Provided by George S. May International Company 

 BUSINESS ETHICS GUIDELINES AND RESOURCES

Home > Business Ethics Takes On More Importance As Business Scandals Make Headlines

It is becoming a regular occurrence - too regular - the name of a well-known business is in the headlines because of some action an executive or other employee took or allowed to happen. Business scandal. Fraudulent actions. Ethics violations.

Actions take a now well-traveled sequence. Revelations followed by investigations, accusations with responses, claims and counter claims, industry generalities highlighted by personal stories, each one or all combined are often followed by some type of contrition and promise to improve. Perhaps there's legal wrangling including formal investigations, testimony, evidence, trials, verdicts, and punishments.

This is no longer an issue that afflicts only companies in the United States; ethics issues occur everywhere. Perhaps Enron, WorldCom and Tyco in the U.S first brought the impact of ethics violations to the popular attention. However, there is now Parmalat, Adecco, Ahold and Skandia in Europe.

Media coverage follows every step these and other companies take once there are accusations. In this environment it is difficult for businesses not to become worried, suspicious, and discouraged. All this shows just how important ethics is to business.

Torch Award For Marketplace Ethics

In December, the Better Business Bureau presented the George S. May International Company with the Torch Award for Marketplace Ethics. This is a prestigious award that indicates the company performs and promotes ethical business practices. An unaffiliated business owner must nominate a specific company for this award; a company cannot apply for it.

The Better Business Bureau (BBB) is a private, non-profit organization with affiliated offices across North America founded in 1912 to promote and foster ethical business operations and business self-regulation. BBB offices review advertising claims, online business practices and charitable organizations. They also help to resolve buyer/seller complaints.

"Receiving this award does not mean we are perfect," explained Israel Kushnir, president of the George S. May International Company. "It does signify that our company practices ethical business behavior to the best of our ability and promotes ethical business practices through example as well as specific policies and procedures."

Kushnir noted that a key element practicing and promoting ethical business behavior is the fact that organizations do not make ethical decisions; it is the individuals who make those decisions. "To support ethical business behavior, an organization must provide not only the means for the employees to act ethically, but also an atmosphere that encourages them to do so," the May International executive stated.

International Ethics Survey - Italy and U.S.

To determine how its consulting clients and other business owners viewed business ethics, May International accomplished a recent survey of businesses in both the United States and in Italy.

This is a "snapshot" of how business owners relate to the ethics issue. While it does not provide specific recommendations, knowing the general attitudes is a first step to taking action.

An overwhelming majority of business owners in the United States and Italy - two countries hit hard by recent business ethics controversies -are voicing much greater concern for ethical operations. However, owners' actions in both countries lag far behind their words when it comes to taking steps to improve ethics in business.

Increased ethics concerns on the part of business owners today (66% of respondents in the U.S. and 78% in Italy), are countered by survey results showing that only slightly more than a third (39% of respondents) of U.S. business owners and about a one-tenth (11% of respondents) of Italian owners provide any type of formal ethics training. In addition, almost half (49%) of Italian owners admitted they do nothing to promote ethical business behavior, compared to a much smaller number (15%) of U.S. owners taking no action.

Not Everyone Is More Concerned

About one third (34%) of the U.S. respondents and less than one-quarter (22%) of Italian business owners stated they had no heightened ethics concerns in today's business world.

The majority of these business people in the U.S. stated their lack of concern comes from the fact there have always been ethical problems. The majority of Italians answering this question stated that ethics did not matter to them and did not matter to their employees. Less than one-fifth of U.S. owners answered that way. However, almost half also felt ethics did not matter to their employees.

"The fact that so many U.S. and Italian business owners say they are now more concerned about ethics in business is a very promising trend," said Kushnir. "However it is shocking, in light of the high-profile business ethics problems in Europe, that so many Italian business owners stated ethics did not matter to them."

"Equally surprising are the opinions by business owners that a sizable number of employees do not care about ethics," he noted. "Business owners should remember that opinions like these could become self-fulfilling prophecies. They are likely reasons for the large number of Italian business owners who do not promote ethical business behavior."

"Recent ethics scandals in Italy and in the U.S. indicate serious moral questions that have tremendous impact on the lives and livelihoods of thousands of innocent workers," explained the May International president. "They also distract management from efficient business operation."

Owner Concerns

Concern for business and personal reputation was the reason most often (54% of respondents) stated by Italian business owners for concern about ethics. However, reputation concerns were noted by only slightly more than one-third (39%) of U.S. owners. The most common reason (43%) noted by U.S. business owners for their ethics concern was the basic belief that acting ethically is the right thing to do.

"Reputation concerns and stating that acting ethically was 'the right thing to do' show there are business owners who understand the value that ethics brings to business operations," Kushnir explained. "It may be difficult to quantify the 'plus' side of ethical actions to the bottom line. But a lack of ethics will definitely have a 'negative' impact on a business."

Employee Concerns

Business owners in the U.S. believe almost half (45%) of their employees place the business reputation and personal reputation as their most important reason to be concerned about ethics. Italian owners believe about one-third of employees (34%) value reputation the most. In addition, more than one-third (39%) of U.S. owners and more than half of Italian owners (56%) indicated they believe the reason their employees are concerned about ethics is simply because acting ethically is correct.

The survey results showed that one-quarter (25%) of the Italian business owners feel they have been a victim of unethical business practices, while in the U.S., a much smaller number (10%) report they have been victimized.

Ethics Training

While the survey results show there is significant concern about ethics, only a limited number of business owners indicated they are taking positive steps to enforce and improve ethical operation.

Slightly more than a third (39% of the respondents) of U.S. business owners indicated they have some type of formal training program and most of these are for employees (24%), not executives (15%). Italian survey results show a much smaller number (11%) have formal training programming and these are about evenly split between employees (6%) and executives (5%).

A quarter (25%) of the Italian businesses surveyed and slightly less number (20%) of U.S. businesses stated they had a written code of ethics.

"The focus on ethics must come from the top of any organization, but it can not remain only at the top," noted the president for the George S. May International Company. "Our philosophy is that ethics must be 'everyone's' program. It needs to be instilled by example and by training through all levels of the organization.

"Codes of ethics and ethics departments are good. However, these should be viewed as means to an end, not the end in themselves. Acting ethically is the responsibility of every person in a company. That is the only practical way to stop the ethical problems confronting Italian and U.S. businesses today."

This information is compiled and provided by George S. May International Company.
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