'I didn't know anything about wrongdoing and incompetence. I'm just the MD!'

As the seemingly endless game of corporate reputational KerPlunk continues to play out in the media, Kate Russell, A.K.A the HR Headmistress, explains how to create an ethical company

by Kate Russell
Last Updated: 28 Sep 2012

In Drop the Dead Donkey, ethics was described as a place to the north west of London. If you think that’s the case, move over Gus Hedges, there's a new idiot on the board.

But, if you have been depressed by the behaviour, whether you deem it pure incompetence, or unethical conduct, of Messrs Diamond, Buckles, Serwotka, Goodwin et al, remember that a few bad apples do not necessarily rot the whole barrel. The behaviour of all these individuals is distasteful, but bad news tends to sell paper a lot faster than tales of corporate do-gooders.

And these people do exist. At the heart of many businesses, especially SMEs, are leaders who want to to the right thing. And not just for purely altruistic reasons. A corporate culture in which the integrity of the culture is clear to those inside and outside the organisation is good for business. It attracts customers and staff.

The Co-op is a well-known example. Over the years it has done a great deal to foster responsible ethical trading, including the Fairtrade range, animal welfare and eco products. It has also been certified as one of the top 100 companies in the the UK to work for... The two things are not unrelated.
 
So, how can other companies hope to safeguard and maintain their reputations?
 
The lesson has to start with the leader. Ethical conduct begins at the top of an organisation and trickles down. Do as I say, not as I do, rarely works in the business, or indeed in life. But once you've established yourself as an ethical leader, it's important then to focus on recruitment.

Ethics and cultural (as in business culture) fit are important and should be considered as part of the recruitment process. If you are known as an ethical organisation, there’s a degree of self-selection. The wrong 'round' people will be uncomfortable in a 'square' hole. For example, even if I had a job for Sharon Shoesmith (of Baby P scandal fame), she probably wouldn’t last long here (I can’t stand people who take the money but refuse to take personal accountability).

As a leader, you must take responsibility for your actions and your mistakes. According to the Oxford Dictionary, ethics are 'the moral principles that govern a person’s behaviour or the conducting of an activity'. Passing the buck definitely counts as 'immoral'.

At least it's getting harder to offload the blame onto others these days. It was quite refreshing to see the Select Committee examine Nick Buckles recently with such vigour. Simon Hoggart writing in The Guardian said he’s never seen anyone get such a pasting and he almost felt sorry for Mr Buckles – almost. Mr Hoggart summarised Mr Buckles’ remarks pithily: It had all come as a terrible surprise, said Mr Buckles, several years after the contract had been signed...

So, how do you build an ethical company? Focus on your personal ethics, and hone your recruitment process to focus on those who share your values. And, if you screw up, own up. Or you could end up like Buckles... 
 
Kate Russell is MD of Russell HR Consulting

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