Despite commentary that companies have responded well to the pandemic, with greater concern for employee welfare and a renewed interest in sustainability, the public is not entirely convinced that business is “ethical”.
Research by the Institute of Business Ethics finds that 42% of those polled in an annual survey consider business “unethical”, against 40% who say it is. And that 40% is down from 2020, when business received a 59% thumbs up. An “all-time low”, according to the IBE.
The nail-biting result may leave many wondering what happened to the reputation of business during 2021. There is, however, some good news. While business may lag behind charities—who garnered a 67% approval rating for their ethics—it remains ahead of the media (yours truly), which mustered only 23%, and politicians who scored a dismal 20%.
Views of business are complex and there are many aspects on which the corporate world can be judged, although that too produced odd results. It is not the environment and climate change that heads the list of concerns about business—that came in second place, with 29% of those questioned saying it was a “top five issue” to be addressed. No, the leading bugbear for people remains corporate tax avoidance, on 47%. In third was bribery and corruption, 27%, and executive pay was fourth with 23%. Work–life balance was number five on 17%.
Other ethics surveys
But the focus must be the decline in the number of people who consider business to be ethical. That will be a conundrum for many observers, including the IBE, which says it will return later this year to test opinions again.
The slip appears to run counter to other surveys, including the Edelman Trust Barometer and the IBE’s own Ethics at Work 2021 survey, which saw 57% of employees in companies with an ethics programme say standards in the workplace had improved since the pandemic. Fewer than one in ten said standards had worsened.
In the meantime, the IBE says, it may be best to focus on how business fared against other institutions of civil society. Given recent controversy, surrounding both politics and the media, it may be no surprise that business has fared well against them, even while losing some of its support year on year.
That said, the IBE says it seems there is work for business leaders to do when it comes to the public perception of ethics. “It seems … that business must redouble its efforts to take the opportunity of improved employee trust following the pandemic to secure the trust of the British public as a whole,” it says.
An internal view of corporate ethics
The IBE is not the only organisation to find worrying news about business ethics. Recent research has revealed concerns about the treatment of ethics inside companies. A survey of 750 companies in 90 countries by the advisory firm Principia found that less than half have established “board oversight” of corporate ethics and only 42% undertake mandatory ethics training for employees.
While business leaders are happy to say ethics are a fundamental facet of corporate leadership, clearly many are slow at putting policies in place.
One way the pandemic may have changed views could be through a perception that businesses and their employees would behave badly when faced with crisis. The Ethics and Compliance Initiative, a US organisation, produced evidence that suggest that the stress of firefighting during the pandemic could push employees and their managers to compromise ethical standards. The report found that on average only 14% of employees globally could say they worked in an ethical culture. This was accompanied by rising levels of retaliation against employees who blow the whistle on misconduct.
Something has clearly shifted in public attitudes to business ethics in the UK, but it may be too early to say exactly what. Until then boards may wish to keep watch on ethics in their companies and how they develop.