Individuals should seek to uphold the highest of ethical standards, and in so doing safeguard not only their own reputation but that of their organisation.
Unethical behaviour has been at the root of recent scandals involving both individuals and corporations. A clear principle is that leadership and good habits are about taking personal responsibility. If you look in the mirror who do you see? Professionals live by their reputation. This is their behavioural capital, their personal brand, what they will be remembered for. Reputation takes a long-time to build, but can be lost in an instant.
How do you want to be remembered?
How do you want to be remembered? What will be your legacy? These are fundamental questions for everyone. Self–reflection is a very important part of reinforcing ethical concepts. Whilst with the pace of business it can sometimes be difficult to catch your breath, there is little doubt of the need to take time to reflect – to consider whether your actions and decisions are building up your personal reputation, and are not building up problems which could destroy it.
Will someone be happy to be remembered as the person who made the most sales, or presided over the highest profits, or earned the biggest bonus, but whose business practices were, at best, questionable? How we are remembered at various stages in our life will be influenced by a number of factors. Memories of success are short, but memories of ethical failure are long lasting. You can provide years of good service to a company, but if you do one thing wrong you may be remembered for that.
Abuse of power by senior figures in an organisation is a common failing in corporate and other scandals.
By way of contrast, Michael Woodford, former CEO of Olympus, is an example of a business person who gained his reputation for demonstrating ethical leadership and moral courage when he exposed the financial irregularities at Olympus in 2011. The circumstances faced by Michael Woodford were extreme; however, if everyone demonstrates similar qualities of ethical leadership and moral courage in their career, their own personal reputation, as well as their organisation’s reputation, can be safeguarded.
A different world
There is little doubt that the mood of the public has changed. The public’s attitude towards business has hardened, including in relation to perceptions of excessive executive remuneration and aggressive tax avoidance. Ultimately, the success of business is based on trust – the trust of customers, but also the trust of a range of stakeholders and that of society which provides business with the mandate to operate. Once trust is established it can have many benefits for business; once it is destroyed it is very hard to regain.
The ‘think before you act’ mantra also has heightened relevance for social media. One only has to look at the scandals which have been blown up in the media out of inappropriate comments made on Twitter. The undoubted benefit of social media, that is, the ability to communicate with a large group of persons almost instantaneously, is also its biggest danger.
If you look in the mirror who do you see?
Behaviour is key to everything that we do in life. Ultimately, for most of us, the best judge of our own behaviour is likely to be ourselves. It is the process of self-reflection. Can you sleep at night? Is your conscience clear? The decisions that people make can be influenced by several factors including their own personal relationships, as well as social and organisational pressures. However, at the end of the day, the question is whether an individual can look at themselves in the mirror and be satisfied with the decisions that they have made.
But, even then, personal biases can come into play – individuals can have a propensity to see what they want to see, not what is actually there. People can easily convince themselves that their interpretation of the law, or ethical principles, justifies what they have done, or want to do. A mistake can start off small, easily be argued away in the mind of the perpetrator, but what happens when it snowballs into a bigger issue? When is the tipping point for a person to admit, even to his or her self, that there is a problem? Also, some people will have higher tolerance levels for impropriety than others.
Loyalty versus objectivity
Loyalty is a much-treasured attribute. However, care has to be taken to ensure that one’s loyalty is not misplaced. People need to assess a situation based on the available facts and not because they feel a loyalty towards a specific individual or group of individuals. Undoubtedly, ‘misplaced loyalty’ could be a threat to one’s objectivity and integrity.
Reputation is everything
As discussed in the ICAS research Speak up? Listen Up? Whistleblow?, whistleblowing/ ‘speak up’ mechanisms within organisations are vitally important – they encourage and empower individuals to ‘speak up’ if they encounter ethical issues and give them the confidence to promote good behaviour and influence others. Speaking up allows issues to be dealt with at the earliest opportunity before they escalate. Listening is also important – if someone speaks up but nobody listens, then the speaking up will not be effective. There is therefore a need for managers to ‘listen up’ – concerns need to be listened to and then action taken to investigate the issue. Sometimes an investigation will show that there are no issues, sometimes people will be mistaken, but they need to know that matters will be investigated so that issues of concern do come to light.
It can be difficult to take the ethical stance, and to stand up against others if their behaviour is inappropriate. Ethical leadership requires moral courage. Since 2017, the need for CAs to have ‘courage to act morally’ is highlighted in the ICAS Code of Ethics to reflect that ICAS recognises that often ‘doing the right thing’ may not be easy and the ICAS belief that ‘moral courage’ is an underpinning qualitative characteristic required of a CA in order to be able to uphold the five fundamental ethics principles within the Code. The ICAS paper Moral Courage (published as part of The Power of One series of ethics themed papers) provides a more detailed discussion about this topic.
No matter an individual’s role in an organisation, if they suspect impropriety and do nothing, they could find themselves being guilty of condoning it, and could then be implicated in a potential scandal at a later date. You need to ask yourself: what could the impact be on my personal reputation? What could be the impact on my long-term career? On occasion, your career in the short-term may need to suffer in order to protect your longer-term future. Such decisions are not easy, but may need to be made to protect your personal reputation.
The old maxim of ‘if it’s too good to be true – then it’s probably not true’ comes to mind. Could you stand in front of a disciplinary committee, or a court, and explain your actions to a judge? Likewise, could you explain to an Annual General Meeting (AGM) of shareholders why you adopted a certain course of action, or explain on camera to the public at large? When faced with a difficult dilemma, these are usually good questions to ask yourself to help focus the mind and determine the ‘right’ course of action.
People are judged by their actions. It is recognised that the optimal decisions will not be made every time, but there is a need for individuals to seek to uphold the highest of ethical standards, and in so doing safeguard not only their own reputation but also that of their organisation.
Personal reputation is one of the main themes of The Power of One, ICAS’ business ethics initiative. The Power of One calls on all Chartered Accountants (CAs) to place ethical leadership at the heart of their professional responsibilities, to shape the culture and values of their organisations, to help re-establish ethics at the core of business practices and to rebuild public trust in business. Whilst The Power of One is primarily targeted at CAs, the values promoted by The Power of One are equally transferable to the broader business community. A professional’s reputation is their personal brand – it is how well they are regarded, and how they will be remembered. Reputation is everything.