Expert Opinion

Within the business community and at governmental levels, ethical business practices are gaining an increased focus. This has been the result of a number of significant scandals that have rocked the international business world in recent years. The challenge to ensure ethical practices within the business sphere is one that cannot be ignored. Today there is an increased demand for transparency, greater governmental regulation, more shareholder involvement, and greater accountability to the public. The business world has suffered significant scrutiny by the media and the credibility of many has been affected. Sherrie Niedermeier and Liz Rhodes (2002) business consultants in the US, write that "Organisations must transmit the message, we can be trusted" if they want to remain viable and "creating a culture of credibility is a necessity for any organisation that wishes to increase sustainability".

The growing importance of ethics in business is also highlighted by changes in the US to the government's key and longstanding initiative to improve US business performance, the Malcolm Baldrige National Quality Award Programme. The criteria of this programme has been generally adopted internationally as a benchmark of best practice and has been changed to include criteria specifically addressing this whole ethics issue. In 2003, Category 1 of the criteria, pertaining to leadership, was modified to include item 1.2.a.3 - Ethical business practices. This item requires companies using the criteria to describe, and have in place actions, to accomplish ethical business practices in all stakeholder transactions and interactions.

The advantages that are to be gained from formally practicing in ways that adhere to ethical principles include:

• The development of company documentation that guides and informs staff members on their proper conduct both during normal business interactions and during ethically-challenging situations;

• A better understanding by staff members of their responsibilities, and an ability to align their values with those of the organisation;

• The assumption of an appropriate level of accountability by staff members in identifying and managing business risks;

• The facilitation of fairness and moral management in business activities;

• Increased trust from, and between, internal and external stakeholders.

• Increased employee satisfaction;

• A more open-minded organisational culture in which the interests of the employer, employees, customers, suppliers, and other stakeholders are protected;

• An enhanced reputation within the community that helps attract new staff and customers, increases both public and community relations, and the potential for improved financial performance; and

• An enhanced reputation with competitors, governmental agencies and financial institutions.

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