Sunday 25 June 2017

Ethical minds

Niall Byrne

Ethics are defined as the moral principles governing or influencing conduct. But when money and career advancement are involved, how many of us allow morals to get in the way?

Usually when business and ethics are brought up in the same breath by the media it’s in the wake of some high-profile scandal. Enron, Arthur Andersen, Halliburton, Goodman International — the list of companies that have become bywords for corruption is endless, as is the rogues’ gallery of infamous employees (such as Nick Leeson and Jérôme Kerviel) who cut moral corners in the pursuit of profit or promotion.

At a less dramatic level, every day, regulators around the world arbitrate on matters such as antitrust, monopolies, unfair pricing, acceptable advertising, minimum wages and so on. Guiding ethical principles form their decisions but the lines are mercurial and shifting, seldom definite.

Ethics, the moral philosophy that encompasses right conduct and good living, underpins how we act as people, and an ethical framework is often instilled by family values or religion. In contrast, the paramount — some would argue only — purpose of working life is to make money. The two are not always complementary.

In fact, one could state that the driving principle of capitalism, self-interest or what economic philosopher Adam Smith referred to as the ‘invisible hand of the market’, is inherently unethical. Michael Douglas’ character in the movie Wall Street put it more bluntly when he said “greed is good”, which doesn’t square with its status as one of the seven deadly biblical sins.

Nevertheless, employers have been emphasising their ethical credentials more in recent times, most notably in the attention paid to promoting corporate social responsibility.

Internet auction company eBay, for example, refuses to allow the auction of pornography on its site, while a growing number of restaurants and retailers contribute resources to offering Fairtrade products.

Companies also outline values in their mission statements and handbooks as a matter of course. These are articulated so widely, it is possible to think the profit-making imperative was subordinate to these lofty ideals. In many cases, reality gives the lie to this. Google’s mantra of ‘don’t be evil’ looked less convincing when the company caved in to the Chinese Government’s demands to censor search results in China.

With such self-serving agendas on display at the upper echelons of the business world, it’s no wonder ordinary employees sometimes lapse in the ethical stakes too.

Honest fools?

Being considered to have a good ‘work ethic’ was traditionally a great source of pride for an employee. However, more and more often we see the exultation of the ‘sheister’ creeping into working life; the risk taker, aka the ‘chancer’, is now seen as more valuable than the dull but honest toiler. In these uncertain economic times, the commitment to ethical behaviour in the workplace, which finds its most common expression in the simple effort to work one’s hardest, becomes relaxed.

Unethical behaviour is more likely to be justified by the employee when he or she has a grievance against his or her employer, believes Kenneth Buchholtz, human resources consultant with Campbell International.

“It’s more difficult for people to get out of bed when they’re unhappy in their workplace than when they’re happy, so in those situations you are more likely to find an increase in sick days that are not linked to real illness,” he says. “Where a company might not itself be dealing ethically with an employee’s grievance, the lines between what constitutes ethical and unethical behaviour become very blurred for that employee.”

A recent US survey supports the view that unhappy employees are more likely to act unethically. The 2007 Deloitte & Touche USA LLP Ethics and Workplace survey found a strong relationship between work-life balance and ethical behaviour at work. Some 60pc of employed adults surveyed think job dissatisfaction is a leading reason why people make unethical decisions at work, and more than half (55pc) ranked a flexible work schedule among the top three factors leading to job satisfaction. Some 91pc agreed employees are more likely to behave ethically when they have a good work-life balance.

The survey showed up some other interesting results. Stealing petty cash, cheating on expense accounts, taking credit for somebody else’s work and lying on time sheets about hours worked topped the list of unethical activities, with over 90pc of those polled viewing these as inappropriate.

However, 66pc of respondents felt taking a sick day when not actually ill was acceptable on some level, with 72pc believing using company technology for personal use was also acceptable to a certain extent.

The survey findings posit that leadership is the driving force behind company-wide adoption of ethical practices. Some 42pc of respondents cited behaviour of management as a top factor in promoting an ethical environment, with 36pc citing behaviour of direct supervisors and 30pc citing positive reinforcement of ethical behaviour as top factors.

Some 87pc of employees agreed a company’s values can promote an ethical workplace. The best strategy to ensure ethical practice, therefore, is to involve all staff members, says Buchholtz.

“If companies don’t get commitment from all employees regarding values and ethical behaviours they become confined to a plaque on the wall or a page in the employee handbook. It only becomes valuable if people start living the company values and can see why they are important.

“The way for companies to do that is through communication and feedback. It in turn brings business value in the behaviour of staff towards clients and colleagues. If the people at the top aren’t living the values, employees quickly see that, and it has repercussions.”

Brother, help thyself

Almost 70pc of employees have taken company information from their workplace, with the most pilfered being email address books, customer databases and proposals and presentations, according to recent UK research. The majority used office email to get the stolen information off company premises.

Most of those taking important information said they did so when they were leaving a firm to take up a new job. Some 72pc had no ethical problems taking the information to help them in a new post. Over 80pc said they felt their input in compiling the information justified their taking it.

The legality or otherwise of these actions usually depends on what is contained in the employee’s contract, says Dominic Wilkinson, barrister and human resources consultant. If a company does not have a restrictive clause in the contract it is very hard for it to impose one if somebody has left or is thinking of doing so.

“If the employer has trade secrets or commercially sensitive information, there is the view that they are entitled to protect that, subject to their having an express written clause in the employment contract.”

Without such a clause in the contract, the most common step is for companies to issue a ‘golden handcuff’ — a payment to the departing employee on the understanding that they will not use information they’ve gleaned from working for the company.

Restrictive clauses in the contract have to be reasonable, however. Wilkinson points to a case in the UK where a stockbroker inserted a clause stipulating a bonus would be paid to the departing employee only if he or she undertook not to work for another stockbroker anywhere ever again. It was thrown out by the judge as being “redolent of the indentured employment of another age”.

Another case alleging breach of contract saw a judge rule that the company could not assume exclusive ownership of client information built up through the skill and ability of the employee in the course of his or her work.

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