Ethics builds responsible businesses

Ethical cultures must anchor the development and practice of sound governance paradigms in today’s organisation.
Corporate governance is basically about rules and procedures and ethics is about values.

Corporate governance rules and regulations will remain ineffective for as long as they are not supported by strong ethical values.
The King III Report articulates this position very well having observed the shortcomings of King I and II whose coverage of ethics was brief and uninspiring.

An ethical foundation in corporate governance is decisive because it helps to build enduring corporate governance processes that thrive even in the most difficult of circumstances.

It is the rock upon which ethical businesses stand and ethics is the tower of strength which intrinsically police the behaviour of every leader including those in key positions.
An ethical culture provides a platform for staff members to raise the red flag where necessary and report unethical business practice. It helps to expose and isolate the “bad apples”.

Business ethics must be embedded in business strategy and embedding ethics in strategy goes beyond merely mentioning ethics in the corporate governance policy document.
It entails company leaders making a deliberate effort to unlock the ethical value in the policy document by asking tough questions such as; do we model ethical behaviour in the organisation?

Have we assigned someone to co-ordinate the ethics function? Do we have a helpline to assist employees report observed misconduct and seek help on ethical issues?
Have we embedded ethics in the reward management systems of the organisation?

Do we monitor, evaluate and audit ethics performance? Do we reward ethical behaviour and punish unethical behaviour?
Globally, companies are moving towards building business ethics performance indicators and measurements into employee performance objectives as a way of cementing the impact of ethics on the overall performance of the organisation.

The resultant ethics performance metrics and competencies are then used during promotions, salary increases and to inform decisions on all other key staff issues, thus sending a clear message to all and sundry that both job performance and ethics matters.

Corporate governance rules cannot simply be written to address every possible leadership moral breakdown and imposing more governance rules without creating a strong ethical culture will not grow responsible behaviour either. Rather, it is when leaders embrace ethics and make a deliberate effort to embed it in business operations that ethical cultures are built to form the basis for good corporate governance.

Real and lasting governance imperatives can become a reality only when leaders foster a genuine commitment to grow ethical behaviour right across the organisation.
When leaders embrace ethical leadership as the basis for good governance, they become good communicators of ethics to staff and all stakeholders through their deeds and actions.

Personal modelling of ethical behaviour, and exhibiting accountability and transparency in one’s dealings with the business of the organisation are visible elements that will ensure the leader’s positive tone reaches everyone in the organisation.

In today’s highly competitive global marketplace ethical leadership is emerging as a key competence for impactful business leaders and company executives.
Ethical leadership is not simply a matter of a good upbringing. Ethical leadership goes beyond morality to focus on the acquisition of ethical skills through regular ethical leadership training.

Corporate leaders must understand that it is commitment to practicable ethics that makes all the difference, not simply a corporate governance and ethics policy statement.
The best written set of corporate governance principles are bound to fail if ethics are given lip service or fail to get the seriousness they deserve. The Ethical Leadership

Quotient of an organisation is now a key indicator for business success on the global marketplace.
Companies must build ethical cultures that should anchor their governance processes and help to improve business competitiveness.

Bradwell Mhonderwa is an ethics coach and trainer with the Business Ethics Centre. Send feedback to [email protected] or call 0772 913 875