adminpredictable business practices benchmarked on global standards and best practices.
The corporate community in the country has since the turn of the century been through a difficult period characterised by scandals of all sorts and a widespread breakdown of ethical ways of doing business.
Corporate governance challenges in the financial services sector, bribery and corruption in public institutions, fraud, and other corporate misdemeanours today continue to hog the limelight, diminishing the trust and confidence of many people in the country’s ability to move itself forward.
Unethical behaviours are in their very nature corrosive, and have the capacity to destroy whole economies.
They discourage hard work, and degrade productivity and competitiveness. They weaken the bonds of trust and integrity resulting in the degrading of the lives of the citizenry and a situation where a society is defined by mediocrity.
Corporate governance today continues to be a huge challenge in the country, more so as we continue to witness organisations that go for years and years without renewing their boards.
We are also still seeing boards that are appointed on the basis of mere personal allegiance and friendship without any regard for merit and compet- ence.
We have boards that continuously recycle what has apparently become “dead wood”, with some of these arrogantly claiming to be governance pundits who do not need to be lectured on corporate governance, never mind the apparent rot in their organisations.
Refreshingly, what has become crystal clear in the minds of those who see value in renewing and updating their governance structures is the role played by ethics as the unavoidable foundation upon which sound corporate governance processes can be built.
Because corporate governance is about rules, and ethics about values, these pragmatic leaders now understand that implemented governance rules and regulations will remain in force for as long as they are not supported by a strong ethical underpinning.
This means that corporations must have robust ethics-inspired governance processes in their structures.
Apparently, the King III Report articulates this paradigm quite well obviously having learnt from the inadequacies of the King I and II reports, which have marginal coverage of ethics.
An ethical foundation in corporate governance is critical because it helps to build a governance model that will thrive even in difficult situations such as the business environment obtaining in the country.
Ethics is surely the pillar for growing an enduring governance and risk management framework as it intrinsically shapes the behaviour of every member in the organisation.
An ethical thrust with observable board oversight helps to curtail the propensity by some in leadership positions to indulge in clandestine deals that destroy the well being of the organisation.
Embedding ethics in business operations goes beyond merely mentioning ethics in the governance policy document.
Instead, it entails leaders making a deliberate effort to unlock value in that policy document by asking themselves tough questions such as whether there are formal ethics management process in the organisation?
Have we assigned someone to perform the duties of an ethics officer? Do we have a help-line to assist employees report observed misconduct and seek help on ethical issues?
Is our ethics programme embedded in the performance management system of the organisation?
Do we reward ethical behaviour and sanction unethical behaviour? Do we monitor, evaluate and audit our ethics performance to ensure its impacting the bottom line?
Globally, companies have now moved towards building ethics measurements into employee performance objectives as a way of cementing ethics governance processes.
The resultant ethics performance metrics and competencies are then used to consider staff for promotion, salary increases, and to inform decisions on all other key personnel issues.
Effective ethics management means genuinely ingraining values management into the DNA of the company’s business operations, including its policies and procedures.
Corporate governance structures that are leveraged on an ethical foundation guarantee responsible business conduct.
Through ethical leadership, it becomes clear to all and sundry that the organisation does not, and can no longer let the misdeeds of a few individuals destroy the well-being of the organisation.
Corporate leaders must understand that societies are dependent on the success of businesses for wealth creation, jobs and the people’s livelihoods, and this calls for strong ethical leadership.
Governance rules cannot simply be written to address every possible breakdown in ethical behaviour, and imposing more governance rules without a strong thrust on ethics will not grow ethical behaviour either.
Rather, it is when leaders ethically position themselves, and make a deliberate effort to embed ethics management processes in company operations that ethical cultures are built to form the basis for good corporate governance.
Good governance is driven by sound ethical performance. Real and lasting governance imperatives can become a reality only when leaders foster a genuine commitment to grow ethical behaviour right across all staff levels in the organisation starting with the board itself.
When leaders embrace ethical leadership as the basis for good governance, they become good communicators of ethics to staff 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 all staff levels.
In today’s highly competitive global business environment ethical leadership is emerging as a key competency for effective executives and managers.
The high standards of ethical behaviour leaders are expected to exhibit are not simply a matter of good morality that is a result of one’s good upbringing.
Ethical leadership goes beyond morality to anchor on the acquisition of ethical leadership skills through regular executive ethics training.
Corporate leaders must understand that it is commitment to practicable ethics that makes all the difference, not simply a corporate governance statement.
The best-written sets of governance principles are bound to fail if ethical leadership is given a lip service.
Corporate leaders must build in their organisations ethical cultures that help create unique brands that become sources of competitive advantage.
Globally, a company’s Ethical Leadership Quotient (EQL) is now a key indicator for its bottom line success and sustainability.
- Bradwell Mhonderwa is an Ethics Coach and Trainer with the Business Ethics Centre. Send feedback to [email protected],or visit www.businessethicscentre.co.zw, or call 0772913875
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