UK: Want to buy some business ethics, squire?

UK: Want to buy some business ethics, squire? - Ethically challenged companies be warned. Today's virtuous consumers want business to be good. Recent research by the Co-operative Wholesale Society says that three out of five consumers would boycott firms

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Last Updated: 31 Aug 2010

Ethically challenged companies be warned. Today's virtuous consumers want business to be good. Recent research by the Co-operative Wholesale Society says that three out of five consumers would boycott firms or stores with poor ethical standards. Helping the morally moribund is therefore proving a profitable niche for business schools and consultants. A gleaming ethical reputation is a highly valuable asset, but can it actually be taught?

Teaching individual employees to behave ethically is fraught with problems, insists Reverend Michael Roberts, principal of Westcott House Theological College. 'People can't be taught to act in an ethical way. Ethics are best learned by watching people be moral. In business, that means learning from the example set by management.' David Matthews, director of the London-based New Academy of Business, agrees, but believes 'business schools can do much to raise awareness of ethical issues and promote the agenda of socially enlightened business'. The academy offers a MA in responsibility in business practice where students debate real case studies with senior managers from leading UK companies and tackle problems in their own organisations.

'We help companies explore what their values are and increase awareness of those values,' says Matthews. Having explored their values, Stanley Kiaer, director of the Institute of Business Ethics, thinks a good starting point is to formalise their ethical policies in writing. 'At the basic level, this means drawing up a code of practice which provides all employees with guidelines on how to make decisions,' he says.

More than half of the UK's larger companies now boast such a written code. United Biscuits, for example, provides each employee with a 16-page booklet outlining the company's ethics and operating principles. 'This booklet informs each employee of the basic ground rules so that everyone who works here understands what is expected of them and what they can expect from their colleagues,' explains human resources director Chris Gebbie. Since 1970, staff at Shell have relied upon a Statement of General Business Principles (SGBP) for guidance. Managers who fail to work according to the SGBP face dismissal.

However, simply issuing a written code of ethics is no guarantee in itself of ethical behaviour, warns John Drummond, managing director of business ethics consultancy firm Integrity Works. 'Research in the US,' he insists, 'suggests that having a code on its own is less useful than having none at all. Codes are next to useless without a programme of training and communication to back them up. Managers must set the tone by example and by discussing both the general policy and individual issues with their employees. To create a culture of trust and integrity, employees need assurance that a blind eye won't be turned if someone lets the side down.

They need confidence that their organisation is matching action to rhetoric.'.

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