Ethics in C-Suite Leadership

Albert Einstein said, “Relativity applies to physics, not ethics.”?

Integrity is doing the right thing, even if nobody is watching. The world out there is competitive and some call it cut-throat (taken too seriously), and of all the challenges the toughest one is being Ethical, showing Integrity and being compliant.

Being Ethical is not an option, it should be one of the core fundamental values. Its not just a corporate tagline, it’s a personal trademark that CXO’s across the world must possess by default. These values don’t change and has stood the test of time.?

The millennials want their leaders to be more ethical and responsible towards various subjects – Diversity, Equity and Inclusion, social and environment causes and various other subtle causes that influences the gross – the profit making.?

Few stats, reference from www.ethics.org: (and please visit the webpage for more information)

·???????69% of employees surveyed globally indicated that they trust that top management will keep their promises and commitments.

·???????76% of employees surveyed globally indicated that their supervisor gives them positive feedback when they do their work with integrity.

·???????84% of employees globally observed discrimination with following types: sex 66%, race 53%, age 50%, ethnicity 40%, religion 37%, disability 37%

·???????67% of employees surveyed globally indicated that their supervisor consistently holds employees accountable to their organization’s workplace ethics standards

?Profits – a social responsibility?

?From an economic point of view profits are a social responsibility as they are the driving force of business expansion. Growth of a business is beneficial to the community as it creates jobs and opportunities for skill development for its members. Here, we examine the importance of ethics in business practices. If making profits alone is beneficial to the community, do we need to stress on having an ethical framework??

If we look at profits as an economic purpose of a community, we need ethics ever more. The ethical identity of a business venture today, strengthens its brand. Ethical business practices are reassuring to all the stakeholders: employees, clients, consumers, investors, and NGOs. The direct impact of ethical practices is that employees are happier and will remain with the company for a longer period. They bring about structural stability to the company. Employee productivity is also promoted as it is easier to focus on work for a company that puts Ethics as one of its ways of doing business. Being Ethical should be business as usual.?

1.????Global companies recognize that ethics is the essence of business hence it is crucial to integrate ethical values in their businesses.

2.????Companies cannot survive in isolation; they need to act socially.

3.????Companies are no longer just competing for profit but also for reputation hence most of them are recruiting and training ethical employees.?

All Companies must develop a value system, an Ethical value legacy that takes up topic which ails the world, and apply the profits generated to enhance those value systems.?

The circumstances, the challenges, the conflict and how to overcome?

It all starts with circumstances that a leader faces in day-to-day business. The perception of standard of ethics may vary country from country due to cultural practices and historical ways of doing business. While Asia is more relationship bases, West may be more rule-based. How and where do you draw a line when you work in some of the most corrupted countries where managers face circumstances challenging ethical practices.?

???????????More than two-thirds of countries score below 50 in the Corruption Perceptions Index published by www.transparency.org. Do we decide to do or continue or exit in such countries? Its not an easy decision. Having said that high profile cases like Enron, Arthur Andersen, the unethical practices adopted by companies (collapse of Lehman Bros., AIG that led to economic crisis of 2008 costing tens of millions of people their savings, their jobs, and their homes, etc..), are by the way, cases that happened in countries having high scores in the index.?

???????????The lure of profit is difficult to ignore for many. The trap is set. This is when the business leaders are challenged and few falter. It becomes easy for Leaders to face such situation where there is an extensive guideline on Ethics and Compliance and regular update and training. There must be an understanding also of the cultural divide and ways of doing business. Learning from lessons, most of the companies now are focusing on Ethics and Compliance.?

Being Ethical is being right, there is nothing grey about it. Having certain codes as guidelines helps bring about a routine in place. All this creates a cog-work that results in effective implementation of business practices. The often-untapped potential of a company lies in the intrinsic motivation of employees. When the people that work with us know that they are part of a larger cause not just wealth creation of shareholders’, they work with their soul. It is important to assess on a regular basis the purpose of the people that make up the company to align it with the purpose of the company. Ethical attitudes nurture a sense of purpose which positively impacts productivity.?

According to the 2021 Global Business Ethics Survey, in 2020, 1 in 5 U.S. employees reported strong ethical practices at workplaces compared with 1 in 10 in 2000. This change over a decade indicates the general change in mindset towards business ethics by companies. It is clear that more and more companies are choosing an identity which is guided by strong ethical values. The motivation behind this shift is businesses have realized that sustainable profits are possible only when they function with a sense of responsibility. That they have a set of values that they abide by and implement in practical and realizable forms. According to a study conducted by LRN (2015), the majority of workers (94%) defined ethical practices as ‘critical’ or ‘important’. 82% would choose less compensation over loose ethics.?

TOP FDI Countries with high corruption risks?

Nearly half of the world’s investment hotspots score poorly in corruption perception.

More than 40% of the world’s biggest recipients of greenfield foreign direct investment (FDI) score poorly in Transparency International’s latest corruption perception index (CPI), laying bare the complex relationship between a clean business environment and investment attraction. ?

Of the top 50 countries for foreign investment, based on fDi Markets data since 2003, 21 score in the lower half of the CPI risk spectrum including Brazil, Russia, India, China, South Africa, Mexico, Turkey and Vietnam.?

For further reading on this: https://www.fdiintelligence.com/article/80703?