It opened up for me the perennial tension between the need for success and the requirement for companies to behave ethically towards stakeholders. In 1977, it was easy for me to see this as a simple question of greed versus good.
Today, the complex issue of the ethical behaviour of business is back in the spotlight, and HR professionals are - whether they like it or not - involved. But is it fair to expect HR to be the 'moral compass' of business? Is today's crisis of confidence in business ethics the true test of whether HR has any strategic influence over business strategy and corporate behaviour?
HR has always had an 'ethical stewardship' role. Most employment regulation, for example, is intended to set minimum standards of conduct that have at their core an ethical underpinning based on standards of decency and fairness. We all know managers who have an impatience with the 'restrictive rules' of HR. When this expresses itself as good-natured tussles over an appraisal rating, or a manager's desire to promote a favoured candidate without jumping through the 'hoops' of due process, it is all part of the landscape of modern HR practice. But when there is something more sinister and systemic going on in a business, what role can or should HR be playing in preventing or mitigating an ethical 'meltdown'? For me, there are three areas where HR would benefit from some soul-searching.
First is leadership development. Most large companies invest heavily in this and they know very well the kinds of competencies, behaviours and values that drive employee engagement and deliver high-performance working. Yet the process for appointing the most senior leaders can sometimes ignore all of this evidence and use criteria that can subvert or contradict the leadership principles used by the rest of the business. I am certainly not saying this always results in unethical decisions or behaviour, but it can often represent a point at which HR influence over good practice evaporates.
The second area is executive remuneration. I get very anxious about whether the deliberations of some remuneration committees are informed in any substantive way by the advice of HR specialists. The risks of bonuses or share options containing 'perverse' incentives or focusing on short-term gain or ignoring the wider principles of distributive justice within an organisation are well documented. HR faces a big challenge if it is to re-establish a credible and moderating influence here.
The third area is complicity through inaction. There have been organisations in the past where HR professionals must have seen systematic bad practice or turned a blind eye to unethical decisions, which have been driven by aggressive business targets or the clamour for survival. While these things are never clear-cut, I just wonder whether more willingness to speak out by some in HR roles might have had a mitigating effect.
As businesses enter a period of critical self-examination, it seems to me HR has one of its most potent opportunities to become a more confident 'moral compass' for CEOs.
This should not be about hand-wringing piety. It should be about helping business rediscover legitimacy and reasserting its positive impact on the society it serves.
Stephen Bevan (pictured) is director of the workforce effectiveness centre at The Work Foundation
