Ethics in Business

What does an ethical business look like and it is the same as one with a commitment to corporate social responsibility (CSR)? Firoz Abdul Hamid FRSA argues that we have still a long way to go to understanding the real implications of ethics for business, and at best still pick and choose what comes under the banner of CSR.

I was watching Lord Adair Turner, the Former Head of Financial Services Authority of the UK, on Al Jazeera discussing the topic ‘Has Capitalism Failed The World’. The discussion circumambulated the customary:  ‘Should we have more or less regulations, more public banks and less private banks?’; why haven’t we seen bankers incarcerated for the millions and billions that disappeared from major economies? I was waiting for the discussion on ethics to appear miraculously – what it is and has it a role to play in our fast desecrating world today – but, not surprisingly perhaps, I was disappointed.

Malaysia (which is where I am writing this blog from now) and Singapore was greeted by its annual ‘haze’ from our neighbour Indonesia two months ago. This problem did not just appear like some fall of an iceberg or an ash cloud. It has been going for years if not for over a decade. There was sparring of words of course. Whose companies, whose problem, who did what when and why? Year in year out ASEAN leaders meet, APEC leaders meet, Foreign Ministers meet and so on but this problem remains but a problem. One has to wonder if it is even on the agenda for discussion.

Having worked both in the private and public sector over some 20 years and having been exposed to decision-making process, I have searched for answers to a number questions. On what virtues are countries and governments run? To what does it pay homage to? Is ROI and ROE equivalent to ethics? Is meeting stakeholder expectations enough to run an ethical business? Indeed what is ethics in business? Where are our hearts and souls when we leave our homes everyday for work? What anchors us in all that we claim to do in the name of business, in the name of politics, the people, the environment and of existence itself?

When we were children we were taught morals and good values at home and in our Sunday masses, mosques, synagogues, temples and equivalent places of worship. We still teach our children these things today. But do we apply these values when we reach our adult lives and in our work places? And it we really did, why would this planet face such catastrophic issues with the environment today and why do we contend with market failures led by greed of a few? Why would we even need our food to be organic when in fact all food should be pure in its essence?

Year in year out we have the World Bank, World Economic Forum, IMD in Switzerland to name a few, grading countries’ competitiveness and business processes. Yet the most competitive countries are not necessarily the happiest to live in according to the Happiest Country Ranking (another new ranking). Where does the question of ethics rank in any of these rankings? How do we evaluate ethics? Are ethics in business so nebulous in concept and form that we shy away from measuring or legislating? Indeed who should be regulating and legislating ethics? How does one legislate human character, for in the final analysis it is humans who are enabling the destruction we sometimes proclaim to do in the name of progress?

And then of course we have companies and institutions investing in such things like corporate social responsibility (CSR) projects to give back to society in show of commitment to ethics. I remain cautious of these programmes because some companies are reported to have used some of these projects as a loophole for tax evasion. Indeed, an article in 2012, argued that Starbucks had gone to great lengths to boost its Fair Trade use and CSR for its sustainability of business. But its tax issues in the UK sullied its reputation. Shouldn’t all of what a company does be anchored on ethics, not just some? Or are we missing the point on ethics altogether here?

The sub-title of one of Thomas Hardy’s most acclaimed works – The Mayor of Casterbridge (1886) – is ‘The Life and Death of a Man of Character’. The novel tells the story of Michael Henchard who rose from the slums of life to become a well to do Mayor. But his past would haunt him causing his inevitable downfall. The crux of this tale tells the nuances of what makes us all: our characters.

All too often we glorify a delusional self. But underneath it all do we ask ourselves that perhaps it is these Mayors of Casterbridge that we have running our own institutions and businesses today in our countries. Do we have the tools to seek them out? Isn’t it logical that as a civilisation our global institutions and powers pay homage to this whole notion on ethics in business?

Is ethics defined by what is right by law, by faith and tradition, by political and social needs or by our conscience? Indeed what and who controls our conscience? What moves the conscience? What makes us hold dear to some things yet we fleece out others with ease in our lives. Someone sent me a quote recently, which read, “I will give my loyalty to those whose loyalty I don’t doubt”. This made me reflect on how organisations are run. How do we institute loyalty, institute ethics in our employees? How do we inculcate a culture that moves the conscience of employees, or do we? Within these questions, lie some of the organisation malice that face us today.

In my Column, “Ethics In Business” one of the questions I ask to my interviewees (who are organisation leaders) is what is your vision and culture based on? Is it for quick returns, and first in town blast of a business? Or are we really doing business both in public and private sectors, to serve the betterment of this planet? Are business schools teaching ethics even in their courses? I know the one I went to did not and I can attest most do not in the form that is discussed here. A form of corporate governance topic is taught. Governance and ethics are different. You can legislate governance, you cannot ethics. If we studied the education model of Finland we will find some of these basics are taught from school and elevated and upheld through to boardrooms. Maybe that’s why the Nordic countries remain the most competitive, with near zero corruption and one of the happiest countries in the world!

Firoz has a column titled ‘Ethics In Business’, where she interviews leaders from various industries and countries, globally. Firoz is also a Consultant Advisor To LKY School of Public Policy in Singapore. She has also served the Cabinet Secretary (Chief Secretary to the Government) of Malaysia.