What drives business to behave ethically?

Rick KellerGuest post from Rick Keller, Executive Coach.  His company, The Healthy Business Doctor, consults with entrepreneurs, Florida firms, state and city governments, and Fortune 500 companies.

Surveys come and go. Few make a lasting impact on our consciousness or actual working practices. When it comes to understanding what makes business behave ethically, one stands out as providing sustained, still relevant insights.

The American Management Association’s HRI Global Ethics Survey from 2005 [1] helped identify and understand the real influences on business ethics in organizations.


Even today, one can look back at this heavy weight tome and realise it created a paradigm shift in highlighting the drivers of business ethical behaviours.

For example, our present knowledge that an organization’s culture and its leadership are critical ethical drivers proved seminal.

The top two ways to ensure an ethical corporate culture are: leaders must actively support and model ethical behaviours; consistently communicating ethics messages via the business culture.

Since that report many organisations have assessed and analysed the strength of their company’s ethical cultures and their leadership effectiveness. Numerous formalised indices such as the World’s Most Ethical Companies have emerged. They provide important baselines against which to judge ethicality.

For those who lead companies though, there are at least four essential steps to keep in mind:

  1. Listen to employee Feedback. Be prepared to listen to this and be willing to re-examine leadership’s
    actions and strategies in light of these concerns[spacer height=”20px”]
  2. Hold face-to-face meetings. Hold these throughout the organization and meet directly with employees. In so many organisations it remains rare to have face‐to‐face communications with senior management.The tendency is to use samples of meetings with employees who represent the demographics of the entire employee population.[spacer height=”20px”]This is simply not good enough these days.[spacer height=”20px”]To be trusted and engaged on the topic of ethics, leadership needs to be seen to listen to employees. Let them speak about how values play out at work, and about their own values, and how these intersect with the corporation’s principles/values.[spacer height=”20px”]When managers fail to communicate in this way, employees feel promises made to them are forgotten or ignored. The result is much reduced levels of trust, now widely apparent in so many companies.[spacer height=”20px”]
  3. Actively use Social Media.  Identify how efficiently the company and its leadership use corporate/ social media such as from newsletters, video-conferences, and web portals.These can help leaders more effectively communicate their message about corporate expectations of employee’s ethical behaviours.[spacer height=”20px”] Assess the exact nature of the messages being communicated and how often. Does each align with the company’s strategic plan, vision, goals and objectives?Or are the employees hearing about one set of ethical behaviours just for them, while seeing another set acted out by the company’s hierarchy?[spacer height=”20px”]
  4. Review early warning sign programs about unethical conduct. Leaders need to assure themselves all programs provide a measurable indicator of effectiveness and the processes holds people accountable.

To achieve this means working proactively with HR departments. Their assistance in developing ethical practices, policies, and metrics can ensure HR receives quick and unvarnished feedback from employees regarding possible ethical problems.

Even up to the board level leaders can openly communicate their support for the company’s ethics program. They can do this by taking the lead in sponsoring, attending and speaking to employees; and making sure managers take leadership development coursework that focuses on ethics and ethical behaviours.

The measure of successful ethics training for company leaders is simple and direct. It comes down to basic questions such as:

Is it well integrated into the company’s strategic plan? Does it align with every employee training and development campaign? Do leaders view the ethical training components in their own development programs as more than just window dressing? Finally, does leadership “walk-the-walk”, or just “talk-the-talk?”

Trying to measure ethics has its own set of challenges. Some programs have to be initiated simply because it’s the “right thing to do.”

As the philosopher Albert Camus stated, “A man without ethics is a wild beast loosed upon this world.”

[1] Rick Keller was a co-author of this report

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