Sounding The Call For Ethics In Business In A Digital World
In the pursuit of better, sustainable business fit for purpose for the society it serves, we pay increased attention to issues of corporate governance with human ethics at their root. Across cultures through history and witnessed by folklore, we have used different ways to communicate - from conch shells to smartphones and apps in 2019. This seems like an excellent moment to consider how we can better harness new digital tools to deliver improved results on walking an ethical line on decisions in business.
Language is a tool with which we communicate, and we use it - often fairly arbitrarily and without thinking too hard - to convey a message. When it comes to ethics, that message is about values. But the values - and the goals aimed for in bothering to convey the message in the first place - may get muddled in the conveying.
If you think about some of the language of financial regulation - such as the notion of ‘mis-selling’ around PPI by banks - or about the language of politics, where ‘misspoke’ is making a popular comeback, you will get my drift. I mentioned it in my last Governance Watch, and the next one of those is imminent.
Dictionary definition of ‘misspeak’ from that Google search:
misspeak /mɪsˈspiːk/ verbUS past tense: misspoke express oneself in an insufficiently clear or accurate way. "claiming that she misspoke, she served up a second explanation"
From where I sit, there doesn’t seem to be that much point in focusing only on what was ‘mis’ done, for better results in terms of corporate behaviour. For a start, there’s a very long time lag. It also eats up resources that might be better spent, and - based on UK media and social media space devoted to the results of regulation- there is rarely a sense that justice has prevailed for those who may have suffered as a result of decisions by those in positions to make them in business.
And there it is - most of UK corporate governance guidance is designed to aim at those in senior management. ‘Tone from the top’ is a very British mantra.
The assumption is that ethics trickles down, better corporate governance filters downwards, leaders set goals and engaged employees aim for them, directed by company ‘strategy and vision.’ The FCA’s latest ‘Senior Manager’s Regime’ - which has failed some fundamental tests in implementation, is a case in point.
But what if the reason this is all not working as well as it could is because the focus of corporate governance and ethics in business has become inflated by those designed to construct it ? There is absolutely nothing to suggest that bad ethical decisions are made all the time by rogue employees, while senior management somehow holds the reins on good ethical behaviour.
In fact, if you look at the arguments for curbing excessive senior management pay - some of which were addressed in my last post here on Board Talk - you will find that the ‘disconnect’ on pay can, it is thought, lead to a plausible ‘disconnect’ in empathy, making it unlikely that senior management ‘tone’ is somehow intrinsically representative of the ethical views of the many, rather than the few.
Moving on to where we are in 2019 - with a new language of communication, smartphones and apps. Consider The Clewer Initiative - a #SafeCarWash app that allows the tracking of modern slavery in the UK today. It is frankly a brilliant way of putting ethics into the hands of every citizen - instead of placing it only on the shoulders of those privileged enough to be at the top of business and society.
On April 7th - in a country so consumed by Brexit it is losing all perspective, and certainly often missing the rest of the news, the BBC reported: “Nearly 1,000 reports of potential human trafficking were made in the first five months of an app enabling hand car wash users to report concerns over workers. The Safe Car Wash app was launched by the Church of England's anti-slavery arm, the Clewer Initiative, and the Catholic Church last year. Users of the app have flagged up fearful workers, lack of protective clothing and workers living on site.”
Modern slavery is a critical concern for society, and it does nothing for the capitalist ideal, on which publicly listed businesses are built. This app may be about small independent car washes, but it holds a big lesson for big business in my view: empower the individual, and engage your employee in a similar manner.
I confess I do not know how many businesses are using apps internally to monitor their supply chain, but I know how to search the internet well, and there are many tools out there now to do just that. I have also written a great deal on Forbes over four years on the supply chain as a critical issue for better corporate governance, and the archive is searchable.
Modern slavery, of course, comes under the ESG (Environmental, Societal and Governance issues) banner, increasingly popular with institutional investors as well as the UK general public, who are beginning to wake up on their power on the ethics of pension investment.)
For the UK it is - as ever in issues around boardrooms - all about a change of mindset.
To talk only about ‘toning from the top’ is empowering, and also a reinforcing of a status quo. To talk about giving employees the tools to empower the business is a whole different thing when it comes to ethics - but it might be a hell of a way to get engagement.
In September 2018, I wrote here on Board Talk: “Loyalty is built on affinity and identification, and comes in part from engagement. When it evaporates in uncertain economic times amid rapid technological change and changing senses of identity and aspiration, business models need to change rapidly. Otherwise the disconnect between businesses, their employees and their customers will continue to grow.” I was covering a survey just out then from the UK’s Institute of Business Ethics (IBE).
Exploring apps targeted at watchfulness and reporting on multiple issues in the hands of employees may lead to better engagement, productivity and results when it comes to better corporate governance. it’s certainly worth a try, and it would be a recognition of changing ways of communication that might just resonate with a younger workforce.
Thank you for reading and Happy Easter/Passover/Spring.