Ethics and culture in business

How to ensure ethical governance in business

Ethical standards are often referred to in the context of the policies within the organisation or something to do with external regulation or legislation. When CIMA talk about ethical standards, particularly in terms of our report Embedding Ethical Values, we refer to the governance aspect of business ethics.

One aspect we noted was that some organisations report on business ethics externally, including data on how many calls to whistle-blowing lines have been made and how much further these calls have gone.

I think this gives people confidence to speak up. Otherwise, people may not feel comfortable to report things as they don’t know if they are going to be listened to and whether what they say will change anything. Having that information to monitor oversights available to the board or the ethics committee is important.

Communicating that boards are taking ethical concerns seriously is something that is difficult to do. It is more a case of looking at previous issues and making examples of these cases. Of course, it is hard if people involved in previous cases are still working internally.

The focus should be on creating an environment where people are willing to speak up and there are discussions that happen regularly.

If you want to find the company with the best ethical procedures, find one that has had a big disaster because they have then had to put in place and address issues pretty quickly. These companies will be the kind of organisations engaging in integrity dialogues where managers will come in and speak with their employees about any problems and enable them to communicate freely.

Ethical values also come into effect on professional issues where management is aware of what is going on at certain levels but there is a separate reporting line in the corporate governance structure. They need to be able to see what is going on at the board level and report outwards.

It’s about making sure that businesses have strong reporting lines that aren’t going to be compromised.