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Ethics in Companies
   In today’s lecture, the key issue we are going to discuss is ethics in companies. I’d like to talk about, in the first place, the importance of ethics in today’s business world. Well, in the old days measuring company performance was simply a case of looking at turnover, profits and dividends. However, the last few years have seen environmental and ethical issues move to be the forefront of public concern and resulted in a closer scrutiny of a company’s performance of ethics.
   Today globalization is allowing companies to source from even greater distances. This enables a company to exploit the economic advantages of low labour costs in one country and high market value in another. Of course, they have to be careful not to be seen to be exploiting the workers. Consumers are becoming even more sensitive to the exploitation stories and indeed environmental issues. This is because as consumers become richer and become used to spending more on a product, they also feel that they should be spending ethically. This is backed up by media stories and press items, and exploitation stories receive very good press. And of course, they can cause great damage.
   As the government has been slow to respond to the increasing importance of ethics, companies have been forced to address the subject themselves and realign their own management policies accordingly. These policies will determine how a company conducts all aspects of its business, from dealing with clients to reporting to shareholders.
   Then, I shall provide you a know-how pack of how to perform ethically. Figures show that more and more companies are now reporting their ethical performance and it’s clear I think that companies now have to address the issue of ensuring ethical behaviour amongst their staff.
   To begin with, awareness is the key. The company needs to set out an official code of ethical practice and ensure that all employees have access to it and can understand it easily. The company then needs to implement an effective and anonymous system of reporting any breaches of this code. Once these procedures are in place, the company can then benchmark its ethical practice against those of industry leaders and see how it’s doing. I think it’s also vital that companies ensure that their senior managers set a good example, "walk the talk", so to speak. If they don’t behave ethically why should staff do? And finally, the company needs to put ethics high on the training and staff development agenda. It needs to make staff understand why ethics is important not just to the company but also to them as well.
   Now, I will move on to discuss the main issue of making companies turn to ethics for competitive advantage.
   By setting themselves up as ethical, however, companies are not so much promoting the importance of ethical conduct, the well-being of the local community or the development of society as a whole, as engaging in a powerful marketing to attract both discerning clients and bright young recruits. In today’s markets, any company without a coherent ethics policy is in danger of surrendering a competitive advantage to its rivals.
   In order to develop an ethical code of conduct, companies will have to deal with issues such as the legal implications of their disciplinary measures and the effect any new procedures will have on employees. However, new policies can only be developed once the company has identified the core values that underpin its day -to-day operations. Without a clear understanding of these values, it is impossible to develop a code of conduct compatible with the company’s culture. An effective code will dictate how employees approach conflicts and other stressful dilemmas not covered by the normal terms and conditions of employment. It will provide employees with a clear understanding of what behaviour is expected when they find themselves confronted with such dilemmas.
   Ethical procedures are particularly critical in times of crisis. Pay disputes, sexual harassment charges or cases of fraud, for example, can involve very complex issues that require careful decision-making and can have a very negative effect on staff morale. At such times it is crucial that companies act in an ethical manner. By doing so, they may not be able to avoid the potentially damaging publicity such cases inevitably attract; they will, however, be in a much stronger position to defend themselves in a court of law.
   The major obstacle which companies face, having established a code of conduct, is that of ensuring that each individual member of staff follows it. Some organizations simply distribute leaflets to all staff in the hope that they will read and act on them. Other companies take a more active approach and invite management gurus to hold seminars on the subject, which, while often highly entertaining, have little long-term impact. Although some companies now include ethics as part of their standard induction programme, it is widely accepted that this is not enough. The issue of ethics in the workplace is now of such importance that it needs to be incorporated into in-company development programmes for all employees, from the shop floor to the boardroom.
   With little sign of public concern abating, no organization can afford to ignore the subject of ethics in the workplace. In order to address the issue effectively, companies need to ensure that staff at all levels feel committed to the company and its values are motivated to transfer this commitment into ethical behaviour.
   Today, I have addressed three issues regarding ethics in company. The first is the importance of ethics in today’s world. The second is how to perform ethically in the companies. The last is the key issue, which concerns about the advantages of making companies more ethical in the fierce business competition. That’s all for today.