Ethics is high on corporate agendas these days. The financial crisis of almost a decade ago has had far-reaching implications, not least in encouraging the leaders of companies in all sectors to take a long, hard look at how their organisations do business and whether they are doing it in the right way.
Long before the financial crisis, the phrase ‘tone from the top’ was also doing the rounds. Thanks to scandals like those at Enron and WorldCom in the early 2000s, in the years since then there has been a very sharp focus on the role of executives at the highest level in influencing and shaping corporate culture.
In the UK, two interesting examples of business leadership have been in the spotlight this week. Firstly, Mike Ashley gave evidence to the House of Commons’ Business, Innovation and Skills Committee of MPs as part of its inquiry into working practices at his giant Sports Direct retail chain.
And yesterday, MPs on the same committee and colleagues on the Work and Pensions Committee, heard what might kindly be described as remarkable evidence from a number of those involved at the collapsed chain BHS, including its former owner, Dominic Chappell and its former chief executive.
Mr Ashley accepted that some practices at a Sports Direct warehouse were unacceptable, said that some issues had been addressed and told MPs that in terms of making changes, they were not ‘pushing against a closed door’. He also conceded that the size of Sports Direct meant that he could no longer be aware of everything that was going on at the company that he founded more than 34 years ago.
Meanwhile, the thousands of BHS employees who are losing their jobs as a result of the chain’s administration would be forgiven for having their heads in their hands in despair on hearing allegations made about the behaviour of some members of its leadership team at yesterday’s hearing. Former owner Sir Philip Green is to give evidence next week, so that story isn’t over yet.
‘Do the right thing’
While the UK has a lot of businesses for a small country – around 5.5 million at the last count – that still leaves a lot of people here who don’t run one, or never have or never will. So it would be sad if this week left them with the impression that the kind of failings under discussion were a normal part of business life. Mind you, given the fallout from the financial crisis, they may have a pretty jaundiced view of that already.
As in so many cases, it’s in the handful where things go badly wrong that hit the headlines – and the nature of the beast is that when things do go awry in big businesses, they inevitably have the most wide-reaching repercussions and affect the lives of the most people.
The reality is that vast majority of firms are run by people who want to ‘do the right thing’ – or to put it another way, do business in an ethical way, even if they don’t necessarily think of it in those terms. Perhaps it’s more a case of how Mr Ashley explained it to MPs: Is your business one where you would want your son or daughter working? And that seems a pretty good yardstick.
Investing in effective programmes to embed good governance, risk assessment and controls and strong compliance frameworks, are an important part of businesses acting responsibly towards and protecting all their stakeholders, supporting a robust, ‘do the right thing’ corporate culture – to which those at the top are fully committed, and are seen to be so – that is so crucial.
Publicity around businesses like BHS mean that more and more, customers want to know the businesses they deal with work in an ethical way, and are run by people in whom so that they can have trust and confidence. It’s an issue we address in the ICA Diploma in Governance, Risk and Compliance, part of a wide range of qualifications we offer in anti money laundering, compliance and financial crime prevention.
If you would like to find out more about ICA qualifications, we’re running a series of free information sessions at locations around the world in 2016, so why not book your place to find out how studying with the ICA could help enhance your career?
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