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Dear Friend of KLICE,

We are pleased to present KLICE Comment.

This month Simon Webley writes on 'Addressing Unethical Behaviour at the Workplace'

Simon Webley is Research Director at the Institute of Business Ethics and a member of the KLICE Advisory Council.

Here is the challenge: we know from surveys conducted in Great Britain and continental Europe that between 20% and 28% of the workforce (public/private, full time/part time) say they have noticed unethical or illegal behaviour by their colleagues1. In the US, this is as high as 45%2. Yet only around half, in all three areas, reported it.

Why? And what can organisations do to encourage 'speak up' and generally enhance ethical behaviour throughout their organisation? The principal reasons given in the GB Survey for not reporting bad behaviour are:

  • Nothing will be done about it
  • It is none of my business (indifference)
  • I will be treated badly by my colleagues

To give this question contemporary relevance, how was it that top management at Barclays Bank did, apparently, not know that some of their staff were allegedly 'rigging' the LIBOR rate?

So what are the types of misconduct of which employees say they are aware? The leading three are:

  • Stealing
  • Bullying and harassment
  • Discrimination (predominantly racial)

What is even more concerning is that a culture of secrecy prevails in too many organisations. However, in an age of universal electronic communications, it is increasingly difficult to hide behaviour of any kind. This should be good for business ethics!

What then are the reasons that employees give for behaving unethically? The most common are:

  • Pressure to meet unrealistic business objectives
  • The prevalence of an unethical culture
  • Being asked to take short cuts

Yet we know that public exposure of unethical (and illegal) behaviour can have a devastating effect on an organisation's reputation. Recent examples include: the BBC, USB, Siemens, Starbucks, Wal-Mart and Barclays Bank.

Yet it still holds true that organisations with strong and explicit ethical leadership are likely to experience fewer ethical lapses than others. It starts at the top. Boardroom agendas of these businesses are likely to include:

  • 'How we do' it as well as 'what we do'
  • Long term shareholder value as opposed to the next quarterly financial report
  • Values and ethics, as well as compliance.

It is encouraging that increasing numbers of organisations are espousing ethical as well as business values as the basis for 'doing business'. The IBE survey referred to earlier indicated that 73% now provide guidance to their employees about dealing with ethical issues. This is normally in the form of a code of ethics. Some of the most common ethical values listed in preambles to such codes are: integrity, openness and trust. From a Christian viewpoint, these values resonate with the principles concerning the conduct of relationships that are set out in the Bible. They cover: justice (fairness), mutual respect (love, compassion), accountability (trust) and honesty (openness).

The guidance covers issues not normally covered by law and regulation (which are mandatory). It will include such dilemmas as conflicts of interest, human rights and discrimination. The content of codes needs continual updating as new issues arise. Recent concerns include tax avoidance and use by staff of social media.

It is important to note that codes alone are not sufficient to ensure an ethical workplace. They must be accompanied by training programmes for ALL employees including board members, a confidential means to raise (ethical) concerns, surveys of principle stakeholders to see what is happening and then reporting on these matters to staff and outsiders.

Business ethics is primarily about the application of an organisation's core (ethical) values to all business relationships. It follows, therefore, that to make sure that unethical behaviour is minimised in the workplace, everyone needs to be convinced that doing things ethically is far more important than doing ethical things. The latter, often using the acronym CSR (corporate social responsibility), is well worthwhile but it is no substitute for paying your suppliers on time!

Christians understand the importance of core values as the basis for behaviour, and business operations are no exception.

1Employee Views of Ethics at Work: 2012 British Survey, Institute of Business Ethics, www.ibe.org.uk

2ERC National Business Ethics Survey (2011), based on FSGO guidance.

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