Corporate Culture Shock: Profit AND Principles
Anyone who pays even the slightest attention to business ethics couldn’t help but catch the scathing op-ed piece by Greg Smith in last week’s New York Times. Smith lambasts his (now former) employer, Goldman Sachs, for a company culture that he says put more emphasis on turning a profit than on respecting and serving clients. Sadly, this does not do much to boost business’ credibility in the eyes of the public.
According to the 2012 Edelman Trust Barometer, the public’s trust in business now hovers at just 53% globally. With the economic crisis being covered on every news channel and everyone occupying just about everything, people are singling out all business as immoral and profit-obsessed. But it seems like a few bad apples have spoiled the bunch. There are some great companies out there who are doing amazing things in the areas of global development, U.S. community development and green technology. But sometimes bad things happen to good companies. How do you redirect a corporate culture that may be veering towards profit-at-any-cost and turn it towards a culture that values a company’s reputation and moral code more than the quick buck?
At last week’s Global Ethics Summit, hosted by Ethisphere, business leaders tackled these questions and more. Stephen Jordan, BCLC’s Executive Director, led a panel entitled “View from the Board” with Daniel R. Tishman, Vice Chair and Member of the Board of Directors at AECOM, and Sheila Penrose, Chairman of the Board at Jones Lang Lasalle. The discussion focused on the Board’s responsibility in creating an ethical work environment and centered on three issues:
- Behavior: Ethics and compliance is all about behavior. If the Chief Ethics and Compliance Officer cannot convince employees that he/she cares about ethics, employees won’t care about ethics either. It’s imperative for both the Board and the C-suite to “walk the walk” and show just how important ethics are to the longevity of the company. Ethical leaders result in ethical employees and reinforce the idea that ethics is everyone’s job, not just the CECO’s.
- Access: Everyone involved in a company’s success—from the Board down to the summer intern—should feel that they have access to resources that help them make ethical decisions. In the case of the Board, this may mean receiving timely information on litigations or investigations. For the average employee, signing an ethics agreement that has clear examples of what is and is not acceptable behavior may suffice. Open communication about ethics and compliance is a must if companies are to create an ethical corporate culture.
- Fortitude: When there is a problem, don’t ignore it. Being up front with your supervisor, CECO, or Board may be difficult, but ultimately it’s what’s best for you and for your company. Be firm in dealing with the ethical issues, but still be compassionate. Remember that companies are made up of people, and people make mistakes.
Restoring the public’s trust in business won’t happen overnight. But by taking the first steps to support an ethical corporate culture, we can make sure that the next generation of business is profitable because of its high ethical standards and not in spite of it.