Why are ethics and responsible business important?
The culture and working practices of a small organisation are typically influenced by the owner, manager or managing director. Through their very visible presence, their personal attitudes and behaviours will set the tone of the business and have the potential to signal to employees how seriously ethical behaviour is to be taken in the organisation.
SMBs are not usually able to devote as many resources to building an ethical workplace culture as larger organisations. However, there are advantages to having a code of conduct and/or ethics policy in place. It reinforces and makes explicit the values and principles that are part of the organisational culture, so allowing them to be communicated to stakeholders. They provide support to employees on how they are expected to conduct their business activities responsibly.
There are substantial benefits in making ethical values explicit such as increased employee loyalty, higher commitment and morale as well as lower staff turnover. It also has reputational benefits as customers and suppliers gravitate towards those businesses that operate ethically and responsibly. Having a more open and innovative culture generates goodwill in the community and encourages employees to speak-up when they have ethical concerns.
So what contributes to sound ethics and responsible business practices?
Implementing a Code of Conduct or Ethics policy translates core values into specific commitments and expected behaviours in relation to the organisation’s key stakeholder groups (i.e. customers, employees, suppliers and contractors, providers of finance and the community). A code will also be a good place to address environmental responsibilities and to state how the company seeks to relate to its competitors.
When drawing up a code it is helpful to ask employees and other stakeholders about ethical issues that concern them and on which they would like guidance. Remember a code of conduct cannot cover every situation but should make clear the ‘spirit’ in which business should be done and point employees in the direction of further support.
The code should cover areas such as:
1. Prohibiting activities such as smoking, drinking, obscene language,
2. Discrimination, bullying and harassment,
3. Confidentiality, privacy and conflicts of interest,
4. Gifts and entertainment,
5. Health and safety,
6. Internet usage; cyber security; corporate email; social media.
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Owners or senior managers need to be aware that their behaviour sets an example to their employees. For a policy to be effective, it is important that they are regarded as people of integrity, adhering to high ethical standards. The same applies for supervisors and line managers, who should be reminded on a regular basis of this responsibility.