22 Apr Professional Integrity and Ethics – Part I

The first session of this year’s Afro Ant Young Achievers Programme was dedicated to exploring “Integrity & Ethics”[i] (20 February 2016). This review, split into two parts, continues with this critical theme, drawing on theoretical as well as applied / practical and current affairs sources.
Part I seeks to define the concepts of ‘Ethics’ and ‘Integrity’ and explores some of the benefits of business ethics.
Part II continues by exploring how to put ethical business and leadership into practice.

Ethical behaviour and integrity are widely recognised as valuable qualities, in the realms of both the personal and the professional, inspiring respect, trust, confidence and, inter alia, success. These qualities are expected in good leaders and in managers and executives in the business world. However, these qualities are not inherent but are learned and cultivated, from childhood and throughout one’s life, and are likely to be tested, repeatedly, across a variety of settings.

What is ‘Integrity’ and ‘Ethics’?
“There is a dynamic relationship between integrity and ethics, where each strengthens, or reinforces, the other.  Personal integrity is the foundation for ethics – good business ethics encourages integrity.” [ii]

Ethics is a societal concern, an external system of rules, principles, norms and values guiding moral conduct or action. Business ethics, operating within the societal system, similarly reflect generally accepted views or convictions about what is right, or good, conduct in the business context.
Concepts associated with ethics include truth, honesty, fairness, equity and social responsibility.

Integrity is a personal concern, an internal system of core principles and values, or a moral code, guiding our conduct and decision-making. While integrity can be influenced and encouraged, it cannot be imposed as it is a personal choice rather than an obligation. “When we are acting with integrity we do what is right – even when no one is watching.” ⁱ
The core principles underpinning high standards of integrity are virtues – the valuable personal and professional assets that we develop and draw on daily – including compassion, dependability, generosity, honesty, sincerity, kindness, loyalty, maturity, objectivity, respect, trust and wisdom.

The Importance of Ethics
“Business ethics revolves around the trust that society places in people in business, and the obligations the latter have towards society.”[iii] Similarly, trust is inspired in individuals and organisations that possess integrity and the success of an organisation depends on ethical leadership and on the integrity of all employees.

Trust is a key success factor and a successful business depends on the trust of various parties – employees, managers, executives, customers, suppliers, and even competitors[iv]. Six ethical terms form the foundation of trust upon which ethical business practice is built, including Ethics and Integrity, together with: Values; Morals; Character; and Laws. In the absence of ethical conduct, integrity is undermined, as is trust and the reputation of that organisation, typically resulting in the flight of both customers and good personnel. Once lost, it is exceedingly difficult to rebuild trust and reputation.
“Ethical values, consistently applied, are the cornerstones in building a commercially successful and socially responsible business.”[v]

Carter McNamara hosts the “Business Ethics, Culture and Performance Blog”[vi] and identifies some of the benefits of understanding the relationships among ethics, culture and performance to include that it:

• Promotes a strong public image;
• Cultivates strong teamwork and productivity;
• Gets to the root cause of why good employees could do bad things;
• Helps overcome roadblocks to performance that impact competitive advantage;
• Helps avoid criminal acts “of omission” and can lower fines; and
• Creates a healthy and sustainable role for your organisation in the broader community.

McNamara notes that “many people react that business ethics, with its continuing attention to “doing the right thing,” only asserts the obvious (“be good,” “don’t lie,” etc.), and so these people don’t take business ethics seriously. For many of us, these principles of the obvious can go right out the door during times of stress. Consequently, business ethics can be strong preventative medicine.”[vii] While formal attention to ethics in the workplace is stressed as the right thing to do and is a moral benefit of managing business ethics, McNamara notes that there are other types of benefits, including the following:

• Attention to business ethics has substantially improved society.
  Public reaction to such social ills as poor working conditions, limited to non-existent workers’ rights, institutionalised corruption, price-fixing and collusion, resulted in demands that businesses place high value on fairness and equal rights. Results include the establishment of laws and regulations (e.g. basic employment, anti-trust), of monitoring and enforcement agencies, and the growth of organised labour.
• Attention to ethics is strong public relations and promotes a positive public image. Organisations that consistently give attention to ethics can be seen as valuing people more than profit, as striving to operate with the utmost of integrity and honour. For effective marketing and public relations it is critical to align behaviour with values.
• Attention to business ethics is critical during times of fundamental change by helping to maintain a moral compass to guide leaders through complex conflicts about what is right or wrong. Continuing attention to ethics in the workplace sensitises leaders and staff to how they want to act – consistently.
• Ongoing attention and dialogue regarding values in the workplace builds openness, integrity and community – critical to cultivating strong teamwork and productivity.
  Ethics programmes align employee behaviours with the organisation’s top priority ethical values. Strong alignment between employees’ values and those of the organisation fuels strong motivation and performance. The latter benefit is echoed by Czimbal & Brooks in their statement: “When ethical companies support their employees in developing integrity, they become even more productive” ⁱ
• Ethics programmes support employee growth and meaning by enabling employees face reality, both good and bad – in the organisation and themselves – and instilling confidence to admit and deal with whatever comes their way.
• Attention to ethics ensures highly ethical, and legal, policies and procedures in the workplace, thus serving as an insurance policy. It’s far better to incur the cost of mechanisms to ensure ethical practices, including ethical treatment of employees, now than to incur costs of litigation later.
• Ethics programmes also help to avoid criminal acts “of omission” since they tend to detect ethical issues and violations early on so they can be reported or addressed.
• Ethics programmes identify preferred values and ensure organisational behaviours are aligned with those values by developing effective policies and procedures and then training all personnel about the policies and procedures. This overall effort is very useful for several other programmes, notably in managing values associated with quality management, strategic planning and diversity management. In respect of the latter, diversity is much more than the colour of one’s skin – it’s acknowledging different values and perspectives. The basis of a sound ethics management programme is in recognising and applying diverse values and perspectives.
• Overall benefits of managing ethical values in the workplace include that: managerial actions gain legitimacy; coherence and balance of the organisation’s culture is strengthened; trust in relationships between individuals and groups is improved; there is greater consistency in standards and qualities of products; and greater sensitivity to the impact of the enterprise’s values and messages is cultivated.

The abovementioned overall benefits are echoed in the argument that there “is a competitive advantage in good ethics[viii]” and that there are hidden long-term costs in electing not to adopt ethical business practices, including “sinking staff loyalty and retention, staff involvement in fraud, and damage to reliable supply chain relationships and investor confidence”[ix]. There may be immediate and short-term results from ‘greasing a palm here and there’, “But the usual result is that in the medium and long term, corrupt practices return like a boomerang and strike a blow against business.”[x] In short, no matter the size of the organisation, corrupt business practices should be rejected outright.

[i] Afro Ant (20 February 2016) Young Achievers Programme “2016 Session 1: Integrity & Ethics”

[ii] Czimbal, R. & Brooks, M., “Ethics & Integrity” [accessed online: http://www.abundancecompany.com/ethics_integrity.htm]

[iii] Cronjé, G.J. de J; du Toit, G.S.; & Motlatla, M.D.C. (eds, 2009) Introduction to Business Management 6th edition

[iv] BOMI International “The Importance of Ethics in the Workplace” [accessed online: http://fmlink.com/articles/the-importance-of-ethics-in-the-workplace/]

[v] Bob Dunn, President and CEO of San Francisco-based Business for Social Responsibility cited in http://managementhelp.org/blogs/business-ethics/2010/10/23/10-benefits-of-managing-ethics-in-the-workplace/

[vi] http://managementhelp.org/blogs/business-ethics/

[vii] McNamara, C. “Complete Guide to Ethics Management: An Ethics Toolkit for Managers” [accessed online: http://managementhelp.org/businessethics/ethics-guide.htm]

[viii] Willem Punt, FirstRand Group Ethics Officer cited in Erasmus, J. (15 July 2014) “Good Business Ethics Should be Second Nature” for Corruption Watch [accessed online: http://www.corruptionwatch.org.za/good-business-ethics-should-be-second-nature/]

[ix] Unido (UN Industrial Development Organisation) and UNODC (UN Office on Drugs and Crime) (2007) Corruption prevention to foster small and medium-sized enterprise development: Providing anti-corruption assistance to small businesses in the developing world (Volume I.)

[x] Satarov, G.; Parkhomenko, S.; Krylova, D.; & Rostovikova, Y. (2007) “Business Without Corruption: An Action Guide” cited in Erasmus, J. (18 July 2014) “Corruption Challenges are Different for Small Companies” for Corruption Watch [accessed online: http://www.corruptionwatch.org.za/corruption-challenges-are-different-for-small-companies/]