If the study of ethics is as old as Socrates, business ethics is still in its infancy. Ethics in business was only generally considered during the Cold War era, although some robber barons saw this development as the antithesis of an entrepreneurial mindset.
Ethics was added to business degree syllabi in the 1970s and 1980s. And as business wrongdoings mounted, so did the interest in ethical practice in business. Into the 2000s, corporate malfeasance in the shape of the meltdowns of Enron, WorldCom and most recently the global financial crisis showed us all how shady practices were not just bad, but downright bad for business. Consequently, greater focus has been placed by business on ethics.
The rise of enterprises that put corporate social responsibility front and centre has also shown how doing good is good for business. Our feature story on ethics, What are the benefits of ethical business?, reveals how corporate giants are learning from emerging players and now run their businesses under the ethical banner: Ford is embracing eco-technologies and Visa has been praised for its financial inclusion policies. Investors, too, have a big appetite for ethical investment vehicles, which now make up 50 per cent of total assets under management.
Running a business ethically is not a comic book-style tussle between good and evil. An ethical ethos requires great leadership, says Professor Robert Wood, a director of the Centre for Ethical Leadership who is interviewed for our story. He believes that for an organisation be socially responsible, senior leaders must set the tone by walking the ethical talk and determining the ‘non-negotiables’ of acceptable behaviour.
Joe Rea, general manager of Boyne Smelters in Queensland and AIM’s 2015 Excellence Awards Manager Of The Year, typifies this approach to leadership. Rea, whose story stars in What is the secret to Boyne Smelters’ success? views ethics as a way to set ‘the moral compass’ for the company. This moral direction has paid off in spades for the operation’s safety record. The plant, which works around the clock, achieved a milestone of 365 consecutive days of safe operation.
4 quotes about ethical leadership
The first step in the evolution of ethics is an enlargement of the sense of solidarity with other human beings.