You only have to have watched the news in recent years to realise the importance of being ethical in business. Corporate wrongdoing and scandals can wipe millions off the value of the business as well as wreck reputations that have taken decades to build.
Lots of organisations have rules, regulations and values statements governing their employees' behaviour. But rules and values statements are clearly not enough.
There are many elements that contribute to an ethical culture but by far the most important is ethical leadership. Leaders have to demonstrate their commitment to ethics in actions not just words. So many managers send mixed messages to their people. For example they talk about the importance of ethics but let their best salesman get away with being less than ethical because he is the biggest revenue earner in the company.
Top management's responsibility is clear - they are ultimately accountable and so need to ensure that the company does the right thing. However, in practice, everyone needs to take responsibility for ethical standards to ensure that they and others do not get their organisation into trouble.
In a nutshell, there are two good reasons for you, as a manager, to build your ethical know-how:
To protect yourself from making a decision that could get you or your company into trouble.
To make yourself more marketable. A good grasp of the subject is likely to become more and more in demand as organisations become increasingly interested in ethics.
The question is, what exactly do you need to do? If you manage other people, consultants or suppliers there are six essentials to being an ethical leader (and I use the term 'leader' in a very broad sense as many people are leaders even though they do not have the job title or status):
Take responsibility. Ethical leaders take personal responsibility for making sure that their part of the organisation is ethical. This includes making it clear to people what standards are required and that no transgressions will be overlooked.
Be honest (with yourself and others). Candour is the quality of being truthful, straightforward and honest. It is not just about telling the truth it is about telling the whole truth. Some people are adept at telling the truth whilst omitting information knowing they are giving an impression of something while meaning something else. This is selective truth telling, it is not candour. If the boss is honest it does not necessarily mean that the employees will be honest but there is a far greater likelihood than if the boss is less than honest.
Be transparent. The usual definition of the word 'transparency' in the business context is to do with full disclosure of financial information to investors. However, it is about much more than compliance and regulation. It is about open communication and not hiding information. True transparency can only occur in a high-trust culture. Bosses need to trust employees with data that they wouldn't want to get into the hands of competitors for example. A manager who trusts his or her people and is transparent and who gives the real reasons for decisions (rather than withholding information or relying on 'spin') will breed a culture where transparency and openness is not valued.
Challenge wrong-doing. This sounds so obvious but doesn't always happen because people are too busy and let something go that they should actually challenge. Quite often they don't challenge because doing so means having an uncomfortable conversation and few people relish that. However being prepared to do so is at the heart of challenging potentially unethical behaviour.
Increase your knowledge of ethics at work. Being ethical is not just a matter of understanding and being clear about your own moral values. That is certainly part of it. But it is also a question of acquiring certain skills and capabilities including being able to identify an ethical issue in the first place, the ability to have a tough conversation and the knowledge of the right questions to ask in order to tackle an ethical issue and arrive at the best decision.
Become a role model. Being a good role model is about actions as well as words. Doing the five things above will lead to you becoming a role model and thus creating a culture and context where people are more likely than not to care about doing the right thing.