Time to Improve Ethical Behavior

On the positive side, the overwhelming majority of executives and managers consider the internal and external dealings at their organizations to be ethical, with more than two-thirds saying they are extremely ethical.

However, when those same business leaders rank business in general compared to five years ago, only about one-fifth said internal and external dealings were extremely ethical. Significantly fewer managers than executives consider business dealings today to be extremely ethical, according to a nationwide survey of senior executives and managers we conducted.

There is substantially more public awareness of questionable practices inside businesses these days, causing many companies to either establish or highlight internal controls. “The corporate corruption cases of the last few years have created an environment of businesses instituting ethical practices,” said one survey respondent. “Also, government regulations have created a reason for companies to have better due diligence in this area.”

“There is more awareness of ethics in business and it is seeping into the boardroom,” said another respondent. “Converting this to action is not as evident.”

This heightened public awareness increases the accountability of businesses, requiring the leaders of those businesses to increase their own internal focus on ethical behavior.

“The incidents over the last couple of years have awakened the market,” said one respondent. “Anyone expecting to attract and retain consumers and employees must be sensitive to building and strengthening their brand from an ethical (trusted) point of view or risk alienation and diminishing returns.”

The attention to improving ethics is not only the responsibility of the experienced managers and executives currently working, but will increasingly fall on the next generation of managers now completing their education.

“The ethics are swinging back to what they should be, and hopefully the younger generation and recent college graduates will raise the bar from where it has been the past 10 years,” said one respondent.

Said another: “External environment and change in CEO has forced our financial services firm into a new phase in its existence. Increased concern with ethics has been a positive outcome of the recent changes.”

Any successful internal or external dealings or activities are like any good relationship; they are based on trust.

“Unfortunately, the lapse of ethical behavior by senior management in both for profit companies and in some large not-for-profit organizations have had a significant negative impact on all business enterprises, charities and associations,” said one respondent. “It will take a lot of hard work to win back the trust of the public.”

It’s time for those business leaders who haven’t already done so to do that hard work and put ethics and accountability where they belong: at the top of the value chain.