The Globalisation of Corporate Governance by Davies Adrian;

Author:Davies, Adrian;
Language: eng
Format: epub
Publisher: Taylor & Francis Group
Published: 2011-08-15T00:00:00+00:00

Ethics Is the Core of Company Character

Company character is shaped by experience, ambition and behaviour. Experience tempers company personality to cope with change and adversity; ambition is the motive which drives the development of the company; and behaviour of individuals increases or diminishes the trust and respect which build reputation. Company character may be reflected in the vision statement and other pronouncements and publications made in its name, but character is a cultural, not a procedural phenomenon. To be sustainable a company’s culture needs to be founded on firm ethical principles; relativity undermines trust and is fatal to culture.

‘Ethics are often confused with morals but a clear distinction may be drawn between them. Morals are guidelines for distinguishing between conduct which is right or wrong. Conduct which is wrong is not moral. Ethics help to distinguish between actions which are not immoral, and both of which are “right” but each of which may have different outcomes. Ethics enable us to deal with dilemmas where choices have to be made which have different repercussions for the parties involved. Avoiding and resolving dilemmas is a key function of corporate governance, not least in balancing the demands for short-term action against the protection of longer-term interests’ (Davies 2006). Company boards must, obviously, avoid immoral actions but they will constantly be faced with ethical dilemmas. The pattern of their decisions in such cases will shape both the company’s character and determine its future. To help boards in dealing with ethical issues, the Institute of Business Ethics (IBE) was founded in 1986 in order to emphasise the essentially ethical nature of wealth creation, to encourage the highest standards of behaviour by companies, to publicise the best ethical practices and to demonstrate that business ethics involve positive initiatives, as well as constraints. (<www.ibe.org.uk>). The IBE has wide support from British companies, is multi-faith in character, has a widely used Code of Ethics, engages in pioneering research into ethics and offers a range of training facilities for staff dealing with ethical issues. The IBE emphasises that ‘goodness advances with a mixture of altruism and self-interest’. Its work is complemented by that of the Good Corporation (<www.goodcorporation.com>), which has developed a Good Corporation Standard for business behaviour which may be accredited following detailed assessment and periodic review. Good Corporation is not a consultancy and works with prospective members ‘at arms length’. Members include Total, Xtrata, Telefonica, O2 Europe, Nestlé UK, GDF SueZ, British Land, etc. Good Corporation also assesses companies against their own Statement of Business Principles (when available), which is a key test of authenticity.

Another key player in the field of ethics is Ethical Corporation. Founded in 2001 by Toby Webb, it publishes a magazine, organises conferences and undertakes research. It advises a number of UK businesses and is active in promoting interest in, and knowledge of, ethics.

One of the key challenges for ethical companies is the issue of corruption. This is clearly unethical for most Western societies but culture in parts of the developing world does not see corruption as a ‘black and white’ issue.

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