BM Do you see a radical upward shift in doing business with ethical values in present scenario?
AD Business ethics are derived from social values. They lay down the norms of behaviour for the business. When we look at the business scenario today, where a new model or platform of doing business is created every now & then, the legal provisions governing trade has become hazy. Hence, there is a tendency to exploit these loopholes to stay ahead. There have been businesses, which are being fuelled by selfish ambition, the desire to grow exponentially and having a perception that the system can be manipulated. Few organisations face the dilemma of maximising the profits for its shareholders versus its responsibility towards society and customers.
Given the speed of innovation and technological disruptions, many companies are finding it difficult to sustain the pressure of change hence number of cases of unethical business practice are coming to light these days. However, I think the overall positive mood in the economy clearly suggest that Ethics in business continues to drive growth and employee well - being besides shareholder benefit. In the past, it was assumed in most companies that ethics was a matter of individual conscience. Today, companies have no choice but to have progressive and engaging frameworks that are designed to encourage ethical behaviours.
BM Is there a perception building around that business profits can only be accumulated with unethical practices? If yes, how organisations can counter this?
AD I don't think there is any such universal perception. Wherever it exists, a major reason for such misperception about ethics in business is the vagueness regarding the meaning of the word ethics itself. I get worried about such perception, when it transpired recently, that only two Indian companies have been recognised in top 135 organisations in the list of World's Most Ethical Companies by a US based Institute.
While there have been numerous cases of unethical business practice which have come to light in the recent past, I don't think unethical ways of doing business is being perceived as a norm of making profits. All world class organisations which have been able to maintain their supremacy inspite of economic, political or social turbulence over the years have been able to do so because of a strong fabric of ethics and values. This will continue to be the trend in future. All such organisations take pride in such ethical business practices and their employees standout as ambassadors of the same.
In most progressive organisations, there is a documented Code of Conduct and all employees are expected to act in accordance with the highest standards of personal and professional integrity, honesty and ethical conduct, while working with the Company, its subsidiaries or at any other place where employees represent the Company. It's a part of an employee's job, and his/her ethical responsibility, to help enforce this Code, where they are expected to be alert to any possible violations.
Organisations should also implement and promote policies like the Whistle Blower policy, where any such breaches of the Code of Conduct & Ethics can be brought to light.
BM What is the role of HR in instilling business ethics in employees?
AD Human Resources play an important role in institutionalising the core values of the organisation through enablement of various policies, practices, programs and initiatives, which needs to be driven in a transparent manner, which exuberates an authentic culture. This is a continuous process of communicating, enforcing and rewarding the right behaviours which constitute the core of the business ethics in an organisation. It starts right from the hiring process besides ensuring that the policies, performance management process and the reward philosophy are in alignment to the Organisations' core values. HR is the conscience keeper and has to closely support the leadership team in nurturing the right culture which benefits the organisations' performance and reputation in the long run, besides shareholder confidence and satisfaction.
BM Should HR act as employees' champion or custodian of employer's business interest in times of ethical crisis?
AD HR plays an important role at such times by ensuring that a fair process can be followed besides activating the various channels of communication. This helps in addressing employees' concern and queries, while ensuring that there's no adverse impact such as exodus of talent, spread of rumours, drop in productivity etc., which causes a long - lasting damage to the Employer brand. Hence, in times of ethical crisis, the HR Function needs to adopt a balanced approach, ensuring business is done within the ethical framework and at the same time protecting the organisation's business interest. Needless to mention that this is a very challenging task and requires courage and high level of integrity.
BM What are the challenges for HR fighting unethical practices in organisations?
AD With the advent of newer technology, AI, Machine learning etc., various industries are undergoing a rapid change in the way business is done which is leading to emergence of new business models. In such an environment of rapid change and high competition, there are risks of organisations attempting to adopt methods or practices which may violate the norms of business ethics. Hence, it can be a challenge for HR to continuously keep an eye on such trends and ensure that the organisation treads on the right path even at the risk of being affecting revenues or profitability. This would require strong and fair communication with the stakeholders within the established framework, highlighting concerns in a timely manner and ensuring corrective action at the earliest so that employees and various stakeholders stay protected always.
BM What is the way forward for HR in performing as strategic business partner in unethical business organisations?
AD Setting up of a robust framework and processes to drive organisation values and ethics is extremely important. Such a framework must have the buy-in of the leadership team and communicated within the organisation effectively with various reinforcement mechanism. Leadership should always insist on doing business with stringent ethical norms in place even if that means sacrificing a few percentage points of growth. They should set the standards with their own actions as models of rectitude. Such measures must be a part of the organisation's strategic intent and needs to be reviewed by the Board as an integral element of corporate governance.