Seventy-seven per cent of business leaders would justify unethical behaviour to save their business – so how can you tackle corrupt practices? Here are five ways to instil ethical behaviour throughout your company
Just over half of company employees say that fraud is a widespread problem in their country. The biannual survey by EY asked 4,100 employees from 41 countries in Europe, the Middle East, India and Africa (EMEIA) about bribery and corrupt business practices and 51 per cent said the problem was widespread in their country.
Bribes for business
More than a quarter said it is common to use bribery to win contracts, including 14 per cent in Western Europe. Although 28 per cent of those surveyed said that regulation has had a positive impact on deterring unethical behaviour, the survey, which included respondents from a variety of job roles and industry sectors, found that senior management are failing to foster a culture of ethical behaviour. The results show that 77 per cent of board directors or senior managers say they would be willing to justify some form of unethical behaviour to help a business survive, with one in three willing to offer cash payments to win or retain business.
Corruption is a challenge – not a way of life
These results may seem shocking to many. It's worth noting that the 51 per cent who perceived fraud to be a widespread problem in their country identified bribery and corruption as a challenge, rather than accepting it as a necessary facet of the business environment. This suggests there is the willingness to challenge and change unethical business practices. The survey also notes the lack of leadership in tackling business fraud and as many as 77 per cent of senior management/directors saying that unethical practices can sometimes be necessary. It's true that we all have to live in the real world and business can be political and messy, but there is surely something wrong with a business culture that accepts that bribery and corruption are necessary to survive.
Create the right culture
EY's Jim McCurry said: “Companies need to take steps to create a culture in which it is in employees’ interests to do the right thing. Training and awareness programs can play a big role in helping individuals understand the consequences of fraud and corruption, and encourage them to come forward if they have concerns over unethical conduct.”
Five approaches to an ethical corporate culture
A paper published by a global NGO for business ethics, Business for Social Responsibility (BSR), suggests that companies should look at five approaches to ensuring there's an ethical culture throughout their organisation. BSR's Alison Taylor says that, in trying to instil an ethical business culture, companies often overlook the complex network of relationships that make up the organisation. She writes: “Organizations are open systems: Their properties are greater than the sum of their parts, and these properties nest within other systems, forming a network of relationships. Efforts to change culture must therefore focus on every level in the system. These efforts should target individual engagement and motivation, interpersonal interactions, group dynamics, relationships among groups, and interactions with external organizations, including suppliers, customers, competitors, and civil society.”
The paper – The Five Levels of an Ethical Culture – suggests focusing on the following five levels of interaction to make sure that sound business ethics exist throughout the company:
How individual employees are measured and rewarded should be the foundation for ethical behaviour.
Enabling employees at all levels of the company to interact and raise concerns and grievances. Leaders should also be aware of how they set examples of company culture.
Employees in companies tend to work within teams and ensuring that all teams have clearly defined roles and that team members feel secure in expressing themselves.
How different teams within the company are recognised and rewarded can mean that some teams attain a status that is difficult to challenge even if it might be based on some unethical behaviour, while other teams have lower status, perhaps because they bring in less or no revenue. This can undermine values across the organisation.
External relationships are also extremely important and how employees/the company treat suppliers, customers, competitors and other stakeholders are part of what upholds and projects ethical business values.
How much does ethical banking matter to you?
If one of your relationship banks was investing unethically or involved in a banking scandal, would your company end its relationship with that bank?
3 obstacles to making the best workplace decisions
It can be difficult to maintain ethical standards and make the right decisions in real-life business situations, for example in breach of trust cases or insider trading. How can companies address this?
What can corporate/banking scandals tell us about corporate culture?
It's all too convenient to blame a rogue employee for a corporate or banking fraud. But when the scandal involves 1000s of staff members, the organisation has to look at its whole ethical culture.