(Post 4 of an ongoing series)
For this post, I want to reach back to the ancient days of 1993 and an interesting article from the Harvard Business Review entitled: What’s the matter with business ethics? As an ethics motivational speaker, business ethics consultant and book author, I draw upon as many business ethics and corporate social responsibility resources as possible. The HBR business ethics article, now 29-years-old, still has a great deal to teach us.
The author noted in regard to the boom of formal business ethics courses that:
“Over 500 business-ethics courses are currently taught on American campuses; fully 90% of the nation’s business schools now provide some kind of training in the area. There are more than 25 textbooks in the field and 3 academic journals dedicated to the topic. At least 16 business-ethics research centers are now in operation…”
The authors go on to explain that there was seemingly a disconnect. Though MBAs throughout America had exposure to business ethics, for the most part, the training was dismissed in practice.
What is Business Ethics and why is it important?
The article was obviously written in the pre-digital world when the business world was reputedly less sophisticated, less connected and a lot less “woke.” One would think that generationally, the frequency fraud and scandal would have declined as buzzwords such as corporate social responsibility were not only infused into courses and on-line tools but touted by cable news, social media and endless podcasts. They haven’t.
In fact, the same disconnect noted nearly 30-years-ago is still in place. Go to any search engine, and a working definition of business ethics is readily accessed. Whole generations of executives can frame their own answer to what ethics is and why is it important? At the same time, fraud and scandal, by any measure still plague the business scene. Pandemic or not, lockdown or not, fraud and scandal still abound.
In my in-person and virtual talks in my role as a business ethics motivational speaker, business ethics consultant and book author, I can easily elicit workable responses to the question of what is business ethics? Where audiences stumble is when I ask why is it important? In other words, all of the course materials taught over the years have typically failed to make an impact on the student and their organizations. In the years ahead, I can predict the failure to answer this question, will come back to haunt organizations.
Let me attempt to frame a different way of thinking about this problem by offering 5 initial observations on why business ethics is important.
- Every choice has a consequence. The ethical decision to commit fraud has never before plagued the business landscape as is occurring now. The SEC, IRS, DOJ, FBI and an entire alphabet soup of investigators are locked and loaded to pursue offenders. The tools available to fraudsters are doubly available to government agencies.
- Nothing is private. The internet, cell phones, imagery, social media and numerous investor activists are geared to discovery. When elements in an organization are poised to commit fraud, activists are committed to finding it.
- Reputation management. The decision to disregard business ethics is also a pronouncement to ruin the reputation of the organization. Of all of the business ethics consulting I do; I explain to my clients that a tainted reputation is the hardest of all consequences from which to recover.
- The environment. We have finally arrived in a place (thank goodness!) where environmental issues such as climate change, air quality or the health of the oceans are more than buzzwords to appear in the annual report. Why are business ethics important? To disregard the environment could potentially bring down any company.
- Social activism. In 1993, a relative handful of angry voices were outraged by issues such a racism, religious intolerance and gender issues. In 2022, the voices have reached a crescendo. Companies have a clear choice to practice equity or to get buried under a media and legal onslaught.
Corporate ethics is ultimately a mindset. The mindset is not taught in organizations, nor is it reinforced. If a substantive shift does not occur for companies, it will surely be shifted for them.
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