Financial Data
Updated 29 Feb 2020

Why ethical organisations need ethical leaders

All too often entrepreneurs are so focused on getting their business going and growing, that they fail to consider critical business issues like governance, ethical operation, and the sweeping influence of their moral compass – their code of conduct – and the behaviour of their team. 

Lauren Durant and Brendan Powell, 26 May 2016  Share  0 comments  Print

All the answers to your unique business lifestage questions

While ‘lead by example’ may be a cliché – its relevance cannot be disputed – and as the role model for employees, if a leader’s behaviour is unethical, employees are likely to behave in the same way.

In a country where corruption, fraud and commercial crime regularly make headline news, it could be argued that organisations in South Africa have forgotten that good governance is good business, and running an ethical operation is in truth, an indicator of profitability and success.  

Ethical vs unethical behaviour

For the sake of clarity - a distinction should be made between what constitutes ethical vs unethical behaviour.  

Ethical business– the observation of legally and morally correct standards – includes operating in a way that is characterised by honesty, fairness and equity.

It’s about making good business decisions based on an established "code of ethics" that the company has developed and communicated to staff.  

Staff must understand and buy into the code and be very clear on the consequences of crossing the boundaries and operating outside of it. Small businesses and SMEs don’t always have an HR department to deal with such matters, but ignoring issues like this could ultimately cost the business more than if they had just prioritised it at the outset.

Related: Developing leadership ability

Unethical behaviouris when a stakeholder of the business (management or employee) acts in a way that contravenes the code and is considered morally wrong.

The range of behaviours that could be considered unacceptable include: misusing company time; abusive behaviour; theft (commercial crime); taking home some of the inventory or supplies, nepotism and lying to name but a few examples. 

Behaviour guidelines typically address topics such as harassment, work attire and language, accepting gifts from suppliers and associates, theft, among other issues. It’s equally important to have policies in place for the contravention of ethical behaviour and this must be supplied in writing along with the consequence for not following the predetermined codes of conduct.

Instilling (or inspiring) company values

When staff behave ethically even behind closed doors, when no is one watching – they have truly bought into the company’s values.  There are plenty of processes that are easy to implement at little cost – even for the SME – which will help foster a culture of accountability.

  • Include values in an employee handbook / induction pack.  Show new recruits you are serious about ethics by dedicating time to unpacking the code when they first join the company and set this session with the founder of the business.  All staff must recognise that the business considers ethical behaviour to be as important as operational performance – so include it in their job description – and build it into KPAs.  
  • Hiring recruits who mirror the values of the company is probably at the core of keeping teams on the straight-and-narrow when it comes to ethics. To ensure that only candidates with value systems aligned with those of the business are ever hired, introduce the subject during the interview process.  It could save trips to the CCMA in the long run.   
  • A culture where there are regular reviews of value systems will also help teams live and die by the company’s ethical codes.   
  • The code itself should always be visible, represented creatively, and placed strategically around the business so that it’s never out of sight. It’s also important to roll out team building sessions that reinforce the messages in a fun yet relevant manner. 

Related: How to enhance your warehousing and transit security

The cost of unethical choices

Effective management of ethical risks is a critical element of good governance. Failed corporate governance ultimately will result in problems being exposed, which if drastic enough, can end with a PR and legal nightmare, even tarnishing a brand beyond repair. Getting buy-in to the company ethics is a challenge for any business; and even more so for the time and resource constrained entrepreneur.  But to ignore it is an even greater risk!

Rate It12345rating

About the author

Lauren Durant and Brendan Powell

Durant spends much of her time with clients, understanding their needs and assisting in the development of cutting edge activations strategies. Parallel to this, she mentors members of the Isilumko team to be able to do the same – which makes sense in an organisation so customer centric. Durant is a firm believer in personal growth and in 2000 completed her MBA which she cites as one of her definitive moments. Another being her appointment to the Isilumko board of Directors at the tender age of 28. Durant’s biggest career hurdle is being an A-type personality in an industry where plan B is often a necessity. Durant’s life philosophy centres on ‘being happy first and the rest will follow’. Her resilience is one of her strongest points and she doesn’t bear a grudge. Durant leads by example and believes that by working hard and showing kindness she can overcome any obstacle. BrendanPowell has been with Isilumko Media since 2008 Powell leads from the front, and is known for his natural ability to motivate large teams of people, including leadership teams, to consistently reach goals and implement an organisational vision. Boasting excellent communication and training skills at all levels, and with an honours degree in theology and a background as an executive minister. Powell is a highly talented public speaker. He has a deep-seated passion for people and has a strong desire to see them flourish. Brendan believes that “effortless magic” happens when the right person is placed in the right position. He is widely regarded and acknowledged as an expert on the subject of experiential activations. Powell is passionate about his job and attributes his success to his ability to harness the skills of individuals in his team. He is a strategic thinker with strong implementation skills. In his spare time, Powell enjoys the outdoors and can often be found fishing, camping, gardening and motorcycling alongside his wife and two children.

Introducing the cash solutions for a growing business

Are your cash solutions supporting your growing business? Leigh Livanos, Head of Payments, Collections & Cash for Business & Commercial Banking explains how your cash solutions needs will evolve as your business expands.

Login to comment