Will the return of high inflation fuel concerns that businesses don’t behave fairly? IBE’s Associate Director (Research), Prof. Chris Cowton, delves into the results of our recent survey of the Attitudes of the British Public to Business Ethics.
“It’s not fair!” is one of the first ethical complaints we make as children, perhaps aimed at a parent or a teacher. But there’s nothing childish about this. It’s an indication of just how basic fairness is to our conception of right behaviour and good social relations.
Now, when we get older, it might dawn on us that there’s more to fairness than we realised when we made our first utterances on the subject. There’s certainly a very grown-up literature in philosophy on fairness and its close relation, justice. However, many of our everyday reactions to unfairness are founded on a fairly (if you’ll excuse the pun) simple intuition – and not necessarily any the worse for that.
Fairness matters in business. It provides a solid foundation for positive, trustworthy relations with stakeholders such as suppliers, customers and employees. And it probably underlies some of the concerns revealed in our recent survey of the Attitudes of the British Public to Business Ethics. For the 10th consecutive year, corporate tax avoidance came out top when respondents selected what they regarded as the three most important ethical issues. I think this could be interpreted as a perception on the part of ordinary people that business is not paying its fair share. And third on the list was executive pay, against a backdrop of the increasingly unequal distribution of economic rewards that appears to have driven the growth of populism. Fairness again – or rather, it’s evil twin, unfairness.
But one particular result in this year’s findings caught my eye. I confess that ‘Fair and open pricing of products and services’ didn’t make it into the top six ethical concerns, but I wonder if the increase from 12% to 15% of respondents selecting it is a foretaste of things to come. As we experience the highest inflation rates in 40 years and hit record prices for fuel and energy costs, I think it might be. Inflation has pernicious effects, and many people will feel hard done by and doubt the justifications for the price changes that they see. If I’m right, expect “It’s not fair!” to be an increasingly common complaint over the months ahead.
In some ways, this will bring us back to business ethics basics. For centuries, apart from the charging of interest (or usury), the big moral question around economic transactions was what constituted a fair or just price, of which fair or just wages (the price of labour) were a particular case.
As prices and pay enter a period of turbulence, are you prepared for the fairness challenge? It never really went away, but my suspicion is that we are going to be hearing a lot more of it.
Download the survey here...
Professor Chris Cowton
Following a long career of leadership, teaching and research in the higher education sector, Chris joined the IBE in 2019 with a remit to strengthen its widely respected applied research and thought leadership, and a specific role of further developing our engagement with the education sector. In pursuit of the IBE's mission to base its work on high quality, relevant research, he now also leads on our training and advisory services.
Chris Cowton is Emeritus Professor at the University of Huddersfield and Visiting Professor at Leeds University’s Inter-Disciplinary Ethics Applied Centre. He was previously Professor of Accounting (1996-2016), Professor of Financial Ethics (2016-2019) and Dean of the Business School (2008-2016) at Huddersfield, having joined after ten years lecturing at the University of Oxford.
He is internationally recognised for his contributions to business ethics, especially his pioneering work on financial ethics. In 2013 he was awarded the University of Huddersfield’s first DLitt (Doctor of Letters, a higher doctorate) in recognition of his contribution to the advancement of knowledge in business and financial ethics.
He is the author of more than 70 journal papers, has edited three books and has written many book chapters. He was Editor of the journal Business Ethics: A European Review for a decade (2004-2013).
He is also a visiting professor at University of the Basque Country, Bilbao (Spain), and has been a visiting professor at the University of Bergamo (Italy) and a member of the Ethics Standards Committee of the Institute of Chartered Accountants in England and Wales (2009-2018).
Discussion of ethics in public life, including business, often makes unhelpful sweeping generalisations that take us nowhere. ‘Politicians are only in it for themselves’, ‘businesses manipulate consumers’, etc. Such comments describe one end of a spectrum, perhaps, but they do a disservice to those who are trying to do so much better. The IBE plays a key role, in supporting high standards of business behaviour and I am delighted to use my research expertise to contribute to that mission.