What is the ethical issue?

Equality and non-discrimination in the workplace are important ethical issues for companies as well as being required by UK law. Companies that are committed to diversity are making an ethical undertaking to recruit and treat employees fairly and without discrimination.

In the boardroom, in particular, diversity sets a leadership example and sends a powerful signal to all employees about the company’s approach to equal opportunities. Boardroom diversity remains a sticking point in business, as the percentage of women in the boardroom is barely increasing, and similar trends exist for those from Black, Asian, and minority ethnic (BAME), and disabled backgrounds among others. Organisations are also struggling to understand the nuances of of intersectionality, as they grapple with how to establish mechanisms which provide opportunities for progression and success for those who do not typically populate the boardroom.

Recent figures published by Cranfield School of Management show that in the UK over half of FTSE 250 boards have no women board members at all. The lack of diversity on boards runs the risk of generating ‘groupthink’ and increases the likelihood of placing the organisation in a position where it has an inferior understanding of risks and opportunities. A lack of boardroom diversity perpetuates the perception of a traditional male cultural environment, an ‘old boys network’ and the lack of opportunities for employees of more diverse backgrounds.

More broadly, recruitment poses an issue, with positive discrimination gaining traction in both the workplace and the press. Although companies may oppose hiring an individual on the pure basis of their characteristics, it is important to recognise the value in the new perspectives and approaches to the business that an individual’s characteristics can bring, which may ultimately improve the organisation. Additionally, when judging the differing skills and levels of experience possessed by candidates, businesses may consider the contextual factors which have contributed to disparities in experience and skill.

 

IBE Guidance

A summary of good practice
  • Organisations should recognise that having an inclusive and respectful environment that values and promotes diversity provides an opportunity for the organisation and each individual to achieve their full potential.
  • By creating an open and respectful atmosphere where everyone can thrive, diversity at all levels of an organisation can contribute to a embedding a strong ethical culture. In addition to mentoring and talent management, diversity training can help to build an inclusive culture and promote opportunities for all employees to fulfil their leadership potential, regardless of background, gender, religion or race.
  • Possible methods of improving corporate practice and diversity measures include visible monitoring by the CEO and executive team of progress of diversity programmes, skill-building programmes aimed at specific groups and encouragement or mandates for senior executives to mentor junior staff from diverse backgrounds.
  • Additionally, organisations can adopt the Voluntary Code for Executive Search Firms, encouraging headhunters to widen their search criteria and produce a more diverse list of candidates. The new UK Corporate Governance Code also attempts to remedy the UK situation in boardrooms, stating that the ‘search for board candidates should be conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the board, including gender.’

 

Further resources

Publication type: Other

Recent Surveys on Business Ethics

Read the IBE's summary of the latest surveys on business ethics.

20 April 2021

Publication type: Board briefing

The Ethics of Diversity board briefing

This board briefing presents a summary of the key conclusions and recommendations of the IBE’s recent report on ethics and the diversity of boards.

14 April 2021

Blog

Building Back – Ethically

Dr Ian Peters' article for One magazine on culture and reputational challenges for all organisations. Putting values at the heart of purpose.

25 March 2021

Blog

Attitudes. Ethics. Trust.

In this blog, Guendalina Donde, IBE's Head of Research, discusses the results of the 2020 Attitudes of the British Public to Business Ethics survey.

13 January 2021

Publication type: Survey

Attitudes of the British Public to Business Ethics 2020

The 2020 results of the IBE's annual survey of the attitudes of the British public to business ethics.

30 December 2020

Blog

The Lessons of 2020

To end 2020, IBE's Director, Ian Peters, reflects on the lessons learnt and looks ahead to 2021.

23 December 2020

Publication type: Business ethics briefing

Business Ethics in the News 2020

This briefing provides an overview of the ethical concerns and lapses that were recorded by the IBE in its monitoring of media coverage in 2020.

23 December 2020

Publication type: Report

The Ethics of Diversity

An important report on diversity, groupthink and the need for fresh thinking and wider life experience on boards.

17 December 2020

Blog

Moving beyond targets

As we launch a report on diversity, IBE Associate Director, Mark Chambers discusses some of the issues raised.

17 December 2020

IBE news

IBE launches report on the Ethics of Diversity

Directors must prioritise diversity of thought and life experience advises new report by Institute of Business Ethics.

17 December 2020

Webinar

The Ethics of Diversity – Moving Beyond Targets

View the recording of our webinar.

17 December 2020

Webinar

Pandemic, People, Ethics: The other PPE

View the recording of our latest webinar.

10 December 2020

Webinar

Hugh Kay Lecture: Standards in Public Life - Are we in a Post-Nolan age?

View the recording of our webinar.

12 November 2020

Blog

#PandemicAndBeyond - 20:20 Hindsight

In the first blog of the series, Pandemic and Beyond: the ethical issues, Mark Chambers, IBE’s Associate Director (Governance), introduces the series and reflects on the year so far.

02 September 2020

Blog

Time to Act

Read the blog from our Director, Dr Ian Peters MBE.

22 July 2020

Blog

Doing business ethically in a time of coronavirus

Our Chair, Prof. David Grayson CBE discusses doing business ethically in a time of coronavirus in the latest IBE blog.

06 April 2020

Blog

Now is the right time to look at your culture

Ethical failures in business continue to happen with depressing regularity. Unfortunately, many organisations are only spurred to look at their culture and take the steps to embed ethical values at the heart of their decision making after things have gone badly wrong and customers, shareholders and colleagues have suffered as a result. 

05 February 2020

Publication type: Business ethics briefing

Business Ethics in the News 2019

This briefing provides an overview of the ethical concerns and lapses that were recorded by the IBE in its monitoring of media coverage in 2019. It gives an overview of which sectors and issues related to business ethics were most covered in the news. For 2019, we have recorded a total of 361 different stories involving lapses of companies with a UK presence.

29 January 2020

Publication type: Survey

Ethics at Work 2018: Germany

This survey report describes the German findings of our 2018 Ethics at Work research and provides comparison with the European average from the eight countries surveyed.

10 December 2019

Publication type: Survey

Ethics at Work 2018: Italy

This survey report describes the Italian findings of our 2018 Ethics at Work research and provides comparison with the European average from the eight countries surveyed.

10 December 2019

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