If you think that having a policy on ethics is nice to have but not essential, then think again.
Research from the Institute for Business Ethics shows that companies with an ethics policy are more likely to be commercially successful in the long run. Although 90% of FTSE 100 companies now have an explicit policy on ethics, many organisations are not taking the issue of corporate ethics seriously enough. What’s more, a recent study by Personnel Today’s sister publication Employment Review found that less than half of the organisations it surveyed had a formal policy on Corporate Social Responsibility (CSR).
The Stern Review – on the economics of climate change – has provided a great opportunity for HR to influence the business agenda. And the new focus on global warming is a chance for employers to review working practices, such as allowing homeworking to significantly reduce the impact of commuting.
In these times of rapid change, HR must keep up to speed with the latest global debates on ethical issues and offer reassurance to staff who bear the brunt of criticism about non-ethical practices.
As CSR continues to rise up the agenda, there’s no doubt that negative headlines and tougher lobbying against companies will increasingly affect HR, so effective communication is essential.
If the HR function wants to increase its influence, it needs to be leading the drive to make sure ethical decisions have a positive impact on business goals.
Aside from being a good PR exercise, the fact that an organisation regularly pays attention to its ethics not only portrays a strong positive image to staff, but ensures that the public sees the organisation valuing its people as well as its profits.
As major ethical issues will inevitably turn into legislation one day, it’s better to ensure ethical practices are in place now, rather than incur the high costs of compliance and litigation later on.
By Dawn Spalding, legal editor