Page 228 - (DK) The Business Book

226 CREATING AN ETHICAL CULTURE

Fashion businesses use materials
and labor from all around the world.
Consumers increasingly demand
transparency about goods and policies,
so they can buy with a clear conscience.

wrong thing,” according to US
leadership expert Stephen Covey.
Faced with daily decisions about
the right way to behave, employees
have to know what “doing the right
thing” actually means. A company’s
policies covering everything from
safety to accepting gifts from
suppliers exist to ensure that people
understand how they are expected
to conduct business appropriately.

Driven from the top
Companies that prioritize an ethical
culture often select employees for
their values as much as their skills,
and ensure that new employees are the limits of law” and “rules of the relationships according to principles.
made aware of their role and game” that ensure “open and free These natural laws and governing
responsibilities, and also how things competition without deception or values are universally valid.
are done in the organization. Such fraud.” However, the 2007–08
companies are eager to ensure that financial crisis showed clearly that Ethical leadership
new staff both hears the company’s codes, laws, and regulations are not Typically, leaders in ethical
values and sees them affirmed in the enough to maintain ethical business organizations are not domineering.
actions of people around them. standards. Leaders with personal They are likely to have an open,
Such a culture has to be driven integrity are vital to enact and engaging style and to be good
from the top. US economist Milton encourage ethical behavior listeners, able to tune in to issues
Friedman famously said that the throughout an organization. By across the business. The company
social responsibility of business is espousing the company’s principles they create will have a clear
to increase its profits “subject to at every opportunity and at every structure with well-defined roles and
level, leaders can continually responsibilities, be transparent,
demonstrate their importance with promotion based on merit, and
within organizational culture. a well-communicated strategy, so
In Principle-Centered Leadership, that employees know what they
Stephen Covey describes trust, have to do and where they fit in.
We’re pioneers and respect, integrity, honesty, fairness, Leaders with personal integrity
we want to show that equity, justice, and compassion as are a powerful influence on others.
this model works, that it the “laws of the universe,” classing Numerous studies have shown
can become self-sustaining. them as essential values for ethical that good people can make bad
Ali Hewson leaders. Covey is best known for his decisions when acting in groups,
book The 7 Habits of Highly particularly in stressful situations.
Irish ethical businesswoman (1961–)
Effective People, in which he To avoid the risk of unethical
proposed that ineffective people try “groupthink,” the CEO has to set
to manage their time around the right tone for everyone in the
priorities, whereas effective people organization. Effective governance
lead their lives and manage their is critical, and relies on good