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Setting the tone from the top

August 1st, 2016 by Fiona Hotston Moore – Partner

A recent report from the Chartered Institute of Internal Auditors has highlighted that only 23% of FTSE100 companies provide their shareholders with any evidence that they are taking the issue of ethical standards seriously.  This is despite nearly all of them stating in their annual reports a clear commitment to high ethical standards.

I would suggest that many business leaders appear to confuse ethics and compliance.  Ticking boxes doesn’t make for better corporate citizens.  Formal regulation can only go so far and if we were to include everything we would have a list of unimaginable length to tick.

Surely, a business’s behaviour should be governed by something greater than just rule books and regulations?  Good behaviour needs to go beyond compliance.  There needs to be a moral driver for good behaviour that represents the soul of the company and, of course, it’s leaders. 

Frank Bucaro (an American business ethicist) asked business leaders to rank deterrents to corrupt business behaviour.  Worryingly, out of eight reasons the highest rated deterrents involved elements of punishment or risk with ethical behaviour coming in at a pitiful six.  Is this a sad reflection of human motivation or just a massive oversight on the part of business leaders who consider the subject of such little interest that it doesn’t need to be communicated?

Ethics cannot be an afterthought as businesses do not operate in a bubble.  They operate within a wider society and need to do more than simply leave their marketing teams to speak out for good causes.  

Sadly, there still appears to be a mismatch between how businesses present themselves to the public and how they behave.  And, I believe, this is down to business leaders to put right.  At a very basic level ethics is quite simply about ‘doing the right thing’ and this is about individuals and their values. 
Good business leaders will bring good values to a company and diffuse those throughout the organisation – setting the tone from the top.


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