GUEN DONDÉ HEAD OF RESEARCH INSTITUTE OF BUSINESS ETHICS

Transcription

1 WHAT DOES ETHICS AT WORK MEAN TO EMPLOYEES? GUEN DONDÉ HEAD OF RESEARCH INSTITUTE OF BUSINESS ETHICS IBE 05/07/2018 1

2 ABOUT THE IBE The IBE was established in 1986 to promote high standards of business behaviour based on ethical values. o Advice o Forums o Publications o Research o Training o Education IBE 07/02/2019

3 CONTENTS CORPORATE CULTURE: WHAT IS IT? How to assess corporate culture through employees perceptions and what are the ethical risks for an organisation. WHAT CAN INFLUENCE CORPORATE CULTURE? What is the role of individual decision-making and how can this influence culture? HOW TO PROMOTE AN ETHICAL CULTURE? What can companies do to support a corporate culture based on ethics? IBE 3 05/07/2018

4 1. CORPORATE CULTURE: WHAT IS IT? IBE 05/07/2018 4

5 WHAT IS CORPORATE CULTURE? IBE 05/07/2018 5

6 WHAT IS CORPORATE CULTURE? Corporate culture refers to the beliefs, values and behaviours that determine how an organisation s employees and management conduct their business and manage relationships with individuals and groups with whom they have dealings with within and outside the organisation (stakeholders). IBE s definition IBE 05/07/2018 6

7 HOW OFTEN IS HONESTY PRACTICED AT WORK? The majority of respondents say that their organisation acts responsibly in all its business dealings with stakeholders. 70%! BUT IBE Sources: Attitudes of the British Public to Business Ethics 2018 (IBE, 2018) and Ethics at Work: survey of employees (IBE, 2018) 7

8 HOW ETHICAL ARE YOU? IBE IBE 07/02/2019

9 IBE 07/02/2019 ETHICAL RISKS Ethical Blindness: a person is unable to see the ethical dimension of the decision they are making. They would want it to be done this way Moral disengagement: a person is aware of the ethical aspects of a decision and actively choses to disengage from these and behave unethically. What they don t know won t hurt them

10 ETHICAL BLINDNESS IBE Source: YouTube (2009), Stanford Prison Experiment post-experimental review 07/02/2019

11 ETHICAL BLINDNESS: WHAT ARE THE RISKS UK Employees in the UK are more likely to have lenient attitudes towards ethically questionable practices compared to European average. IBE 20/03/2018

12 MORAL DISENGAGEMENT: MANAGERS ATTITUDES UK MANAGERS 33% of employees in the UK say that their line manager rewards good results even when they are achieved through ethically questionable practices (European average 27%) IBE 05/07/

13 2. WHAT CAN INFLUENCE CORPORATE CULTURE? IBE 05/07/

14 IBE 07/02/2019 HOW DO PEOPLE MAKE DECISIONS? HOMO ECONOMICUS Well-defined preferences and decisions are always consistent Decisions maximise all alternatives Makes rational decisions based on strict logic Narrowly self-interested and pursues monetary wealth HUMAN Not sure of preferences Often picks easiest route (satisfice) Limited information and mental shortcuts Subject to guilt, fairness, social comparison, desire for luxury Intuition and gut feel Influenced by context

15 BEHAVIOURAL ECONOMICS It fuses psychology and economics to gain a better understanding of human behaviour and decision-making. This is useful to predict: Consumer s behaviour Investor s choices Ethical/unethical decision-making BEHAVIOURAL ETHICS: It seeks to understand how people behave when confronted with an ethical dilemma. It identifies key signs or decisionmaking patterns that lead to ethical risks. IBE 07/02/2019

16 IBE 07/02/2019 SURVIVING IN A COMPLEX WORLD HEURISTIC A mental shortcut that helps us make decisions quickly. PROS CONS Quick reactions in difficult situation Complex reality tackled in a relatively simple way Allow us to function without getting stuck in too many details Certain situations require more complex reasoning Heuristics might result in cognitive errors or mistakes Decisions about ethics are subject to similar risks and biases.

17 THINKING FAST AND SLOW We have a Two System way of thinking. Most of us identify with System 2 thinking, but we spend more time in our daily lives engaged in System 1. SYSTEM 1 - FAST Snap decisions and jump to conclusions Always on and producing fast decisions and judgements for everyday decisions Automatic, unconscious SYSTEM 2 - SLOW Analysis, problem solving and deeper evaluations To tackle something unexpected or to make a conscious effort to gain a critical view. Complex decisions, conscious IBE Source: Daniel Kahneman (2011), Thinking Fast and Slow 07/02/2019

18 EXAMPLE OF SHORTCUT: CONFORMITY BIAS The conformity bias is the tendency people have to behave like those around them rather than using their own personal judgment. Do what the majority of your species does! IBE Source: YouTube (2013), Prudential: everybody s doing it 07/02/2019

19 IBE EXAMPLE OF SHORTCUT: CONFIRMATION BIAS 07/02/2019 Confirmation bias is the tendency to search for, interpret, favour, and recall information in a way that confirms one's pre-existing beliefs or hypotheses. Wilful blindness occurs when individuals fail to see, acknowledge or act on problems in plain sight. It s often unconscious: we fail to see evidence against our beliefs and mental models.

20 3. HOW TO PROMOTE AN ETHICAL CULTURE? IBE 05/07/

21 IBE WHAT CAN COMPANIES DO? 07/02/2019 Doing the right thing needs to become our instinctive reaction (our gut feel ): communications and training People are likely to put aside ethics if they think this is what their boss/their role requires: tone from the top is important People determine the appropriate behaviour by looking around: ethics need to part of the incentives: reward, recognition and promotion systems Employees need to be trained to recognise ethical dilemmas that require more critical thinking (System 2).

22 Ethics programme THE IBE BUSINESS ETHICS FRAMEWORK Ethical Values Together with the business values, in the purpose, business model, strategy, governance, ethics policy and decision-making process in the organisation Embedded into organisational culture through Code of Ethics Creating an open responsible culture which influences behaviour and conduct IBE 02/05/2018

23 THE ETHICS PROGRAMME UK Code of ethics Ethics Training Speak Up line Advice Helpline IBE 05/07/

24 DO ETHICS PROGRAMMES WORK? In UK organisations with an ethics programme, employees say that: Honesty is practised more frequently (87% vs 76%) The organisation acts more responsibly in all its business dealings with stakeholders (85% vs 54%) They are more likely to say that their line manager explains the importance of honesty and ethics at work (77% vs 13%). HOWEVER! They are more likely to say that their line manager rewards good results even when achieved through ethically questionable practices (48% vs 8%).! They are more likely to have been aware of misconduct (26% vs 15%) IBE 05/07/

25 A SUPPORTIVE ENVIRONMENT TONE FROM THE TOP Ability of managers to set a good example of ethical behaviour, explain the importance of honesty and ethics at work and support employees in following the organisation s standards of behaviour. STAKEHOLDER ENGAGEMENT Whether an organisation discusses issues of right and wrong at team meetings, lives up to its stated policy of social responsibility and acts responsibly in all its business dealings. ADDRESSING MISCONDUCT The ability of an organisation to discipline employees who violate its ethical standards. IBE 05/07/

26 CORPORATE ENVIRONMENT IN THE UK Tone from the top Stakeholder engagement IBE 26

27 HOW IMPORTANT IS WALKING THE TALK? In organisations with a supportive environment, employees say that: Honesty is practised more frequently (93% vs 62%) They are less aware of misconduct (21% vs 48%) They are more willing to speak up if they become aware of misconduct (79% vs 57%) They felt less pressures to compromise their organisation s ethical standards (86% have not felt pressured vs 67%) IBE 05/07/

28 SPEAKING UP TO PREVENT WILFUL BLINDNESS IBE 05/07/

29 GOOD NEWS? MISCONDUCT AT WORK Awareness of ethical violations IS IT REPORTED? More employees speak up: What type? People treated inappropriately/unethically 48% Bullying/harassment 40% Safety violations 35% Why? I felt it might jeopardise my job 33% I did not believe that corrective action would be taken I felt I might alienate myself from my colleagues 26% 26% IBE 05/07/

30 WHAT IS THE ORGANISATIONS RESPONSE? SATISFACTION WITH PROCESS ARE ISSUES ADDRESSED? Of those who do speak up, how many are satisfied with the outcome? 59% of UK employees who have been aware of misconduct and raised their concerns report that they are satisfied with their organisation s response (51% European average) Respondents who believe that their organisation disciplines employees who violate ethics: Only 59% of UK employees believe their organisation disciplines employees who violate its ethical standards (53% European average) IBE 05/07/

31 CONCLUSION Ethics Values Behaviour & Culture Trust & Reputation Conduct IBE Financial & Operational Performance 07/02/2019

32 Doing business ethically, makes for better business THANK YOU! IBE 05/07/