As a business ethics keynote speaker and as an ethics consultant, I am frequently asked in breakout conference sessions “Why is a code of ethics in business important?”
It is a valid question and one that is not only important but is necessary for a collective business reset.
For in this post-pandemic time, with inflation, supply-chain issues, social upheaval, and sadly, a lack of corporate social responsibility, to ignore a code of ethics in business, any business, association or government agency is potentially catastrophic.
The damage is real
In a recent article for Business News Daily, the author summarizes a recent psychological study by Notre Dame on workplace ethical behavior:
“Research from the University of Notre Dame finds that ethical business operations are highly important to success, while unethical behavior can negatively impact a business’s prospects.”
What we have always perceived to be true, has turned out to be true; that unethical behavior has consequences for future business, or as I frequently state as an ethics consultant and keynote speaker, is that every choice has a consequence. We also know that ethical workplace cultures can be nurtured and reinforced.
A survey by the employment website Glassdoor determined, “over 77% of adults across four countries (the United States, UK, France, Germany) would consider a company’s culture before applying for a job there, and 79% would consider a company’s mission and purpose before applying. Furthermore, over half of the 5000 respondents said that company culture is more important than salary when it comes to job satisfaction.”
Similarly, the same survey found that “73% of all adults would not apply to a company unless its values aligned with their own personal values.”
We can all, easily recall examples of unethical behavior displayed by companies in industries as diverse as pharmaceuticals, automobile manufacturing, banking, investing and healthcare. Many of these companies professed to be ethical, but at the end of the day, they lacked a code of ethics to guide them.
As an ethics consultant and ethics speaker, the questions I might ask of us all, is would you fully trust a vehicle purchased from an automobile manufacturer involved in a recent safety scandal? Would you feel comfortable buying groceries from a supermarket chain found to be intentionally gouging customers? Would you happily put your retirement funds with an investment firm under a fraud investigation? My guess is that you wouldn’t.
Whether intentionally or unintentionally, we shy away from organizations that have been found to be unethical. Surveys like the ones above, and many more, reinforce what we innately feel about unethical organizations: we would be afraid to work there; that their unethical culture might reflect on us and that in the overall scheme of things, the money they might offer us is not worth the loss of reputation we might get for working there.
In fact, if an unethical organization has values that conflict with ours, no matter how desperate we might be for a job, most of us would turn it down.
Shoe on the other foot
The code of ethics in business is often thought of as how our customers look at us. But, an equally fair question is: How do we think and view ourselves?
I know as an ethics speaker who has talked in front of hundreds of associations and hundreds of corporations that far too often, the written code of ethics is often posted online, in-print or re-stated in podcasts and such, but behind the scenes, the employees don’t embrace it.
Ethics training must be a living, breathing part of the company culture. If employees don’t believe what they’re saying, why should customers, vendors and others who must trust us? The code of ethics is important because it not only “tells the world,” what an organization believes, but as important, that we ethically believe in our purpose, our mission and our values. If they don’t align, a serious reset is needed.
