As a personal investment adviser who champions business ethics the first question I am usually asked is whether there is a cost to being ethical. The evidence is that you can do well by doing good. The bottom line is highlighted by academic research in 52 studies (involving 33,000 observations) of the relationship between corporate social and environmental performance and corporate financial performance. The conclusion was that there has been sufficient research to prove a positive association between the two.
More locally, AMP in Australia divided the shares of 350 companies into two equally weighted portfolios according to their ranking for corporate responsibility. Over four years the highly ranked companies outperformed the low ranked companies by five percent, and over 10 years they outperformed by three percent.
Businesses that are ethical leaders attract and retain the best employees, increase sales and customer loyalty, strengthen relationships with suppliers, enhance corporate citizenship and goodwill within the community and perform better financially for shareholders. Ethics clearly is enlightened self-interest for business.
Reflecting this increasing understanding is a strong revival of interest in ethics education. In May 2007, The Economist discussed how in 2002 American business schools in particular took some of the blame for the corporate scandals at firms such as Enron and WorldCom. It was even suggested that, with former Enron boss Jeffrey Skilling a star of the Harvard Business School in 1979, and many other corporate villains boasting MBAs, the way to solve corporate America's ethical problems was to fire everyone under 35 with an MBA!
Post Enron, business schools have started to teach more ethics--for example, the Harvard Business School, has introduced a popular new course in "Leadership and Accountability". The University of Auckland Business School now offers a two-day short course on ethical leadership.
Yet many people wonder whether ethics can be taught. The ethics learned in our youth are not immutably etched in our character. The formation, refinement and modification of a person's ethics--the attitudes and beliefs that motivate conduct--is an ongoing process that continues throughout one's adult life.
The ethical leadership training I offer provides insight to the literature, case studies and examples, opportunities for reflection and a deeper understanding of business practices. It includes creating ethical leadership action plans to improve your triple bottom line. Participants create individual and organisational ethical and sustainable development scorecards as roadmaps for holistic corporate governance and building an ethical corporate culture that engages and inspires staff and other stakeholders. …