The main culprits of weak ethical cultures
By Prof Leon van Vuuren and Dr. Paul Vorster, Ethics Institute
The Ethics Institute recently conducted research to determine the extent to which organisational ethical culture contributes to ethical failures. The survey was done in 19 medium to large private sector organisations across all industries. A total of 2791 employees participated in the survey.
It was evident from the research that organisations with weak ethical cultures do not adhere to principles of good governance and ethics. It can be argued that there is a causal link between ‘strong ethical cultures’ and ‘good performance’. This is especially true if we consider the financial damage that organisations with poor ethics have suffered in recent times.
The King IV report on Corporate Governance indicates that corporate governance is the exercise of ethical and effective leadership by the governing body towards the achievement of an ethical culture, good performance, effective control, and legitimacy. Progressive thinking that occurred between the 3rd (2009) and 4th (published in 2016) King reports on corporate governance resulted in a governance principle that evolved from simply ‘managing ethics in organisations’, to the ‘establishment of an ethical culture’ as a key component of ensuring an effective organisation.
Our research indicated that an ethical culture is characterised by a combination of the following components: ethics accountability and responsibility; the commitment of non-managerial employees, middle management and leadership (senior management) commitment to ethics; ethics talk; the ethical treatment of people; and ethics awareness in the organisation.