CONCERNS GROW
ABOUT ETHICAL STANDARDS IN BUSINESS
Sixty
percent of people don't trust business leaders to tell the truth . Research
released today by the Institute of Business Ethics (IBE), shows that issues of
responsibility, integrity and honesty are the main things the public want British
business to address. The top three areas of concern were Executive Pay (38%),
Discrimination (36%) and Environmental Responsibility (33%).
Undertaken
by MORI in late September, the research was commissioned to coincide with the
publication of a new IBE guide, Developing a Code of Business Ethics, which provides
practical advice for companies looking to understand and address ethical issues
across their organisations. New report shows the way
Author of
the new guide, IBE Research Director Simon Webley, spoke about the importance
of developing ethical guidelines: "Business should be shocked to find
how low they score in the trustworthiness stakes. Sixty percent of people don't
trust business leaders to tell the truth. The public wants business to behave
more fairly, and increasingly, a commitment to ethical practice is a benchmark
for stakeholders. Having a code of ethics is a powerful tool, but only if it is
rooted in the core values of the business. "Ethical dilemmas
can occur at anytime - and can be hard to identify unless you are able to question
your decisions against some agreed criteria. It is too easy, when trying to win
contracts, or simply dealing with suppliers or customers, to take decisions that
may not stand critical assessment when the heat of the immediate pressure is off.
A genuine code of ethics can provide the criteria against which business decisions
are measured as well as improving a company's ability to recruit high calibre
staff, and to retain key people." Pressure to improve ethical standards
has increased as the awareness of 'unethical' corporate behaviour has taken centre
stage. Enron and similar cases shocked the public and undermined shareholder confidence
in standards of business conduct. This brings into sharper focus the need for
ethical practice and potentially makes business the target of tighter regulatory
controls. Ethics pay, as consumers value ethics in business and products
MORI
last year found that 80% of the public believe that 'large companies have
a moral responsibility to society' but 61% also thought 'large companies don't
really care' .
Reflecting this, companies following a code of ethics were found,
over five years, to have outperformed those who did not, according to IBE
research in April 2003. 90% of FTSE 100 have a code- but only 43%
of FTSE 250 businesses do
While 90% of FTSE 100 companies have a code of
ethics or business conducts, only 43% of those in the FTSE 250 have codes. Quality
varies from excellent to poor and having a code is no guarantee that it will be
followed. To be effective a code needs to be embedded into a company. Developing
a Code of Business Ethics sets out to provide a practical and comprehensive
guide to producing, implementing and maintaining an effective code of business
ethics. The guide reports that more than a half of major UK companies now have
specific ethics policies and this is a key part of good corporate governance.
Key points in the guide include:
- There is increased pressure for
UK directors to take corporate conduct seriously.
- Corporate values
and ethics must come from the top and the code must be monitored. Staff at all
levels should be involved in the content and implementation of the code.
- Every
company is unique and each must develop a code that is based on its own core values.
- Having
a code is not enough. The code must be understood, built into the business structure,
used, monitored and re-evaluated if it is to have a real benefit.
Ends For
more information, interviews or obtain a copy of the guide please contact:
Suthons
King PR: Carmel Suthons on 020 8543 4881 / Sarah King on 020 8879 0378
IBE:
Simon Webley, Research Director or Philippa Foster Back, Director on 020 7798
6040
MORI: stewart.lewis@mori.com, 020 7347 3000
Notes for editors:
- The
Institute of Business Ethics (IBE) was established in 1986 to encourage high standards
of corporate behaviour and sharing of best practice. IBE is a registered charity,
funded by corporate and individual subscribers. The list of nearly 80 corporate
subscribers includes Bank of England, Barclays Bank, BP, Diageo, ExxonMobil, GlaxoSmithKline,
HSBC, Lloyds TSB, Nestlé UK and Shell. Further information is available
at: www.ibe.org.uk
- The MORI research undertaken for the IBE in September
2003, asked respondents to name three issues that they thought needed to be addressed
by British business. A nationally representative quota sample 2,016 British adults
aged 15+ was interviewed throughout Great Britain on the MORI Omnibus, across
190 sampling points. Interviews were carried out using CAPI (Computer Assisted
Personal Interviewing), face-to-face in respondents homes between 25 and 30 September
2003. Data have been weighted to reflect the known national population profile.
See separate fact sheet for further details.
- Developing a Code of Business
Ethics was published in October 2003 and written by Simon Webley of IBE. Price
£20, ISBN 0 9539517 4 X
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