To Better the Boardroom, We Must Better Ourselves
by Robert Gordon
Posted: 29 Jul 2010
It has almost become a cliché these days - ethics. Ever since the financial crisis people have been throwing around the term (and others such as values, integrity, sustainability) like rice at a wedding. 'Corporate Ethics' is the catchphrase on everyone's lips at the moment.
This is partly because we have been forced to discuss it. Through scathing media attacks on bankers' bonuses and ethically questionable dealings; to simple, practical little things such as losing billions of dollars - the corporate and financial sectors were suddenly pressed to become much more aware of the 'common good'. Such an approach is often touted as a way to improve success and help lift us all out of the quagmire, particularly in these difficult times when consumer and public opinion is so fragile and centrally influential.
Managers at all levels are being asked to instil corporate values and ethics 'from the top down': assessments should contain an examination of how well employees are meeting a specific Code of Conduct; corporations should consider investing more openly in philanthropic programmes; sustainability initiatives should be put into place. These are but a few of the varied and direct references to 'corporate ethics' that are being made here in the City of London.
To the less sceptical, all of this can only be a good thing. We're moving in the right direction if managing directors and CEOs are considering such things, surely? In many ways, that is correct. It's better that terms such as 'values' and 'ethics' are bandied around with real worth attached to them than the alternative ghost-town of social responsibility that led us directly into this mess.
The question we must be asking though, is whether or not this approach is the most effective one; the one that allows us to evolve most quickly in the direction that we need to develop in. In other words, how much truth is there behind the sentiment - how deep does the feeling of compassion really go?
One problem is that this new focus often removes personal responsibility from the equation. The discussions are not about 'my ethics' - they are about 'corporate ethics'. The language used continues to build up the corporation as an entity in its own right, one that can have its own internal values and compassion. And yet, all corporations are made up of individuals - all actions and movements made in a businesses' name are conducted by people. Without people, there is nothing real behind the corporate facade.
It sounds obvious, and indeed it is, but the global economy is also made up of individual people. Each transaction has a reality behind it that exists well beyond the numbers on paper; beyond the bottom line for an amorphous group of 'shareholders'. Corporate ethics means individual ethics - or at least that's what we should be talking about in addition to the current discussions surrounding regulations, tax plans and corporate responsibility.
We should be discussing not merely corporate improvements; social improvements; or regulation improvements - but personal improvements. This is the foundation that we must build upon. The whole might be greater than the sum of its parts, but its entire basis is dependent on the nature of those parts. To better the boardroom, we must better ourselves.
Perhaps a practical example might help bring all of this out of the lofty clouds of idealism. A few weeks ago I attended a lecture conducted by a high-level director of one of the largest corporations in the world - talking specifically about ethical values in business. There were a number of panel members responding to the initial lecture and one of them, another leader of a large multi-national, proclaimed proudly that this year - for the first time - his company would be specifically assessing how closely individual employees met the corporate Code of Conduct. The room as a whole seemed to think it was a great idea, and a wonderful way to build ethics into the fabric of any corporate structure (judging by the number of nodding heads). I wasn't so impressed.
Assessing our professional behaviour purely through such means takes us down a path that, ironically, removes personal accountability - replacing responsibility of action instead onto 'the Code'. If it's alright by the Code, it must be proper and ethical. Keep in mind that, for the most part, these codes are not of the spiritual variety. These aren't 'love thy neighbour' aphorisms. They are often made up of statements such as 'strictly adhere to Intellectual Property rights' or 'be transparent and honest in reporting your financial figures'. These are corporate Codes of Conduct, after-all.
One could easily adhere to such a code and still make decisions that are fundamentally damaging to a large number of people in our wider, global society. You could pass with flying colours your assessment, and yet still have sold out a large portion of agricultural land, that services many thousands of people, to be demolished in the search for precious minerals (possibly a trite example, but one that has and does occur nonetheless).
It's not that the increased, and seemingly sustained, focus on ethical and moral matters within the corporate sector is not encouraging or beneficial. It's surely better than nothing at all. It's also a very good idea that corporations have Codes of Conduct, and that financial regulators and overseers exist and are given some degree of authority. The creation of a culture of ethics within large organisations and governments is something that should definitely be applauded and encouraged.
However, we must question whether such actions alone are the most efficient and effective way to bring about the change that we desire. Some also even need to ask whether they truly desire such change, or are merely paying lip-service to it in the hope of later circumventing any rules or regulations put into place.
For if it truly is change that we want. Change on a global economic level. Then we must also focus some of our efforts upon the individual - we must make a call for each of us to progress ideologically (and, for many, spiritually) so that when the time comes to make decisions with ethical consequences we have the best tool for the job: a true and developed moral compass.
We must move away from merely looking externally for corporate ethics; away from shedding our personal responsibility in favour of blaming group ideology. Each of us has to make decisions every single day of our lives that have ethical and moral consequences - and each of us can strive to improve how we make those decisions.
We must ask ourselves, on a regular basis, what we have done that has had an impact - however small or seemingly insignificant - and whether or not our actions were ethical or could have been improved upon.
For it is only when we begin to answer that introspection truthfully, and consciously act upon that answer, that the corporate and financial world really will begin to change for the better.
Wind - Posted: 4 Oct 2011
The opinions expressed in this article are those of the author, and do not necessarily represent the views of St Paul's Institute or St Paul's Cathedral.