In a marketplace where competition is fierce, businesses that prioritise ethics and social responsibility stand out from the crowd, earn customer loyalty, and build long-term success.

Ethically run businesses are sustainable, impactful and transformative. But ethics should not be confused with just legal compliance.

For many new companies, start-ups and those on the lower end of the maturity scale, ethics is often conflated with values and vision statements. But companies today need to go beyond that and implement tactical measures that will move the needle beyond good intentions.

To better understand the roadmap that companies need to take, Integrity Matters in partnership with People Matters conducted a webinar on the topic “Ethics by Design: Steps to Building an Effective Ethics Programme,”

Speaking about the shifting trends in ethics and business, Yatish Mamniya, Partner, Integrity Matters noted that “the median ethics report volume for 1000 employees was 7 per cent in 2018. During the pandemic in 2020, it went down to 2.3 per cent. And now we’re at 5 per cent.”

The research offers us a glimpse of how the culture of speaking up may have changed over the past few years, as businesses navigate new terrains of the modern workplace.  

What’s changed?

While businesses have faced similar challenges post-pandemic, there’s increased complexity that the hybrid workplace has brought to the fore.

“The biggest challenge is to do with belongingness,” said Anjali Raghuvanshi, Chief People Officer, Randstad India. “How do you cascade an organisation's values and principles to people when you don't see them every day? Also, in the hybrid workplace, it's the individual or the self that tends to take precedence in ethical matters,” she added.

The rise of social media, and the ever-present cell phone, which could also be used to record anything anytime are changing how industries and customers especially in the services sector are capturing ethical violations. It is also the cause of tremendous stress and concern.

“Data privacy is emerging as a key focus area even as there’s a massive technology and social transition. It’s a continuous concern. As a country that’s traditionally had high power distance, how do you enable reporting of ethics complaints? ” asked Dr Sajiv Madhavan, Business Excellence – Head and Chief Risk & Sustainability Officer, Tata Elxsi

As the modern workforce adapts to changing dynamics such as remote work and societal shifts towards issues like climate change, gender equality, and diversity, equity, and inclusion (DEI), it is crucial for companies to proactively reassess their process and system designs. Failing to do so risks falling behind in a rapidly evolving business landscape.

Framework to navigate change

Dr Sajiv shared a multi-dimensional approach to designing an ethics framework. “If we look at it from the perspective of human capital, financial capital, and social capital, it can provide a better understanding of what needs to be done,” he noted.

In terms of human capital, there’s a need to ensure that there are adequate learning and communication methods that reach all levels of the organization, including external parties where necessary. Third-party involvement is crucial in identifying blind spots in the system.

The next perspective is financial capital. By allocating budgets and exploring new revenue streams, organizations can send a message that ethics are not just a box-ticking exercise.

Finally, social capital is vital in navigating the grey areas of ethical issues. “Celebrating successes and sharing experiences through storytelling can foster a sense of responsibility and accountability among members,” he said.

The importance of empowerment

“At the leadership or ground level, it's not enough to simply create platforms without actively empowering employees and taking action to address issues that arise. Empowerment is key in enabling employees to speak up and report concerns, which requires creating a culture of trust and support throughout the organization,” Anjali said.

Ensuring access to platforms and demonstrating a sense of urgency in addressing complaints can motivate employees and improve engagement.

It is crucial to communicate the impact of complaints and discuss how to deal with them in the future.Training and enabling employees to understand ethics and morality is essential, but it shouldn't just be a checkbox to tick, the leaders noted.

There needs to be ongoing dialogue and accountability throughout the organization, not just at the leadership level. Line managers should also have accountability and responsibility for ethics, and there needs to be a shared sense of accountability throughout the organization. When all these interventions are implemented, they can have a clear impact on the organization

The role of third-party support

Yatish noted that a whistleblower hotline is a valuable tool for businesses to collect employee observations on any ethical wrongdoing or noncompliance before it becomes a larger risk to their interests.

A hotline offers a confidential and anonymous reporting option for those who are unable to turn to their line manager or internal function for whatever reason, providing an alternative to remaining silent or reporting externally to the media or regulators

“Having a hotline goes beyond the minimum legal requirement of having a whistleblower policy and gives employees confidence that their concerns are important to the organization. It also addresses their fear of retaliation by giving them the option to remain truly anonymous.” Yatish said.

However, the whistleblower hotline by itself does not create a culture where employees feel that speaking up is welcomed. This initiative succeeds when there is genuine support from the leadership, especially the top leader. Transparency is crucial, such as sharing hotline data with employees and creating case studies of success stories to build confidence and trust in the system.

Lasting transformation

“Culture is not solely the responsibility of leadership, but rather shared among all stakeholders including employees, vendors, suppliers, and clients,” Anjali noted. While training programmes are important and necessary, there is also a need for open dialogue around ethics.

To truly embed ethics into the fabric of an organization, it must be a year-round priority, not just a one-time event. By consistently speaking out about ethics and encouraging whistleblowers, organizations can ensure that ethical behaviour is a top priority. While this may seem like a simple step, it is often overlooked in favour of other priorities.