Tags: Anti-Bribery & Corruption (ABC), Corporate governance, Code of Ethics
The new edition of the IBE report on ethics policies and programmes in large listed companies will be published on 01 April 2020. In preparation for the launch, we shared a preview of the results with some of our supporters and colleagues, asking them to comment on how these results relate to their practical experience in the field of applied business ethics.
We started with Simon Webley, the IBE’s Research Director. Simon took up his present post in 1998 having been a consultant to the Institute since its foundation in 1986. He has so far written eighteen publications for the Institute. In addition, he has contributed to numerous journals and books and regularly speaks at conferences in different parts of the world on applied business ethics. Simon also assists large international companies with advice, training and workshops.
Simon, you were involved in the first edition of this survey in 1995. How have codes and programmes evolved over the past 25 years?
Over this last quarter century, the number of organisations providing guidance to staff on issues not covered by the law has increased markedly. As a result, the general impression of companies that have put codes and programmes in place is that they are much more comfortable making decisions about corporate ethics, especially when these affect income flow.
The other thing over these 25 years, is that the issues being faced are not static; new ones come up all the time - AI, Social Media, Data protection... It therefore means that you cannot ‘switch off’ or think this is a subject that is ever ’done’. The other thing that I’ve noticed over this period is that ethics’ guidance has become much more user-friendly. As a result, it is much more likely to be taken notice of. It has moved from “you must” to “we do”.
Companies still tend to make their code the focus of everything in terms of ethical behaviour. However, more and more companies are seeing that the code is necessary but not sufficient. For instance, a lot more organisations provide Speak Up lines (means for people to raise issues or concerns), regular training, and non-retaliation policies. The code is almost seen as a backup to that. In the past, companies just issued the code and that was it. Lawyers wrote it; it tended to be a big chunky document that was generally put on a shelf and there it remained. Now the code focuses much more on the ‘active’ part- showing how it works which makes it more useful and effective.
What are the main practical impacts that these changes have produced in the way business is conducted?
Boards and people in senior positions have come to realise that they have to take ethical standards seriously. As a result, they understand that they have to drive the ethics programme. A lot of boards are much more active than in the past in promoting their values and ethics, but there is still quite a big gap to fill.
Law creeps in on ethics all the time; when something becomes universal it tends to be codified by the law. The UK Bribery Act is an example. I think that has made a big difference in the last decade. For instance, it made facilitation payments illegal. We know that so far, there hasn’t been any prosecution based on them, but it is nevertheless, a deterrent. Mind you, the Act still doesn’t stop a regular flow of other issues having to do with unethical behaviour appearing in the media!
I think that over the past 25 years, the whole idea that ethics needs to be taken seriously has made a real difference to corporate reputation. Unethical behaviour hasn’t been eliminated but at least attention has been brought to it. People now expect companies to take a position on how they do their business anywhere in the world: they now ask about it in the early stages of their commercial relationships. Reputation is a risk no organisation can insure against.
Read the report...