The time is now for organisations to refresh their culture and values
In 2015, ICAS launched its business ethics initiative – The Power of One – which highlights ethics is at the heart of the professional responsibilities of ICAS Members. ICAS has since published a series of publications, guidance and resources as part of The Power of One initiative.
The Power of One publication ‘Organisational culture and values’ highlights that leaders of all organisations must ensure that ethics and integrity are seen to transcend all other organisational objectives and strategies. Organisations need to drive trust and ethical behaviour is key.
In recent years there has been a decline in public trust and an increase in public scepticism, not just in business, but in many of our institutions. Despite the rhetoric about championing ethical goals, the reality of organisational culture can be quite different, with some organisations failing to live up to their stated values.
COVID now presents a positive opportunity for organisations and business leaders to refresh their culture and values in the “new normal”. The time is now for organisations to re-evaluate their culture to ensure the current and desired culture, values and behaviours are clear as we prepare to return to the workplace.
Tone at the top
The ‘tone at the top’ is the fundamental building block of ethical behaviour and Boards of Directors must own these responsibilities. These include the general acknowledgement that shareholders and other stakeholders have a legitimate interest in how the company is meeting its social and environmental obligations.
The reporting obligation in section 172 of the Companies Act 2006 should assist Boards in ensuring that, not only do their directors comply with their statutory duties, but also that shareholder, employee and other stakeholder considerations are properly considered in the Board’s deliberations. Boards are responsible for establishing a set of clear values, defining the culture of their organisation. These values serve as the basis for how everyone in the organisation is expected to behave. As discussed in the Institute of Business Ethics publication ‘Embedding Business Ethics – 2020 report on corporate ethics policies and programmes’, it is important that ethics, values, and culture are regularly discussed at Board level.
Shareholders also have a responsibility to ensure that ethical values are core to the organisations in which they invest.
Embedding ethical values
“Only in a crisis can you check the ethical heartbeat of a company,” said Alison Tarditi, Chief Investment Officer for Australia’s Commonwealth Superannuation Corporation. Source: Ethical Systems.
It is imperative that leaders of organisations not only set the appropriate tone but also lead by example and ‘walk the talk’. However, it is equally important for this tone to be cascaded down through the rest of the organisation and embraced by all those who work in it.
A culture of ‘doing the right thing’ needs to exist at all levels. All members of the Board, and management (the tone in the middle) must behave in a manner which reflects the company’s values, and this should be their driver when making critical decisions. Post-COVID recovery creates an opportunity for business leaders to refresh how their organisations ‘live’. Are there new ‘cultural norms’ that need to be established within their organisation? Codes of ethics can be helpful as part of a framework, or as a decision-making tool, for embedding the importance of trust and integrity across an organisation.
Organisations must also value their employees. The most trusted organisations are those that are trusted by their employees. ‘Grassroots’ support must be encouraged through regular communications – confidential ‘speak up’ mechanisms and open forums. The more open an organisation is, within reason, the less likely it is to have ethical issues that could discredit it.
Many organisations will highlight their employee welfare policies – such as health and safety, wellbeing and training – but it is essential that they stand by such policies in practice. Equality, diversity and inclusion will be increasingly important as we progress from the pandemic. How do individuals remain visible within an organisation when working from home? How does an organisation maintain a sense of ‘belonging’ when working in a hybrid model?
Speak-up mechanisms within organisations are vitally important – empowering and supporting individuals to have the confidence to promote good behaviour, influence others, and ‘speak up’ if they encounter ethical issues, without fear of retaliation. There is also a need for managers to ‘listen up’ to concerns and then act on what has been heard by investigating the issue.
An organisation is perceived, and remembered, by the way its employees behave. It is vital that individuals at all levels within organisations live up to its ethical values.
If organisations do not do what is right for their employees, customers and other stakeholders, they will not survive in the longer-term. The importance of trust must not be understated. The COVID-19 tide will eventually recede; however, the memories will last a lifetime.