Michelle Wright writes for Companies Digest

11 September 2020 | By Michelle Wright

It’s more important than ever to be ethical

2020 has pushed everyone way out of their comfort zones. With a global pandemic, personal and professional lockdown and economic turmoil, you could be forgiven for thinking that the only answer is to focus on survival.

Is there enough time, resource or headspace to look beyond keeping our families healthy and our businesses running? The regular announcements of layoffs and business closures pre-empt a long recession and increased unemployment. Time to batten down the hatches? Ration the resources? Cover our own backs? Not in the slightest. This is when business leaders need to adopt ‘defendable’ strategies because all of us will be under scrutiny. How we adapt to these crises, and the decisions we make, could come back to haunt us if we ignore the ethics.

Various corporations’ ethical responses have already made news – both good and bad. Some have behaved poorly to customers and staff and it hasn’t gone unnoticed in the media or on the Stock Exchange. Boohoo shares dropped 18% and saw more than £500m wiped off its value when revelations were made that factories within its supply chain ignored social distancing measures and, some suggest, led to a resurgence of Covid-19 in Leicester. The company has been accused of sweatshop conditions and modern slavery – the type of reputational damage that’s it’s unlikely to recover from.

It’s not a surprise to anyone buying fast fashion that savings for the unbelievably cheap clothes must come from somewhere. But when everyone has seen their local retailers and restaurants closed, and suffered lost revenue in their own businesses, knowing a board of directors behaved so callously is enraging. Boohoo’s only defence to date has been to distance themselves from the factory itself but it’s doubtful that anyone will buy that – or their shares in the near future.

Decisions taken that draw on a formal ethical strategy can be defended. Business leaders who have taken the time to consider the right thing to do, who have outlined their company values and specified their commitments, will be able to link back to that strategy if ever questioned about a decision made.

Business ethics are often seen as something only to be explored during good times. Projects to initiate CSR programmes, reduce environmental impact or improve diversity, accessibility and equality within the company can take a backseat when organisations are fighting to survive financially. But to ignore these vital, ethical, aspects of a business strategy is to put the company at risk. The bottom-line projections will look like a fantasy if your company is making news because of indefensible action it has taken that short-changes customers, pollutes the environment or puts lives at risk. It the past, these life and death questions had been the remit of certain sectors only – travel, healthcare, manufacturing for example. But now even the smallest retail store needs to think about how it can accommodate shoppers safely, small businesses need to support their colleagues in working from home and any employer needs to consider how families are juggling their parental and caring responsibilities with their work duties.

If this is something that you haven’t addressed as a business leader, how do you start? Conversations about what constitutes a defensible ethics policy aren’t easy, so give your team the time and structure needed. Ensure you include diverse views and think about drawing in expertise from outsiders who have qualifications or lived experiences that aren’t present in your management team.  Some people hold strong opinions and can get personally affronted during an ethics review. Others might dismiss the whole exercise and let their cynicism influence other board members. Remember that the ethics strategy will help everyone in the whole organisation. It’ll provide an umbrella for all decision making, showing how to act to avoid backlash, without ignoring vital operational or income-generating opportunities.

The steps you take will establish your business values in more ways than a marketing campaign ever can.  There have been a number of companies that have declared they are returning the Government payment received for furloughing staff. It sends a strong message: that the company is committed to the collective good, not looking for loopholes or opportunities to ‘make a buck’ when other businesses are on the brink of collapse. It’s an ethical approach and I hope those businesses that can afford it, will refrain from applying for grants and funding or vying competitively for resources over others. Surely, that’s no different to stockpiling toilet paper and leaving others with empty shelves? The UK and global debt are going to last for a long time. We need new solutions and partnerships that contribute to reducing and sharing the burden of these economic difficulties. There will be no room for bloated strategies or pet projects. Ethical positions will be ones of sustainability.

An ethical strategy should be informed by and, in turn, influence every aspect of an organisation. We are going to expect a lot from our leaders in the year ahead, and those of us in charge of a business, no matter its size, should be clear about the ethics and values our company holds dear. Despite the shock that has sent most industries reeling, this is the time to keep our business priorities aligned with our ethical philosophies. There is a chance to embed ethical responses into our working lives in ways that will have a large impact on society going forward. I hope that more and more business leaders take the opportunity to do just that.

Read the original article here.

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