Business Ethics: A Contradiction in Terms? Part II

Previously, we unveiled a species of person that we refer to as “The Undesirables”. If you missed it, click here to catch up. The Undesirables comprise a category of person found to be lacking in moral fibre. They are consequently willing to engage in activities that are otherwise contrary to society’s generally accepted norms and conventions. This type of person is willing to traverse moral, ethical and legal boundaries in their pursuit of self-interests. Lest it not be immediately clear – the problem that the Company faces if it experiences an infestation of Undesirables is that such an infestation ultimately prevents the Company from achieving its primary goal: to make a profit. The people who profit are the Undesirables who often pose as authentic businesses, employing questionable and often illegal business practices in order to achieve their goals. Which brings us to the next topic of conversation. Ethics. Ethics (or the lack thereof) is what separates the average business person from that other species, The Undesirables.The one common feature shared by all Undesirables is their unfailing disregard for ethical considerations. Simplistically, ethics can be defined as a branch of philosophy that deals with values relating to human conduct, and pertaining to the appropriateness of actions. The problem with the concept of ethics, however, brings us back to the position and clarity of that proverbial “line". The line that separates the ethical from the unethical. This line is not a steadfast one. It differs according to regions of the world, cultures, religious beliefs, personal backgrounds, personal circumstances, belief systems, across generations. One’s moral compass and sense of ethics can also shift and re-align with age and experience. Whilst this topic makes for interesting fodder for the local philosophical society, it doesn’t help business prerogatives much. To ensure that a business derives optimum advantage from its relationships, the business requires of its owners, managers, employees and business associates a sense of ethical certainty. It’s up to the Company to draw the proverbial ethical line in the concrete, thereby ensuring that all persons dealing with the Company know exactly what ethical considerations the Company applies and expects from its stakeholders. To lend certainty to the Company’s ethical stance, there are a number of tools that can be employed. Mission, Vision and Values Statement The concept of a mission, vision and values statement is regularly dismissed as something best suited in a business course with little value in the real world. However, one of the advantages of applying one’s mind and preparing well-worded statements is that in this way the Company can declare to the public that the Company is an honourable enterprise, possessing integrity and valuing its unblemished reputation.

• Mission Statement: a statement of the Company’s purpose. Its reason for existing.
• Vision Statement: a statement that outlines where the Company wants to be in the future. This statement can simultaneously communicate both the purpose and the values of the organisation.
• Values Statement: This is an attempt to capture the Company’s basic philosophy. An affirmation of the principles on which all the dealings of the organisation are based. In many respects it is an articulation of the Company’s moral position.

Business Ethics Policy A Business Ethics Policy takes the Company’s mission, vision and values statements a lot further. In this policy, the Company is able to set out those business practices that it will not, under any circumstances, become embroiled in. A Business Ethics Policy should be carefully considered and aligned with the Company’s mission, vision and values statements, and compiled with input from all stakeholders. It should clearly set out the Company’s moral ground, and may include, amongst other things:

• Human rights conventions;
• Environmental considerations;
• Support of local communities;
• Political involvement and contributions;
• Business relationships with suppliers
• Dealing with the competition;
• Legal considerations;
• Accounting principles;
• Labour relations.

Implemented properly this Policy is likely to generate much debate. And so it should. By encouraging an open and honest discussion about some potentially tricky topics, the Company will be in a far better position to both identify its ethical position and communicate this position to its stakeholders. This matter is, however, by no means over. No discussion about business ethics is complete without addressing one of the most disturbing challenges facing South African businesses today: Corruption. Stay tuned. The third and final installment is available here.

To be continued…

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.