Some practitioners have found the principles of robust ethics somewhat elusive. The basics of ethical conduct and morality are quite simple, but application can be difficult because real-life cases often involve complex dilemmas. Sometimes there’s no single correct answer. As Professor Bob Wood, of the Centre of Ethical Leadership at Melbourne University, once said to me: “It takes about two hours to teach the history of ethics and the main schools of thought, but a lifetime to practice it.”
Why are ethics in the workplace important? Put simply, good ethics is good business. In 2011, the Ethics Resource Centre in the United States reported that half of the nation’s employees witnessed unethical or illegal conduct in their workplace, and the cumulative costs were a staggering 10 per cent of GDP. A commission of inquiry into the global financial crisis concluded that it was caused by a systemic breakdown in business ethics.
In 2012, the Ethisphere Institute pointed out that the performance of the “World’s Most Ethical Companies” outpaces the S&P 500 every year.
At individual company level, an unethical environment is one people don’t trust, and therefore can’t possibly work in at their best. Poor workplace cultures are often based on old command-and-control leadership styles. Take the case of two cut-price airlines, US Southwest and Japan’s Skymark. Southwest has exemplary customer and employee engagement results, and its financial performance has been very good. I’ve flown with this airline several times, and you smile so much at the excellent service you forget you’re travelling coach class. In contrast, Skymark announced to its customers in 2012 that they should “not expect flight attendants to help stow their bags, or even speak politely”. If travellers complained, they would “be removed”. I’m surprised these guys are still flying.
What do you look for to find an ethical workplace culture? There should be clear and simple statements of organisational purpose, principles and values – and a commitment to them – sitting behind the actions taken and the evident leadership and cooperative behaviours. And it should be pervasive. Before you step onto a Southwest or Skymark flight, you know what to expect because of their reputations. They expect you to commit to their style of ‘delivery’.
But the fact is, many organisations have high-level ethics and values statements bolted to their walls, posted on their website, etc, but they’re no more than broad expectations or conditions of acceptance. The better practitioners have considered where their major ethical risks lie from talking with all their people. There will be documentation of principles or processes to prioritise appeals or reviews of ethical problems, and staff will know them well and rely on them. They will be a source of confidence for staff that they’ll be treated ethically and equitably when difficult problems arise. There’ll be an expectation that the organisation’s decisions will reflect the net benefit to the majority and not just a sectional interest or group. Outcomes will be known to be unbiased and not favour one group.
After surveying a number of successful ethical practitioners, philosophies and organisations, social psychologist and cultural researcher Shalom Schwartz wrote that ethical practice must highlight two critical principles (and eight other supporting ones). The first is benevolence, which is to create an environment of self-enhancing values – creativity, freedom, curiosity, self-respect and choosing one’s own goals in a fair and caring atmosphere. The second is universalism, which is looking to define the greatest good for the greatest number, achieved in a peaceful and equitable way.
Illustrative practices of ethical organisations include: measuring whether their leaders are perceived as fair, respectful and trustworthy, and that people are actually treated accordingly; peer evaluation of managers’ performance; asking leaders to explain how their decisions benefit the majority; and sharing celebration of significant successes with teams as a whole and not just the top-enders.