Many may often confuse the term ‘corporate integrity’ with ‘corporate social responsibility’. The latter is only a small part of corporate integrity.
One could say there has been somewhat of an ethical revolution as companies are being called out for their errors and are being made accountable for their actions – the environmental impact, treatment of their employees, charitable donations, and even how they are handling a crisis like the global pandemic. Unfortunately, many a time ‘money talks’ and companies are lead by the rearing head of profit margins and pleasing stakeholders. However, the tables are turning as according to Critical Eye, financial institutions that have interests in large corporations are heavily staking their economic returns on the integrity of those companies, starting with the integrity of the boards of directors.
Much like we say “charity begins at home”, it is similar to corporate integrity. It’s no use advertising being a charitable or respectable organisation when your own employees think and know otherwise.
So why is corporate integrity important in today’s business-scape?
Companies are being held accountable for their actions, not just by financial stakeholders. By 2025, Millennials would make 75% of the global workforce – and Millenials value transparency and social impact more than any other generation. This makes a strong Code of Ethics important as companies are dealing with higher employee turnover as workers are seeking more meaning, transparency, and honesty in their work. Therefore an honest and transparent culture of corporate integrity will help retain employees.
2. Being proactive
Staying ahead of this Ethical Revolution will help you remain a leader in your field; help you retain the best talent and please financial stakeholders. It is also a matter of corporate reputation. Without a positive reputation, a company would have no customers, no brand value, and, ultimately, no profits.
However, companies cannot simply outsource their code of Ethics and call themselves ethical. Outsourcing your Code of Ethics is not the best way forward because it is very personal and individual to the company. Moreover, it is not something that naturally occurs. Leaders must talk openly, explicitly and regularly about its importance. It is a situation of “practicing what you preach”, otherwise it will only result in backlash.
Companies that want a culture of integrity must make the process of reporting all problems, especially violations of the code, easy, straightforward, and clear. Enforcing a culture of integrity through repetition is also one way to encourage it and make your mark as a company that values integrity.
Apart from making the reporting process easy, the company must see that violations are investigated and justice is served. Otherwise, it will diminish the value in reporting and by extension your organisation. This may also result in a backlash if reports of ethical misconduct are not handled as they should.
3. Added value
Corporate integrity cannot be something that is simply addressed at an Annual General Meeting or board meetings a couple of times a year, it needs to be woven into the company’s daily rituals and approaches. It is not simply a task to tick off the list. If the company practices corporate integrity it will likely translate to a more valuable company: attracting the best talent and the best stakeholders and customers.
Corporate Integrity is contagious and if it is embraced and encouraged by leadership it will be woven into the fabric of your company’s culture and your employees’ practices.
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