Do the right thing

Leaders anxious to discourage skiving, pilfering and scamming at work should first examine their own behaviour and ethics, says Richard Reeves.

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Last Updated: 31 Aug 2010

Forget politics, religion, Celebrity Love Island or even football. There is a bigger issue sundering the nation: is it acceptable to take pens home from work? Forty-nine per cent say no; 49% say yes. Text us with your answer ... And pen-pilfering is not the only weighty ethical issue that divides us. Posting personal letters from work, making personal phone calls and using company petrol for private travel all separate us into two clear camps of Angels and Devils.

It seems as if the Angels have the upper hand, according to the latest survey - entitled Ethics at Work - from MT and the Institute for Business Ethics. And in gender terms, women outperform the men. Only personal phone calls finds favour with more than half the workforce - all the other 'minor' misdemeanours received majority disapproval. And it has to be said that in a world where people work from home, it is not clear that the pen should be checked in as they leave the office anyway.

Nonetheless, the place of ethics at work, and in business more generally, is an issue that is moving up the agenda. On the one hand, more firms (half our sample) are providing training in ethics, more firms are appointing ethics officers, and corporate social responsibility is being taken more seriously, not only in the boardroom but on the shop floor. Two-thirds of workers believe their firm lives up to its 'stated policy in corporate social responsibility' (which may, of course, say more about the statement than the reality).

On the other hand, the business world has been racked by a series of crises, resulting in an across-the-board drop in trust. After Enron and WorldCom, the withdrawal from occupational pensions of UK firms, and even those boardroom high-jinks at Boeing, few people see business as a deep well of ethical thought and practice. And although employees remain pretty puritan in their views about skiving, pilfering and scamming, an increasing number of firms are introducing surveillance systems such as CCTV, swipe cards and random drug tests to control their behaviour.

'There is no doubt that there has been an increase in surveillance,' says Norman Bowie, Andersen Professor of Business Responsibility at the University of Minnesota and the world's leading business ethicist. 'What does this mean? It signals a breakdown of trust among corporate stakeholders, and especially between employers and employees.'

The danger, as Bowie points out, is that managing in this way can be a self-fulfilling prophecy: people who are treated as not being trustworthy end up behaving in a less trustworthy fashion. The survey, conducted by Mori, suggests that UK workers are becoming more honest in their behaviour, but all too often it seems their bosses fail to believe them.

Nor is it always easy to cry foul. Although one in four of the sample were aware of at least some dishonest or fraudulent practices at work, only a quarter of these had blown the whistle. It is not fear of the boss that strikes deepest, however, but fear of friends. The top reasons given for not blowing the whistle were 'feeling I might alienate myself from my colleagues' (21%), 'it's none of my business' (19%) and 'feeling it might jeopardise my job' (13%). Pressure from above may be real, but pressure from peers cannot be discounted either.

At the same time, the pressures of business life clearly test the personal morality of all individuals, at all levels of the organisation. One in five of those surveyed said they at least sometimes felt under duress from colleagues or managers to compromise the organisation's standards of ethical business conduct in order to achieve business goals.

It is inevitable that sometimes there will be a tension between a business' obligation to be ethical and its desire to be financially successful: the question is how these conflicts are dealt with. Given the general opprobrium felt towards some of the more modest corporate crimes, it is perhaps surprising that only three-quarters of the managers in our survey disagreed with the statement 'It is acceptable to artificially increase profits in the books so long as no money is stolen'. Tell that to the workers who lose their pensions when the scheme unravels.

It is commonplace to say that all employees are equal in the creation of an ethical business. It is also rubbish. The power wielded by CEOs, their capacity to make or ruin lives, means that they have a disproportionate ethical responsibility. Cooking the books or 'borrowing' from the pension fund is light years from the question of whether Jim is right to claim an extra £1.50 on his taxi fare. Maureen from accounts might smuggle out the odd ballpoint pen, she might even make a quick call to her mum, but she doesn't risk the livelihoods of thousands of people in so doing.

But it seems that an increase in high-profile scandals and more enforced transparency are having beneficial effects in the workplace, says Simon Webley, research director of the Institute of Business Ethics and co-author of the Ethics at Work report. 'Compared with the last survey five years ago, a higher proportion of managers say they are less aware of dishonest practices and think their organisations live up to their ethical standards. However, it is of concern that a significantly larger proportion of managers say they would tolerate some fiddling and pilfering.'

In order for business leaders to win back the trust they have lost, ethics must be more than a quick bolt-on or a new-fangled job title. It has to go to the heart of the way in which they create wealth, and why. 'I have had a few business leaders come to me and ask how they can restore trust,' says Bowie. 'We've had four years of apparently unending scandals, which do seem to have had an impact.'

Bowie brings his American MBA students to Europe to hear a different, more positive story about the purpose of business. But all is not rosy even on this side of the pond. Levels of trust in business leaders are in free fall, both among the general public and employees. 'The days when the MBA was a master of the universe and the CEO was king are over - clearly, they have now been knocked firmly off their pedestal.'

What course should concerned business leaders follow? One option is to begin with themselves, with their own behaviour and values. This is certainly the message of new-age gurus such as Deepak Chopra. Speaking at a 'Be the Change' event in London earlier this year, Chopra said that the sources of wealth-creation were moving from knowledge to wisdom - and that leaders able to examine their own motives properly would be the most successful in the future. 'This shift in consciousness is the one single reality that affects all other realities,' he said.

Ray Anderson, who turned Interface Carpets into an environmental beacon, takes the similarly individualist view that ethics starts at home. 'Brighten the corner where you are' is how he puts it.

But shadowing the debate about ethics - from the new-age versions to the MBA modules - is the looming reality of TBC (the business case). Anderson is dismissive of those who suggest that the business case for being greener than Greenpeace is not always self-evident. 'I prefer to turn the question round. Where's the business case for double-glazing the planet? Or for destroying the coral reefs?'

The trouble is that there is an eminently reasonable business case for both these activities if your timeframe is measured in decades. Earlier this year, a group of business leaders on a taskforce on climate change, led by Sir Stuart Hampson, chairman of John Lewis, suggested that the Government and business were stuck in a vicious circle, with businesses unable to act aggressively on climate change without losing ground to less green competitors, and the Government reluctant to legislate for fear of alienating business. The message was: we will compete within the framework you establish with law and regulation. If you want greener business, make us do it. For an individual business, the case for more ethical behaviour will almost always be limited - even if, collectively, we all stand to gain.

And once the rules are established, there is a strong belief among most business people that the game should be played accordingly. 'It is true that most business leaders will look for the win-win where responsible behaviour brings business benefits,' says Bowie. 'But the vast majority will also say that it is plain wrong to doctor the books to inflate performance - that you should do the right thing, even if it hurts the business.'

If neither inner enlightenment nor a clear business case is sufficient to drive ethical behaviour, a third route is compliance. This is the US route, based on legislation and regulation. The tightening of regulation - especially Sarbannes-Oxley - has put the need for clear ethical frameworks, training and responsibility centre-stage.

At the same time, the structure of sentencing policy has driven the appointment of 'ethics officers' and fuelled a boom in business ethics training. If an executive ends up in the dock for corporate wrongdoing, he or she will get a shorter time in the nick if they can demonstrate that they have hired an ethics officer and rolled out courses across the firm.

'As a compliance tool, firms are more or less obliged to have an ethics officer,' says Bowie. 'What I would say is that it should go way beyond compliance. What you need is a leader, a Warren Buffett type, a CEO who embodies an ethics culture.'

In the UK, too, ethics is also in the process of professionalisation, although driven more by a richer view of corporate social responsibility than by compliance and law. In the survey, two-thirds said that their company had written standards of business conduct - a further 10% were uncertain. Half provide an anonymous mechanism for reporting misconduct; and nearly half said their firm offered an advice or information helpline on behaving ethically at work. Fifty per cent said their firm provided ethics training.

The upside of these policies is clear - making the standards transparent and the support systems accessible. But there are dangers in the professionalisation of ethics, too. If ethics becomes just a matter of following rules and of understanding systems, there is a danger that the intuitive bases of ethical conduct will become clouded and ignored.

In his polemic Alone Again: Ethics After Certainty, sociologist Zygmunt Bauman suggests that modern business practices take the emotion out of decision-making and that the role of a person's conscience is thereby eroded. 'Conscience may tell that the action one was told to take is wrong - even if it is procedurally correct,' he says.

Bauman goes further and speculates that the introduction of rules - which is lauded as an advance by most business ethicists - may undermine the very basis on which good ethical decisions are made. Using a set of rules for ethical behaviour amounts to what he calls 'floating responsibility', in which the actions of an individual are justifiable against bureaucratic benchmarks.

'Providing that the member of the organisation followed the rules faithfully and did what the proper superiors told him to do, it is not he who bears responsibility for whatever effect his action may have had on its objects ... It seems that the organisation is ruled by nobody - that is, it is moved only by the impersonal logic of self-propelling principles.'

Turning ethics into a box-ticking exercise is not a risk-free approach. Similarly, training for ethics has to be handled carefully. A sceptical philosopher might regard ethics training as an oxymoron; as the basis for right action, it is hard to see how it can be taught.

'There is a danger that training is everything you were taught in kindergarten,' says Bowie. 'Don't lie, cheat or steal. On the other hand, there is a technical aspect to good training that can be important - for example, what is a conflict of interest and how do you deal with it? But there is no question that employees are sceptical about why they have to undergo the training.'

In the UK, however, half of those who had received training in ethics said it had proved 'fairly useful', and a further quarter found it 'very useful', suggesting that the training on offer meets some real needs.

But training in ethics is no substitute for leading by example - and 63% of respondents agreed that their manager 'set a good example of ethical business behaviour'. More than half said their line manager explained the importance of honesty and ethics in work.

It's clear that ethics is set to rise up the corporate agenda, and that UK firms are fortunate to have workforces that know the difference between right and wrong, and generally stay on the correct side of it. Training, helplines, policies, and ethics officers are likely to do more good than harm. But, ultimately, the creation of an ethical workplace rests on the behaviour and values of organisational leaders.

Ethics is, in the final analysis, about cultures, instincts and values, not rules. By and large, typical British workers are ready to sign up to a more ethical business future - even if they have 'borrowed' the pen from the office.

HONESTY STILL THE BEST POLICY?

64% agree that their manager sets them a good example of ethical business behaviour

43% of respondents think their organisation is always honest in its business practices

25% of respondents are aware of at least some dishonest or fraudulent practices at work - and 21% think the level of fraudulent or dishonest behaviour at work has got worse over the past five years

24% of respondents have blown the whistle on those responsible for fraud or dishonesty at work, and a further 25% have considered doing so

15% feel under pressure to compromise ethical standards in order to achieve business goals

10% of managers think it is acceptable to artificially increase profits so long as no money is stolen

3% of managers would give a clean reference to someone they knew had been involved in fraudulent activity

Source: Institute of Business Ethics/MT 'Ethics at Work Survey 2005'

ETHICS MAN, ETHICS WOMEN GENDER DIFFERENCES

(Proportion rating the following activities as acceptable)

Men Women

Taking work software home 20% 10%

Making personal calls at work 59% 56%

Surfing the net for pleasure in work time 25% 22%

Using company petrol for personal travel 29% 16%

Throwing a sickie after a big night out 17% 17%

 

Who's straightest public or private-sector staff?

(Proportion rating the following activities as acceptable)

Private Public

sector sector

Using company petrol for personal travel 28% 16%

Sending personal mail at work 38% 32%

Putting personal entertainment on expenses 10% 6%

Favouring family or friends when awarding contracts 16% 13%

Making personal calls at work 58% 60%

Source: Institute of Business Ethics/MT 'Ethics at Work Survey 2005'.

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