Ethical behaviour in business is a major theme this month, with the Co-operative Bank, long-renowned for its ethical stance, now being controlled by hedge funds less recognised for their social commitment than their focus on profitable returns.
From the World Cup locations to MPs expenses scandal, media debates perennially highlight the moral judgments of those in high profile, responsible positions, and the way that their sometimes questionable attitudes to ethical behaviour have affected the standing of their organisations.
The role of university business schools in creating ethical leaders has been a hot topic for some time.
Developing ethical managers is undoubtedly a priority for business schools, which are nurturing the next generation of business leaders. It is also a critical issue for any company that wants to create a culture which will generate long-term trust and loyalty from customers and employees.
What I think is most important for business schools is that rather than ethics being studied as a discrete module of, say, the MBA, ethical challenges should instead be embedded within all core business and management degree modules.
An increasingly globalised business community requires managers who automatically reflect and consider the implications of actions.
Building a business culture which understands the impact of ethical behaviour on the bottom line takes time and commitment. Business schools and employers can work together to incorporate ethical values within day to day working life.
Ethical codes and policies underpin corporate behaviour but the real difference comes when directors lead from the front, communicating the company’s ethical message clearly and effectively. Leadership and management training is vitally important to ensure those at the top drive businesses forward sustainably.
A recent US think-tank survey showed that 60% of newly recruited MBA students view maximising shareholder value as a company’s top priority, and that number rose to 69 per cent for students halfway through the course.
Returns for shareholders is obviously an important goal, but can’t be cut off from employee well-being or customer satisfaction.
Mid-recession or during a business crisis such as Enron or Madhoff, the importance of business ethics soars. Companies, including banks like the Co-operative, should keep that tight focus on sound moral principles as economies and profits recover.
A new emphasis on incorporating ethics with business policies – and business education – could have a major effect on the long-term sustainability of organisations worldwide.