Organisational Ethics Part 1

In the previous blogs, I introduced you to THE CONCEPT OF CORPORATE GOVERNANCE and ETHICAL LEADERSHIP BY THE GOVERNING BODY. In the next two blogs, I will be discussing organisational ethics, and I will be interviewing an expert in this field, Dr Janette Minnaar-van Veijeren, founding director of ProEthics (Pty) Ltd. During my corporate career as the company secretary to the social and ethics committee and the chairperson of the ethics task team, I had the privilege of working closely with Dr Minnaar-van Veijeren as a corporate consultant and can highly recommend the services of ProEthics.

 

Janette obtained her LLD, LLB and BLC degrees from the University of Pretoria, where she was admitted as an advocate of the South African High Court in 1991. Her social contributions include serving as a director on the board of the Ethics Institute, serving on the SA National Anti-Corruption Forum (NACF), mentoring young professionals, and many more. As a true expert in her field, Janette has had the privilege to train the boards of some of the most successful companies in South Africa.

 

I hope that you will enjoy this interview and gain some valuable insight.

 

  1. Why did you start ProEthics?

I started ProEthics because I am passionate about ethical behaviour. As a lawyer, I realised that policies and rules do not always encourage the right type of ethical conduct and that there was a gap. Many companies with good intentions, who want to do the right thing, do not know how to do so. We can assist with practical advice and real-life know-how to implement ethical imperatives and initiatives.

 

  1. How important is it for today’s boards to demonstrate their commitment to corporate governance and ethics?

I believe that it is more important than ever, especially facing the economic pressure that we are experiencing. If we are not seen to be ethical leaders, we are at risk of staff doing whatever suits them, and we end up with companies that are not profitable. There is ample research that shows that it pays to be ethical. It contributes to sustainability, profit, good work relationships, a sound reputation, etc. These companies can attract good talent and retain it because good people will leave bad companies.

 

  1. What are the most common ethical issues in corporate companies?

When companies are under financial strain, it is very tempting to bend the rules. This can apply to contracts or tenders or even go as far as committing corporate crimes such as corruption. There is, however, no right way of doing the wrong thing. Something else we come across quite often is the abuse of power. People who are in positions of authority can easily use that to either promote their personal agendas to enrich themselves or to intimidate staff. When a staff member challenges this behaviour by a leader, they are often threatened and victimised. In worse case scenarios, they could get physically hurt or dismissed. A typical issue is disrespectful behaviour, communication, or language. Another is discrimination in terms of not valuing different opinions and views and not treating staff or stakeholders with dignity. The moment this happens, employees become disloyal and disengaged, and the organisation will not be as successful as it could be.

 

  1. What is the relationship between corporate governance and ethics?

A straightforward way to look at this is to see the law, corporate governance, and ethics as a three-legged chair. They are interlinked, and we need each of these three pillars to establish a healthy organisation or for that matter, a broader society. Corporate governance is how we direct and control the affairs of an organisation – the structures, procedures that we put in place to ensure long-term success, and profit. The law tells an organisation what it is allowed or not allowed to do. Corporate governance or the policies and procedures that we implement in an organisation help us to achieve that. The best set of organisational rules and government policies will not support an organisation to be successful if the culture is not ethical. Ethics sets the highest standards for organisations to attain or strive for. In simple terms, being ethical means that the company, its leadership and its staff must do what is right, do what is good and do what is fair, be responsible in their behaviour, and consider others.

 

  1. What are the likely consequences for an organisation that routinely sidelines or completely ignores the importance of effective governance and ethics policies?

In worst-case scenarios it can lead to dishonesty: crimes such as corruption, bribery, fraud, price-fixing, etc. are all against The Prevention and Combating of Corrupt Activities Act or the Competition Act. A company found guilty in terms of offences or transgressions of these acts may be fined, and if it is a criminal offence, the leaders and managers could be incarcerated. Another consequence is the reputational damage that an organisation could incur. It is very hard to restore trust in the company among the community and stakeholders. We have seen some high-profile cases where dishonest acts virtually destroyed companies. Having effective governance in an organisation and properly implemented ethics policies helps organisations to prevent these failures. Leaders and employees are held to task, kept accountable and must live by the values of the organisation. These values include being responsible, accountable, honest, having integrity, striving for excellence, and treating others with fairness and as equals.

 

  1. What are the benefits of having a good ethical culture?

A good ethical culture ensures that people get along. There is often better teamwork, more tolerance and better communication, which leads to more transparency, honest actions, feeling valued and appreciated, and being more respectful to one another. This often improves service delivery and, quite often, profit. When things do go wrong, occasionally, when there is an ethical culture, we can recover and be able to protect our good name better.

 

If you want to build an ethical culture, ProEthics can assist you with ethics training, ethics surveys, ethics investigations, implementation of ethics policies and frameworks and so on. Okina can assist with setting up a social and ethics committee, relevant task teams, the drafting of agendas, checklists, terms of reference, and committee administration. For more information, you can contact ProEthics on www.proethics.co.za and Okina Company Secretarial Services on www.okinacosec.co.za or info@website15.pixelreview.co.za.

 

I hope that you are inspired to embrace and implement ethics in your organisation. Join us next week for PART II of our blog on organisational ethics.

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