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Is there a need for more focus on business ethics?
Over the years, some of the world’s best known corporate brands have found themselves in scandals sometimes of their own making.
In recent times, major businesses, including in the United States and Europe have faced similar situations, including Volkswagen and its emissions controversy, and more recently Wells Fargo and its bank fees issue.
While often in Barbados and the Caribbean such matters do not reach the news headlines frequently, the collapse of Trinidad and Tobago’s CL Financial and its subsidiaries CLICO and British American Insurance come readily to mind.
The need for business ethics, therefore, is equally important in this part of the world as it is throughout the rest of the world.
In 2011, then Minister of Minister of Industry, Small Business and Rural Development, Denis Kellman addressed the issue from a Barbados perspective while addressing the launch of a Business Ethics Programme for Small and Medium Enterprises (SMEs) offered at the Cave Hill School of Business, University of the West Indies (UWI).
“Good business ethics should be the core practice of any business and should be a consideration when dealing with both customers and suppliers,” he said.
Kellman said the practice of good ethics would be beneficial to the development of SMEs, noting that it “increases profits as more customers are attracted to do business with the company...it attracts quality employees as individuals seek to work with the organisation and it is easier to attract credit”.
“While making money is not wrong in itself, the manner in which some businesses conduct themselves to amass this money causes questions to be raised concerning their ethics,” the minister said.
“Unethical behaviour ruins the reputation of businesses in the market place and could even lead to closure.
“When viewed in the context of small economies like Barbados, the issue takes on even more significance.”
In 2010, a team of researchers from UWI’s Cave Hill Campus released research titled Measuring Ethical Perceptions And Intentions Among Undergraduate Students In Barbados.
They did so amid concern about “the ethical behaviour of business persons in the face of problems with Enron and the current global economic crisis”.
“It is believed that unethical behaviour may stem from the lack of proper ethics instruction being taught in schools and universities.
“This paper sought to measure the ethical intentions and perceptions of ethical problems among undergraduate students in Barbados,” the researchers explained.
“Ethics has become a highly debated topic among governments, businesses and societies due in large measure to the increasing number of scandals involving business professionals.
“As a result, ethics constitutes a critical aspect of business today in which students must be conversant.
“This must also be reconciled with the increasing focus on corporate social responsibility both in the private and public sector.”
The study found “found significant influences on ethical perceptions and intentions by factors such as gender, religious commitment, and academic majors”.
“Males were found to be more unethical in their ethical intentions than females.
“However, there were no significant gender differences found for perceptions of an ethical problem.
“It was also found that highly religiously committed students were more inclined to perceive an ethical problem and held higher ethical intentions,” the study stated.
“It was also found that with respect to the scenarios, accounting and management students were more able to perceive an ethical problem and proved more ethical in their intentions than students in other disciplines.”
The researchers also said “educators need to focus more on integrating ethics into courses as unethical managers in organisations would create an untenable situation”.
In the 2016 edition of its annual State Of Compliance Study, PricewaterhouseCoopers received responses from “800 executives globally”, with “just over a third of respondents came from companies with anticipated revenues of more than US$5 billion”.
The study cited an absence of real leadership as a stumbling block to corporate ethics.
“Senior executives appear to be supporting their compliance and ethics programmes, but they are less visible as actively engaged leaders of their companies’ programmes,” the study stated.
“An overwhelming majority of respondents to our survey (98 per cent) indicated that senior leadership is, at the very least, committed to compliance and ethics.
“But a majority of respondents (55 per cent) indicated senior leadership either provides only ad hoc oversight of the compliance and ethics programme or delegates most oversight activities.”
It added: “This disconnect appears to impact employee perception of senior leadership’s role in their organisations’ compliance and ethics programmes, as only 16 per cent of respondents indicated their employees view the CEO as the compliance and ethics champion at their organisations.” (SC)