When it comes to business ethics, where should responsibility lie? What role can HR play?
In the wake of the Volkswagen scandal, there has been a heightened focus on business ethics. Accounting irregularities, bribery and harsh treatment of employees are all examples of contravening ethical practice. Some would even say there is a conflict between commerciality and ethics in general in business. These issues are big issues in South Africa. But we are not alone. The 2016 KPMG Fraud Barometer Report indicates that fraudulent activity in the UK remains worryingly high – it has increased since 2014.
So who should take responsibility for ethics, and what is the role of HR? We are talking about this in a two-part blog.
Doing business ethically should make for better business. The Chartered Institute of Personnel and Development (CIPD) recently produced the podcast ‘HR and Business Ethics.’ They say business ethics should not lie within one function. Rather, every individual in the organisation should have a responsibility for ethics. It is something that should lie across the organisation. Each employee should have a sense of the right thing to do. Ethical business should be in the DNA of the people who work for and with you.
HR can play a role in embedding and monitoring ethical business behaviour. They can promote healthy cultures and leadership, and can hold organisations to their conscience.
‘We must build an ethical competence and framework for decision-making.’
For bigger choices and decisions facing the organisation, direction and decision making usually comes from the Board. Yet the smaller everyday decisions are important too, and most of us could benefit from guidance. This is because our business world has become more complex over time and we face increasingly complex issues, not all of them easily answerable.
On a practical level, HR can assist employees to be clear on what to do when facing dilemmas. Employees should know who to speak to, especially if they might feel they cannot speak to their manager. Guidance can be provided through a Code of Ethics.
If HR is accountable for healthy cultures and leadership, they must have the courage to surface and discuss what might not be working too. And to do that well, they really need to understand the organisation and to be able to listen to the voice of people in the organisation, and not only the voice of the shareholders.
In Part II of this blog, we’ll explore some practical suggestions for developing your ethical muscles.
Until next time.