The ethics evolution: will you be on the right side of history?

As the Covid-19 tsunami gushed through countries and communities unprepared for its devastation, it also uncovered practises that are less than ethical, prompting the question: How do business leaders rebuild trust?

News about the global pandemic brought stories of heroism and relief for some, but it is in times of crisis that an individual or company’s real moral and ethical value system comes to the fore. Global issues from overcharging for personal protective equipment (PPE) to leaders withholding government funding from their citizens brought shame on top of sadness.

The old adage “a fish rots from the head down” has been bandied about freely, but it isn’t entirely true: it takes more than one leader, board member or organisation’s employee to cross the line between good corporate governance and an unethical focus purely on profit.

The overarching effect of questionable ethics is the creation of a toxic culture that seeps into all areas of an organisation. Examples that made global headlines are plentiful, from oil spills that decimated once-pristine waters, to dangerous design faults that exacerbated fires in buildings; and vehicle manufacturers claiming to be within mandated emission rates when testing showed untold potential damage to the environment.

In cases like these, the CEO and other members of the C-suite work with lawyers and reputation managers to mitigate damage to the brand. But even with profuse apologies, the damage may well be done in their industry and certainly with the public.

The ripple effect continues, sometimes even until the brand is known for that incident alone. Trust leaves and often doesn’t return; other business leaders often look on thinking, “I’m glad that isn’t me.” But what are the lessons we can take from these incidents, especially where further investigation highlights suggestions that the people charged with upholding an organisation’s governance and transparency have fallen short?

Creating a culture of courage

Here’s the missing link: where business leaders are complicit in so-called “dirty dealings”, moral courage is either insufficient or absent altogether. One has to ask, “Where are the ethics that should be seated around the table at every board meeting? Where is the courage of a manager who knowingly “tweaks” the system? Which individual would refuse to put his personal reputation on the line for the sake of his company’s bottom line?”

In order to create and maintain a culture of courage where employees and associates choose ethics over profit, a strong moral code has to be seen as a business imperative. It requires a support structure built largely on an expectation of individuals doing the right thing, even when nobody is watching, to ensure the organisation’s efforts to work towards the greater good of society at large.

Where business operations are devoid of accountability, moral decay sets in and irresponsible behaviour results. While leadership must be living examples of a culture of responsibility, the concept will fail with the first person who is unable to draw a line in the sand and stand by it.

Unless every member of an organisation is held accountable to someone for their actions and there are consequences attached to those actions, what really happens is the birth of tolerance for the sin of omission and acceptance of deceit and ultimately corruption.

The C-suite determines extent of corporate governance

Board members and the C-suite are charged with steering their organisation towards a sustainable future through the adoption of robust ethical and legal governance and financial management policies. The Triple Bottom Line (TBL) approach upholds the concept of sustainable performance through the concurrent management of profit, people and planet.

Across this structure of economy, people and the environment, it is the duty of business leaders to encourage ethics, morals and integrity; and to uphold standards of honesty and reliability. This is even more important in times of crisis and one of the reasons an independent board is vital.

The right leaders in any organisation comprise the diversity of mindsets and values that would ensure one or more hand raised in commitment to courage, that silver thread of moral fibre that must run through everything.

As we watch Covid-19 unfold and bring with it unexpected variants, leaders must understand that when dealing with a novel virus we are building the airplane while we’re flying it, and strike a balance, however financially uncomfortable it may be, between fiscal fitness and the wellbeing of employees.

Importantly, it is incumbent upon the C-suite to provide daily, visible leadership at both a company and a community level. While we applaud our frontline and essential workers, we applaud too those businesses that may have been offered an “easier” way to maintain profits, but walked away from it. Even while nobody was watching.