WHAT IS THE ROLE OF ETHICS IN BUSINESS?
What do we mean by business ethics? We mean a set of principles, rules and values which provide a framework for business decisions to be made. Ethics also draw on societal and personal morals and values, distinguishing the difference between ‘good and bad’ or ‘right and wrong’. Perhaps morality can be thought of as something that is personal and normative, whereas ethics is the standards of ‘good and bad’, as distinguished by a certain community or social setting.
Many would say it is the raison d’être of a corporation to maximise profits for investors. However, the growing environmental, social and governance (ESG) trend has created an expectation that companies will pursue ethical capitalism with a purpose. The increased focus that shareholders, investors, non-governmental organisations and the public are now putting on ethics means that not dedicating adequate time and resources to ethical considerations becomes a risky strategy.
As the fabric of civil society, at global, national and local levels, is increasingly challenged, the business community is facing more and new ethical dilemmas.
There is research that suggests that failures in corporate governance are fundamentally caused by a lack of personal morality, rather than deficiencies in the structural framework. Diversity and inclusion, investment and long-term commitment are now what stakeholders expect and investors reward.
The number and type of high-profile scandals suggest that the business world still has an issue with ethics. Recently, a class action claim against Lindt & Spungli alleged that high levels of lead and cadmium in dark chocolate were concealed. But is there not an ethical obligation to disclose?
Jan-Mar 2025 Issue
GSK
Aria Grace Law CIC