As an ethics speaker, ethics consultant and author, I am well aware that terms such as corporate social responsibility and business ethics are all too often tossed about as you might toss around an advertising slogan.
Can business and ethics be combined? Yes, but the topic needs to be examined before making a feel-good business ethics statement. Ivan Serrano, writing for the Startup magazine (July 15, 2021) noted:
“There is no real definition of what an ethical business is. This lack of agreement on what constitutes an ethical business has led to a proliferation of interpretations of the term.”
I might go even further, and say that when I hear an executive ask that question – or worse, ask the question in an amused and cynical way, I already have a fairly good idea that their business isn’t.
Yet, no one I have ever spoken with would want their business viewed as being unethical. Corporate social responsibility, especially coming out of the pandemic, is now viewed as highly important.
Can business and ethics be combined? If so, how?
To seriously answer that question, especially as an ethics consultant and ethics keynote speaker who has literally addressed thousands of organizations on ethical behavior, I would offer five points to consider in creating an ethical business – and why it should be done.
- Combine business and ethics by being transparent. Some businesses operate in what I would call a hypocritical ethical mode. For example, a company might talk of quality and then cut corners to cheapen the product or they will talk about equity, diversity and inclusion and do almost nothing to promote the culture. Be transparent, not only with thought, but in actual deed. Make no statements that aren’t true. Follow through on intention. For example, if a company is committed to EDI, be fully committed. Explain actions. Do the right thing. Customers will appreciate it.
- Combine business and ethics as its own marketing tool. In numerous studies it has been found that an ethical business enjoys a better reputation than an unethical business. If, for example, the cost of a product must be reduced, explain what is being done. A few years ago, a company I knew of in the food industry substituted an organic ingredient with a cheaper ingredient. Their costs were lowered. However, a whistleblower emerged and put the news out on social media. This cost the company a devastating loss of business. Far better than to raise the price and explain why in detail.
- Combining business and ethics helps attract and keep the best talent. “Business ethics” may elicit cynicism among certain executives but rest assured it is extremely important to employees. In numerous surveys it has been found that well over 90 percent of employees seek ethical companies and most will recommend their workplace to friends and associates. In an era where there have been “Great Resignations,” in companies where business and ethics co-exist, better talent is retained and attracted.
- Combining business and ethics limits legal risks. In my work as an ethics author, ethics blogger and keynote speaker, I have written about hundreds of businesses, who combined, were fined in the billions of dollars plus jail sentences, because they were unethical. In no situation has any entity wished it could have been more unethical. Every one of those companies had convinced themselves “they could get away with it.” None were ever quite the same. Limit legal risks by combining business and ethics.
- Combining business and ethics has a ripple effect. Whether operating in a town or globally or measuring the effect on an industry or multiple industries, by whatever parameters ethical companies have an influence far beyond the company itself. The ripple effect does not flow in one direction, but back to the organization.
Considering the future
Ethical behavior is here to stay. Millennials and “Zoomers” understand that companies who pollute or discriminate or cheat in a myriad of ways, have been emblematic of all that is wrong with “for profit” organizations.
Business is finally at a long-awaited crossroads. By combining a high sense of corporate and social ethics with a reasonable desire to build a great company, we can create entities far beyond what we have now.
I, for one, look forward to the possibilities.
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