For many years the main measure of business success has been profits or what is called the “bottom line” in other areas. The most profitable companies have only been viewed from the lens of their shareholder value and profitability index. However, today many people are questioning whether this should be the only way to evaluate the performance of companies. Most of these people have brought in the need to inculcate ethics in the operations of the organizations. One of such people is Prof. Deon Rossouw, the CEO of Ethics Institute and the Extraordinary Professor at University of Stellenbosch. Prof. Deon was hosted by the School of Humanities and Social Sciences for a Public Lecture on 24^th November, 2020 under the theme: Cultivating Ethical Organizations; Challenges and Career Opportunities.

Prof. Deon started his lecture by demystifying the notion that one is only ethical when they do what is right. According to him, one is ethical when they not only do what is good for them but also for the other person. In most societies in the world, people have a fairly good understanding of the need to do good to the other as one wishes for themselves.

However, when it comes to legal persons(organizations), the practice of ethics become more complicated and hence harder to practice. Prof. Deon borrows the definition that defines organizational ethics as values applied to decision making, conduct and the relationship between the organization, stakeholders and the broader society. These are the convictions that we hold as desirable. This spans through the strategic values of an organization, the general conduct of people in the organization. There is a great chance of the ethical values in an organization clashing with other needs of the organization hence the challenge in implementation.

Challenges in ethics

There are a number of challenges that an organization may face in inculcating ethical values. The question of whether ethics can be learnt or it is already predetermined for every person.  Some people are of the opinion that ethics cannot be learnt, but one practices it as a matter of common sense. “Experience has taught us that this may not always work. Such common sense is not so common,” the soft spoken Professor emphasis with finality. Therefore, organizations have to take up the challenge to take control of its ethical “software” in all its operations. For many, the challenge with teaching ethics is not so much about the act but the object of what is taught. While many organizations resort to fear/threats to inculcate ethics through punitive actions, Prof. Deon suggests that the sustainable approach to inculcating ethics is where it is embedded deep in the culture of the organization that the overall effect becomes sustainable and long lasting. Otherwise, he warns that sooner or later, the truth of the superficiality of ethical culture will most likely backfire.

He notes that teaching of ethics should take note of three competencies: cognitive competence (this is the teaching for learners to be familiar with ethical terms, theories, vocabularies and decision making process), behavioural competencies (teaching to change the behavior of people such as being more honest etc) and managerial competencies (inculcating ethics in running of the organizations). Any organization that is keen to inculcate ethics in their culture must distinctively separate the different aspect of competencies.

Benefits of ethics

Ethics has numerous benefits to any organization that cares to inculcate it in their culture. Organizations with ethical values have high reputations,are likely to have client loyalty, high staff morale and high stakeholder trust. An organization with strict adherence to ethical values are more likely to provide a meaningful working environment for the employees and to be more sustainable.

The Ethics Institute proposes a Governance Framework for growing an ethical culture in any organization. In the structure, the greatest step is to have the top leadership commitment in inculcating an ethical organization. Once the top leadership is committed, then there will be a tendency of a trickle-down effect, where the committees and the management board also plays its part in growing an ethical culture. Ethics Management is another aspect that is key to growing an ethical culture in an organization. This involves having a dedicated office or an officer whose work includes developing ethics strategy, conducting ethics assessments, conducting of programs to ensure that the codes and policies are clear to the stakeholders of the organization, reporting and monitoring to the governance structure and generally being in charge of ethics in the institution. Lastly, the framework proposes an independent assessment and external reporting on the ethical management in the organization. The independent reporting helps the organization to have a clear view devoid of bias and conflict of interest.

There are numerous career opportunities resulting from the wave of developing an ethical society. In an organizational point of view, numerous career opportunities open up in the governance of ethics. Such could include Ethics Manager/Officer or personnel working under the Ethics Assurance (both internal and external) and those involved in the offering of training services, ethics advisory or provision of ethics products.

Ethics should be the wheels on which organizations run. This way, there will be guarantee of sustainability and increase in the overall value in society.

 

This article was written by Gabriel Dinda, a Graduate Assistant at the School of Humanities and Social Sciences.

 

Merry Christmas and a Happy 2021!