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Building Ethics

“The need to build a corruption-free corporate has never been clearer. The 2G, Satyam scams have opened our

“The need to build a corruption-free corporate has never been clearer. The 2G, Satyam scams have opened our eyes to incorporating a more ethical corporate policy, to get gains in the long run.”

I have often pondered on whether adults can be taught ethics. As per crime triangle, a person commits a crime when three factors are present – opportunity, reward and rationalization. Hence, if the opportunity is available with a lucrative reward, psychologically a person can rationalise a crime. Due to this, in context of India, teaching business ethics is a seemingly impossible task. The psyche of the society shows that corruption is an acceptable way of getting ahead in business. The 3.3 rating in Corruption Transparency Index indicates that people are unwilling to take a corruption and crime-free road. In their minds there is no positive take-away or reward for becoming honest and ethical. Hence, the challenge is to change CXO’s and employees’ perception about business ethics through promotion and prevention tactics.

Every dark cloud has a silver lining. In light of recent corruption scandals in India, corporate honchos are now concerned about governance issues. More and more CXOs are worried about the impact of such scams on their economic performance. In the scams, Central Bureau of Investigation is investigating a few well-known corporates – ADAG, Tata, Essar, Unitech, Cisco etc. Corporate bigwigs have finally acknowledged that they are a part of the problem.

The business heads realisation that both the supply and demand side parties are responsible for corruption and unethical behaviour can down-rail economic growth of the country is a positive sign for business ethics managers in India. Finally, they can get budgets for business ethics programs and trainings approved. It is good to strike while the iron is hot. Here are my top three focus areas for improving an ethics program

Build ethical culture into business processes and strategy

One of the business attitudes in India is that business cannot be done without paying bribes, hence receiving kickbacks is justified. The mindset is that an ethics program is not practical as business will suffer. For business growth, some compromises need to be done. This thinking makes a code of conduct a document without much strength. Ethical behaviour is considered insignificant in evaluating managers’ performance.

Hence, the need of the hour is to build ethical culture as part of the business strategy. Processes for monitoring ethical behavior need to be implemented. For example, performance appraisals of employees should incorporate bonus points for the ethical means adopted to meet targets. If unethical methods are used to achieve targets some penalty points should be awarded. In recruitment itself, reject candidates who have falsified information even slightly.

Next, in a few cases senior managers formulate strategies considering the political connections and propensity of politicians to accept bribes. Ethics managers must change this attitude of senior managers. Do this by assessing growth and risks on parameters of clean business operations. Present a business case to senior management emphasizing the political, legal and reputation risks in case unethical practices are adopted for implementing business strategies.

Change Mindset of Employees

In India, even a youngster will tell you that it is practical to be corrupt.

If a person speaks of ethical behavior, the person is most likely to be viewed as an idealist with their head in the clouds. This cynicism makes it difficult to implement an ethical work culture.

India has a huge number of cynics. Unfortunately, the business cost of this cynical attitude is never analyzed by organisations. Organisations need to give ethics training to change perceptions and thinking. Providing classroom training or e-learning is not sufficient. Ethical training should involve group discussions, case studies, brown bag sessions and 1 to 1 meetings with senior managers to emphasize the importance of ethics. Secondly, ethics managers believe that once training is given their job is done. This thinking is incorrect. They should implement measurement and evaluation methods to judge the impact of training in employee behavior and decision-making. Lastly, ethics training is an ongoing process, not once in a blue moon session.

Make Code of Conduct relevant

In my opinion, most of the organizations have a code of conduct that employees sign at the time of joining the organisation. New recruits receive a brief overview of expected business conduct in the induction sessions. However, rarely organisations’ code of conduct is a living document. It is not unheard of that the code of conduct is too old and policies mentioned in it are not complying with the prevailing business and legal laws. The situation is that nobody bothered to update it regularly. Hence, these documents are not taken seriously.

In my view, this is a good time to review the code of conduct and implement the policies properly. For example, although organisations have sexual harassment policies, India reports one of the highest cases of sexual harassment. As per a recent report, India is the fourth threatening country in the world for women. This clearly indicates that most organisations prohibit sexual harassment only in theory. As the procedures for filing a legal case are long drawn out with high social harassment, organisations may not feel the need to implement the policies. This definitely harms the ethical culture of the organisation and the business environment of the country.

Closing thoughts

To make Indian organisations globally competitive at par with the multinationals building an ethical culture is a necessity. The war of talent is won by organisations that provide a comfortable and secure work culture to employees. Multinationals invest in organisations where they are sure of the ethics of the management teams. Customers prefer organisations fulfilling their corporate social responsibility. Look from any lens, adopting ethics pays in the long-run. This is the right time to do some internal selling and get management commitment for building an ethical work culture.

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