Ethics – the foundation for a better world
This week has been a special one for us at ACCA. Wednesday was Global Ethics Day – an important occasion in the calendar that we celebrate annually as it aligns with our values.
It’s a day where businesses and individuals can reflect and explore the meaning of ethics and their impact on life and society. It’s also a time where we can come together and focus on the most critical ethical challenges of these times – how to drive climate change action, make responsible corporate decisions, fight corruption, stand up to social injustices, create good government policy, and navigate the continuing impacts of the pandemic.
Ethical code in business
In business, ethical dilemmas are prevalent and can affect relationships with colleagues, management, clients and other stakeholders. Optimal solutions are often difficult to reach, and getting it wrong can have serious implications for a business, with reputational and financial consequences. Organisations need an ethical code, as well as training and support for employees on ethical issues.
Accounting and ethics
Ethics is at the core of what all accountants do. In 2014, the same year the Carnegie Council for Ethics in Internatlonal Affairs introduced Global Ethics Day to the world, we established our own Global Forum for Ethics – which provides expert opinion and stimulates discussion.
The forum includes ACCA member representation from a range of countries across the world. Many jurisdictions have their own challenges and issues, but there are also many common themes.
To mark Global Ethics Day this year, we asked our Global Forum members what the top ethical challenges were in their respective jurisdictions and the reasons behind such challenges.
Their insights revealed these top five ethical business challenges:
- Nepotism/favouritism
Nepotism and favouritism scored highly in many parts of the world and came top of our forum’s list of ethical business challenges. One form member described a prevalent ‘members club’ culture in their country – where business and tenders are secured by ‘who you know’ and ‘who you owe’, which mattered more than transparent, ethical relationships.
- Corporate governance
The second biggest ethical challenge was corporate governance including corporate structure and the management of business. In some jurisdictions, especially developing nations, a common theme was limited resources and poor government policies leading to poor corporate structures. In some parts of the world, family-owned businesses are very prevalent, with many large corporations being family owned, leading to the risk that owners favour investment and people from those they have strong ties with, leaving minority shareholders ‘lower down the totem pole’ when it comes to making business decisions.
- Technology and data
In business today, critical decisions must be made to ensure we are protecting using customer data appropriately, and also not infringing on the personal freedoms of employees. Forum members highlighted this issue of how a business uses personal data as a significant and very current issue for many organisations. That said, all of our forum members recognised the significant benefits of rapid technological development and the power it brings.
- Discrimination
Discrimination is still a huge ethical challenge in business globally, and as an ethical issue has risen up the agenda in recent years. Discrimination in the workplace occurs when an employee is treated unfairly because of their race, gender, sexuality, religion or disability, and it can take many forms. This is an important area where businesses have a key role in driving forward a fairer and more inclusive approach, not just to manage their own risks and maximise the productivity of their workforces, but because it’s the right thing to do for economies and society.
- Abuse of power
Abuse of power was heighted by our forum members as a key ethical challenge. This is where one puts their own interests ahead of others, often driven by greed for power and money. It’s an ethical challenge that is seen as prevalent in business and society as a whole. Forum members in some parts of the world pointed to how corruption within government fueled abuse of power in business. If a government is not trusted to use funds for their intended purpose, then businesses may be more reluctant to report accurately and pay taxes. However, forum members also pointed to many good examples of large businesses working to be compliant and playing a key role in driving corporate governance improvements in the country where they are based.
What was clear from our forum members is that, although they face significant ethical challenges in their respective jurisdictions, the positive message is that they and many others like them have the desire and knowledge have to make things right and the courage to do the right thing.
We will continue to celebrate Global Ethics Day as it helps to shine a light on these important issues, but ethics is something we need to have in mind every day in all of our activities.