case is clear – successful businesses need effective business ethics.

Why

BUSINESS DRIVER

Good Business Ethics is a proven driver of business growth

Responsibilities for corporations now go beyond the traditional business model of increasing shareholder profits, to striving to meet the changing expectations of an ethical business in society.

As a result, companies are adapting the way they do business to become more ethical and ensure their new responsibilities are underpinned by non-financial, ESG performance metrics:

E : is the impact an organisation has on the environment,

S : is the impact an organisation has on society and human relationships,

G : is the way in which an organisation governs itself to make decisions which deliver its culture, behaviours and ethos.

As more investors follow the trend to use ESG criteria to make investment decisions, there is greater pressure on organisations to demonstrate their ethical performance.

This creates two challenges for business leaders:

How to demonstrate and promote the effectiveness of their business programmes such as ESG (including CSR and D&I), to strengthen business reputation, customer loyalty, employee retention, operational resilience and sustainable ethical growth while making a positive impact on society.
How to mitigate the risk of potential business ethics failure, and the resulting loss of customer and employee trust. When errors go ‘viral’ they can severely damage business reputation and hinder success.

BUSINESS ETHICS IMPROVE YOUR ABILITY TO:

RETAIN GOOD EMPLOYEES

Talented individuals want to be compensated fairly for their work. Companies who are fair and open in these dealings have a better chance of retaining talented people.

MAINTAIN A POSITIVE WORK ENVIRONMENT

Ethical employees are perceived as team players. They develop positive relationships with coworkers and their managers trust them with confidential information.

AVOID LEGAL PROBLEMS

When organisations focus on profit at the expense of compliance or ethics, the penalties can be severe. Large legal fees and fines or sanctions can be imposed by governmental agencies. The resulting negative publicity can cause long term reputational damage that can end up being more costly still.

Measurable Benefits

There’s no doubt that implementing and upholding ethical practices can deliver a number of benefits for your business. However, in order to reap these rewards, it’s important to establish the right mindset to get there.

Those organisations that enjoy the best results, are the ones that accept that they need to change and improve the way they behave and operate. In other words, before you can introduce successful ethical practices, you must first acknowledge that there are issues and imperfections in your current operations – that you’re willing to work to resolve. We are here to support, advise and guide you through this process.

Above all, remember: establishing ethical business practices is the right thing to do. Organisations with an ethical workplace environment recruit and retain more top performers, enjoy a stronger reputation and are more trusted by their employees. In turn, they attract more powerful, stronger partnerships with third-parties, creating more positive business results and PR for all concerned.

Indeed, being ethical in business delivers benefits across the board. It fosters healthier, more productive relationships; opens the door to media opportunities; ensures employees are happier, delights customers and the supply chain… it all adds up to a blueprint for a more successful way of working.

Good

WHY TRUST

Trust: the human currency of the 2020s

As a human currency, trust is at all time low. To improve these low social scores, organisations must understand where they are by measuring the trust levels of their organisation according to the following two components:

1. Customer trust – Essential for business growth

A recent study concluded that 63% of consumers believe that they have the power to force organisations to change. And 92% of millennials are more likely to buy products from ethical companies they trust. Many of the world’s leading brands have strong and demonstrable ethical standards which guide their employee’s behaviour and performance to build business trust.

2. Employee trust – An organisation’s most powerful untapped growth tool

Studies have shown that 70% of candidates want to work for an organisation that has strong ethics. When employees trust the ethics of their organisation and can see the positive impact, they become a highly effective and committed loyal channel for externally promoting the success of their employer. 58% of employees have the power to force corporations to change.

DOWNLOAD THE

FULL DOCUMENT

Trust

APPLIED ETHICS

Applied Ethics

By creating a comprehensive, integrated blueprint for your ethical principles and journey of change, our targeted six-pillar framework ensures your organisation stays on track to meet its objectives efficiently and effectively. Each pillar includes key focus areas and principles for adoption, working together to deliver success.

For more information click on the corresponding icon

PILLAR ONE: INTEGRITY

In the face of increasing misinformation and corruption, integrity is integral for business. It is essential to maintain trust and moral responsibility within your organisation. Consumer trends in the UK indicate that spending through companies which consumers viewed as having ‘honest and strong moral principles’ increased by nearly 50% between 2013 and 2020. This trend will continue.

Integrity influences almost every party you work with. It can nurture positive and long-lasting relationships with suppliers and increase employee morale and productivity.

Integrity consists of:
• Corporate Values
• Trust
• Transparency
• Operational Standards
• Business Relationships

PILLAR TWO: EQUALITY

Legal policies for equal opportunities and conduct protect your organisation from the risk of employee discrimination. Equality benefits your bottom line but also your employee retention and corporate reputation. Employees are among a firm’s biggest potential advocates, and if they are not happy, they spread the word.

Studies show that companies that underperform on their commitment to equality, are almost 30% more likely to underperform on profitability (McKinsey), and that 70% of jobseekers want to work for a firm that actively promotes equality, diversity and inclusion.

Equality consists of:
• Gender
• Diversity
• Sexual Orientation
• Disability

PILLAR THREE: DIGITAL ETHICS

Today’s organisations must use data responsibly, in ways which are not intrusive, manipulative or disrespectful to others. It’s vital that you state your intentions regarding data usage and ensure those individuals involved have given their consent. Data breaches and unethical practices can severely damage your revenues and even your reputation. In contrast, managing data correctly can yield positive results. Companies with strong ethical credentials had 14.4% higher rates of market capitalization.

It’s not just how you use marketing channels and communication but the ethics of their engagement and endorsement – including guidance for employees as to how to use social media channels and maintaining customer confidentiality. Studies show that 9 out of 10 internet users would avoid doing business with companies that do not protect their privacy.

Also, a skills gap in digital remains in industry. Being recognised as purposeful and ethical is proven to be a major differentiator in the employment market.

Digital ethics consists of:
• Social Media
• Data Protection
• Confidentiality
• Trusting Communications

PILLAR FOUR: ACCOUNTABILITY

Having and holding accountability, responsibility and trustworthiness is a key element of business. As digital technology evolves and powers business operations, social data management and AI, decision-making engines is increasingly common. These automated processes create clear risks when it comes to accountability and use of information. For example, if a financial services company uses algorithms to make decisions normally taken by qualified, regulated professionals, who is accountable? The professionals or the machines?

A company must therefore ensure that corporate accountability is not neglected or avoided. That has a fair and equal pay policy for all employees regardless of gender and race, provides transparent financial and other reporting, has fair business agreements and policies and makes a positive contribution to charity and other worthy social causes.

Accountability consists of:
• Renumeration
• Reporting
• Investments
• Corporate contribution

PILLAR FIVE: RESPONSIBILITY

Corporate and Social Responsibility (CSR) bridges the gap between organisations and the societies they serve and exist in. It is visible in the policies put in place to support a commitment to positively impacting and preserving communities and the environment. Policies to surpass being simply economically viable, and become economically beneficial. Use CSR as a tool for management, communication, planning and business development while becoming more efficient with resources and making a positive contribution to Global causes.

ESG is a term used by the market and investors to represent the environmental, social and governance criteria against which they assess an organisation’s responsible practices. Sustainability is tightly connected to sustainable development; but while the first aims to maintain existing quality of life, the second wants to improve it. Focus on creating a system that works while protecting the environment and improving everyone’s lives.

Responsibility consists of:
• Corporate
• Social
• Environmental
• Governance

PILLAR SIX: ETHOS

Consumer expectations are changing. Purchase decisions are not only based on quality and affordability, but also factor in social, environmental and trustworthy practices. Organisations therefore need to adapt to deliver against these priorities and communicate it transparently and effectively. Business ethics are vital in a corporation. It involves its business practices, how they deal with customers and employees, profits, legal issues, communications and corporate conduct.

Accenture reports that consumers observe how companies position themselves in important issues. If they find an organisation which fits with their own views, they are more likely to engage with them. If there’s no match, 42% of consumers will step away and 21% will probably never come back. 70% of millennials carefully consider corporate values when making a purchase.

For working professionals ethics and values are extremely important and 71% would be willing to take a pay cut to work for a company that has a mission or values they believe in. 39% would leave their job if they were asked to do something unethical or which created a moral dilemma. Employees who believe in your corporate principles and conduct and share your values will be a huge asset.

Ethos consists of:
• Respect
• Employees
• Consumer Values
• Supply Chain
• Stakeholders
• Reflection

Applied

AE 1

AE 2

AE 3

AE 4

AE 5

AE 6