Written by
Changeboard Team

Published
09 Feb 2014

Show your moral mettle - Kai Peters, CEO of Ashridge Business School

09 Feb 2014 • by Changeboard Team

Ethics in business

Ethical practice in business is falling increasingly under the spotlight, and thanks to the internet and social media, we've entered an age of worldwide transparency.

There are real benefits for organisations that are seen to act in an ethical and socially responsible way.  For a start, customers are voting with their feet and choosing to spend their cash with businesses that show a strong social conscience. A track record of ethical behaviour is top of the list for investors when making decisions about where to allocate funds. And research has shown that young talent place high value on an organisation's moral backbone when deciding who to work for.

Leaders affect lives through their actions and decisions, so they have a responsibility to ensure their behaviour is ethical. Their role is to define the ethical compass for their organisation and set a clear example from the top for others to follow.

The most powerful leaders are those who lead as 'whole' people. Sheikh Zayed bin Sultan Al Nahyan, founder of the UAE, is widely recognised for applying his deeply held ideals to policy. Nelson Mandela is another example of an outstanding role model who does not separate his values and principles from his actions.

Can ethics be taught?

Evidence from many psychological studies shows that it is possible to influence awareness of ethical issues and help managers develop sound reasoning processes to guide their decisions. This isn’t about giving people a set of hard and fast rules, it’s about providing opportunities for dialogue.

Of course, discussing morals will never make the seven sins disappear. What teaching ethics can do, however, is help as many people as possible to make thoughtful decisions.

Educational interventions can also help managers develop a better understanding of the stumbling blocks that get in the way of ethical behaviour. Research has shown, for example, that bottom line mentality, organisational influences, fear and peer pressure are the four dominant barriers.

Integrity blockers

Fear can cause people to stay silent when they know they should speak out. They may be unhappy with the way the company is operating but frightened of losing their position if they become vocal.

In-depth personal development can help managers cope with these dilemmas. It can heighten self-awareness, giving them a clear understanding of their personal values so that they are in a better position to stand their ground.

It can help them learn how to ‘self-govern', think critically about how to respond to challenges, and result in a support network they can turn to for ethical guidance.

Business schools don’t just have a role in helping leaders develop a personal blueprint to guide their ethical behaviour – they have a responsibility.

Leadership is no longer just about maximising shareholder value. Those at the helm of organisations need the ability to transform cultures where malpractice, dishonesty and distortion have been allowed to fester and to shift the focus to ‘doing well by doing good’.