Authentic Business Ethics – for yesterday, today & tomorrow

Authentic Business Ethics – for yesterday, today & tomorrow

Ethics guide our behavior and ensure high standards, without them what else do we have?

Authentic business ethics is critical and should not be a tick the box exercise. Ourselves and our organisations will be judged on how we react when our ethics are challenged and potentially broken.

Ethics are cornerstone for yesterday, today & tomorrow.

Do you have a code of ethics?

Everyday we need to be living by our ethics. As a CIMA accountant it is part of my DNA. CIMA’s code of ethics supports my system of morals and guides my interactions and decision making. Breaking this code has serious consequences. 

A code of ethics is not a document to hide behind when things get difficult. It is a code to hold up proudly all of the time.

It proclaims you uphold the highest ethical and professional standards. Be proud of your ethics.

Have a look at CIMA’s code of ethics; it is relevant for anyone in business not just accountants.

This code is based on five fundamental principles.

  • Integrity
  • Objectivity
  • Professional competence and due care
  • Confidentiality
  • Professional behavior
CIMA code of ethics
Chartered Institute of Management Accountants – Code of Ethics

Business ethics

Ethics in business is nothing new. In fact it has been around since the time of bartering with ‘justice being the exchange of equals for equals”. The term ‘Business ethics’ only came into common language in the 1970’s in the US during anti big-business protests.

After numerous scandals business ethics have now been enshrined into law. These can be seen in all areas from environment regulation, minimum wage, tax rules, insider trading to fair work regulations. 

Ethics are critical for business

Upholding authentic business ethics will bring many benefits to an organisation and to you. An organisation being run with a foundation of ethical behavior will see long lasting positive effects. These benefits range from attracting the best people and retaining them, to having a reputation in the community which will continue to support growth.

For you it will ensure better decisions based on principles which will drive productivity and your morale. It has been documented that employees who work in an environment that demands high ethics perform their role at a high level and are more likely to stay loyal to that organisation.

What to do if challenged

We will all go through moments in our lives where our ethics, system of morals are challenged. What we do with this knowledge as it will stay with us forever. It is important to take some steps to guide your actions.

1 – Identify

If feels awful when your ethics are challenged. Figuring out where to turn to and what to do can be confronting.

As a first step it is critical to figure out whether it is a simple misunderstanding, bad communication or something real. Importantly, do not ignore your concerns, you must have them reconciled.

Take the time to check your understanding of the situation and clarify the facts. Be certain about what has been said or done. For example, if concern comes up in a conversation ask for clarity as soon as you can. If it is something you have seen or been part of with others, talk to each other to gauge opinions.

If you feel comfortable, talk to your manager.

2 – Evaluate

Once it has been identified there is a breach, evaluate what the potential impact is. Is this a breach in expense claim submissions or a manufacturing quality issue, which both have different impacts. Have you been requested to do something, ignore something or create something that would have a material impact on reported numbers.

You need to spend some time to evaluate the impact of the apparent breach of ethics. The actions taken on an expense claim is far different from a breach in reporting standards.

3 – Act

Now you know there is a breach and what the impact is. It is time for you to take action to mitigate the risk and address the consequences as soon as possible. Correcting the problem can look very different depending on what the breach has been. 

Maybe you need to cancel an expense claim, stop a manufacturing process or close an administration loophole. You potentially will need to take action to stop a fraud or some other crime being committed. Whatever it may be, you will need to determine if you need to report the breach and how far up the chain.

Continue to talk to those your trust and get the advice you need. You do not need to do this alone. (reference the tip below of who else you can contact)

A breach may require education on policies instead of reporting. If it is serious your manager should assist you to communicate the breach to superiors who should support the required action.

Ethics a key building block of all organisations
Ethics a key building block of all organisations

As professionals it is our duty to call out concerns. 

There should be no retribution for highlighting your concern. Personally, I would be proud of team members who call out concerns so we can tackle them, fix them and prevent them.

Building organisation trust is important in a business that wants to drive high standards and a high performing environment.

** if you have witnessed or become aware of unethical behaviour which has an immediate impact on life – do not delay – take action. Report to your manager or through your organisation’s reporting structure.

Top tips

Speak up:

If you have real concerns you must speak up. Any organisation worth its position in society should welcome you highlighting your concerns in the appropriate way. If they rally against you then they may not be the organisation you thought they were. 

Code of conduct:

Just having a written code of conduct is not good enough. You and the organisation’s leadership must live it. Your actions will speak a lot louder than words. 

Documentation:

A healthy habit to have is rigorous note taking and documentation. Take note of the substance of the issue, the details of any discussions, the decisions made, and the rationale for those decisions.

When you have a concern of a breach of ethics it is important to protect yourself and the organisation. Top tip – documentation is your friend. 

Reporting or getting advice?

At all of the stages above you may find yourself needing to reach out to, potentially on an anonymous basis if necessary, with:

  • Others within the organisation
  • Those in-charge of governance
  • A professional body
  • A regulatory body
  • Legal Counsel