The Hindu Business Line : Putting ethics on the business agenda

A lawyer and human resources professional, J. Robert Carr is Chief Professional and Business Development Officer for the US-based Society for Human Resource Management (SHRM). He has also served as the organisation’s Chief Human Resource and Strategic Planning Officer and has led its diversity initiative. Besides this, Carr has also worked as SHRM’s Chief Ethics Officer. He believes that his legal training allows him to better understand the letter of legal regulations and also the rationale behind them. “The law also teaches you to appreciate an issue from multiple perspectives, which is invaluable when dealing with employee relations matters,” he adds.

Scheduled to visit India this week, Carr will speak on ‘developing a global framework for business ethics’ at a conference on business ethics in Mumbai. “It is imperative to consider cultural differences when an organisation attempts to apply ethics in the global landscape,” he points out.

In an e-mail interview with The New Manager, Carr touches on ethics in the global marketplace, ethical challenges in the modern workplace and more. Edited excerpts from the interview:

Business ethics was in the spotlight for some time, in the early 2000s, after the collapse of companies such as Enron. How far has business ethics progressed since then? Do companies worldwide now take business ethics more seriously than they did a decade ago?

In the post-Enron, Sarbanes-Oxley era, illegal and unethical corporate activity continues to occur at a very high incidence. The number of companies reporting fraud has increased from 37 per cent to 45 per cent since 2003; more than one-third (34 per cent) of these crimes were discovered by accident according to the Global Economic Crime Survey 2005 by PriceWaterhouseCoopers.

Many organisations, however, have made substantial investments in ethics programmes, but they just do not seem to be paying off according to the US-based Ethics Resource Center in its 2005 Business Ethics Survey.

Ethics means different things in different places; so what is ethically acceptable in one country may not be ethical in another. Can there be a single, global code of ethics for business?

It is imperative to consider cultural differences when an organisation attempts to apply ethics in the global landscape. Having to walk the tight rope of ethical relativism and ethical fanaticism is a challenge. It is important to have a set of core principles central to the organisation that is developed by a cross-cultural team that can perhaps be localised through training programmes.

What do you think are the major ethical challenges in the modern workplace?

Fraud, the misuse of confidential information, appropriation of an employer’s intellectual property are all common ethical challenges in today’s workplace. Lying to stakeholders and the falsification or alteration of documents, including time records, are also frequently cited as ethical lapses.

Is it possible to create an ethical organisation, especially with the growing diversity of the workforce?

Absolutely. Despite the challenges, organisations should put ethics and compliance programmes in place and focus on building strong ethical cultures. An organisation must both have a programme and work to create a culture where ethical issues can be aired and addressed.

In fact, SHRM has globally been at the forefront in laying out ethical benchmarks for organisations through its various certification programmes as well as research, especially from HR perspectives.

How does a business handle the costs of being ethical?

There is a substantial body of research to suggest that there is a causal link between good ethical practices and corporate profits. While research continues to study the link between ethics and profits, both prevailing wisdom and many research findings suggest there exists an important connection between the two for the long-term success of businesses. Thus far, much of the available literature provides detailed information on the role of leadership, culture, a code of ethics and other non-financial components associated with creating an ethical business climate. The real opportunity for the greatest practical contribution in this arena now lies in potential metrics that could help business leaders connect and measure the link of ethics with operational performance, revenue and earnings growth.

What role does the HR function place in promoting and ensuring ethics in business?

HR and finance professionals are typically the ones that wear the hats related to ethics in organisations, often in the form of ethics officer positions. As the role of HR professionals continues to move further along the strategic business partner continuum, it becomes even more important for HR to be informed and articulate about the way in which practised ethics can affect business and the performance of the employees

All too often, HR professionals are caught in the middle when business and ethics collide. In a survey conducted at the end of 2005 by my own organisation — the Society for Human Resource Management — 16 per cent of respondents claimed they had quit a job as an HR professional when caught in the middle of an ethical dilemma.

Does SHRM have any special programmes or initiatives that focus on business ethics?

In June 2001 SHRM rolled out a code of ethics for its members. The code provisions are designed to help every professional clearly understand the behaviour required to be ethical practitioners and leaders in our profession and in our organisations.

Our highly regarded publication HR Magazine frequently publishes articles of interest on business ethics and our Web site, www.shrm.org, offers a toolkit for HR professionals looking to create an ethics programme in their organisation.

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