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The only way is ethics... for the sustainable business of the future

Ethically dubious decisions have led to the downfall of presidents, banks and major corporations in recent years. Media moguls have been the profiteers as they have publicised their indiscretions to a shocked (but scandal-hungry) world.

The shoe was on the other foot a few weeks ago as James Murdoch was further grilled by the Culture Select Committee about what he knew and what he didn't and who was responsible in the NOTW phone hacking scandals. His father confessed his earlier Committee appearance was 'the humblest day' of his life. The hunters have become the hunted. Meanwhile, the Leveson Inquiry continues its painstaking work.

But before we gloat too much at the Murdochs' discomfort, can we be sure that our organisation isn't about to slide down its own ethically slippery slope? And where does responsibility lie to ensure this doesn't happen?

The question 'who is responsible?' could be simply answered: 'we all are!' It is easy to be complacent about how potentially vulnerable we are as individuals in this area. Can we say, hand on heart, that we consistently choose the ethically and morally defensible over the expedient and financially beneficial? We may not go as far as hacking into Millie Dowler's voicemail, but none of us are immune from making ethically questionable decisions that we would rather not see publicised. The glee of interrogating MP's that media moguls have been getting a good pasting has to be somewhat tempered by their own recent record on expenses.

Howard & Korver (2008) suggest we often go wrong, as individuals and as organisations, because of fuzzy ethical thinking. We often confuse the legal, ethical and prudential dimensions of an issue. We get an affirmative answer to the question: 'Is it legal?' or 'Is it following agreed company policy?' and we ignore the question 'Is it morally or ethically defensible?' in the eyes of our customers, our staff and the general public. This is perhaps where the MP's expenses issue went pear-shaped.

But there is a wider question of who is responsible for setting and maintaining ethical standards for the whole organisation. Not many have such a clear touchstone as my Islamic clients. With Islamic principles at their heart, a Shariah compliance committee is appointed to oversee financial, operational (and sometimes behavioural) activities to ensure they comply with the tenets of their faith. Some would argue against the practicality of such a watchdog in a multi-faith and no-faith environment. But somewhere, ethical standards need to be defined if an organisation is to protect itself from a potentially catastrophic ethical failure.

No function is immune from the temptation to sideline the ethical dimensions of its decisions. From procurement to product development to marketing to HR to Finance- all can be focussed on issues of legal compliance, expediency and profit over social responsibility.

Many professions will have their own ethical code of practice. The CIPD is set to publish a revised code for HR early in 2012. Having seen the final draft, I think it will be helpful - as far as it goes. But I believe that HR & OD professionals have an opportunity and a responsibility to go beyond a focus on their own professional code and to lead their whole organisation in this area.

Here are three areas in which I believe we can play a key role in helping our organisations behave ethically. We can:

  • Help define a socially and ethically desirable collective purpose for our organisations above and beyond the profit motive. Without an overarching touchstone that transcends profit, we can't hope to occupy the ethical high ground.
  • Encourage espoused values to be lived and not just laminated. We can do this by modelling them in our own practice, insisting that all senior managers do the same and ensuring that values-based action and behaviour is recognised and rewarded.
  • Equip managers with the mindset and skill-set to be able to make ethically sound decisions in their areas of responsibility, taking them beyond a focus on mere legal compliance.

Ongoing research at Roffey Park suggests there is significant room for improvement in all the above and we are aiming to publish a report on best practice in Spring 2012, including the mindset and skill-set of 'responsible' managers, to help strengthen organisations in these issues.

In conclusion, I believe that both the press standards issue and the fallout from the banking crisis has prompted a growing social movement - typified by the Occupy protests around the world. It's a movement that expects more from the big players in our society - that the moral and ethical dimensions of business must be given a much higher profile than they have had to date. I believe that HR & OD need to step up and lead on this issue.

For the sustainable business of the future, 'the only way is ethics'.

Adrian Lock (pictured), senior consultant at Roffey Park