Ethical Business is Good Business

14th Mar , 2018

In addition to receiving business owners support from a good business coach, reputation is crucial for business success, with ethical businesses having a much higher chance to grow and thrive than businesses with poor reputations. All business owners and key corporate leaders should build and maintain ethical and reputable standards which feed directly into your business reputation and improve relationships with customers and other stake holders.

Recently in Australia and around the world, there have been many damning examples of how questionable ethical standards can seriously damage a corporate’s reputation and their business.

Examples

• Volkswagen have erred several times – firstly with their allegedly misleading emission reports, and more recently through a further revelation that they may have tested the effects of toxic diesel fumes directly on human and monkey test subjects. These two events have no doubt damaged Volkswagen’s standing, giving their customers (and potential customers) a diminished view of the organisation and its offerings. This was reflected in a drop in Volkswagen’s share price and market capitalisation. As per Bloomberg on the 22nd of September 2015: Volkswagen lost almost a quarter of its market value after it admitted to its U.S. air pollution tests, putting pressure on Chief Executive Officer Martin Winterkorn to repair the reputation of one of the world’s biggest carmakers.
• Sexual abuse claims against high profile men in Hollywood are reputational disasters for the accused and their associated businesses. Here’s just one recent headline that’s made the news: After Weinstein, more than 100 high-powered men accused of sexual misconduct (USA today, 22nd November 2017, Updated 9:25 a.m. ET Jan. 30, 2018).
• In late 2017, the Commonwealth Bank of Australia was accused of anti-money laundering failures. From the Associated Press, 14th December 2017: Commonwealth Bank has been hit with another 100 allegations of breaches of anti-money laundering and counter-terrorism laws, including failing to quickly report two suspicious matters relating to the financing of terrorism…. the federal government’s financial intelligence unit updated the total number of alleged breaches by Australia’s largest bank to more than 53,800.
• In the USA, Wells Fargo, a previously reputable bank, suffered a loss of billions of dollars of deposits due to a loss of trust by customers bothered by the bank’s fake account scandal. From CNN, 31st August 2017: Wells Fargo (WFC) now says it has found a total of up to 3.5 million potentially fake bank and credit card accounts, up from its earlier tally of approximately 2.1 million. In other words, there are two-thirds more fake accounts than previously realized.
• Murray Goulburn slashed the price of milk below what it had agreed to farmers, causing loss of confidence not only with their farmer suppliers but also the investing public. From FarmOnline National, 20th October 2017: Murray Goulburn’s troubles, which started with the ‘clawbacks’ saga amidst a declining international milk price last year, have failed to ease up in spite of a turnaround in the fortunes of dairy internationally. This year it announced the closure of its Kiewa and Rochester plants, while earlier in the month it said it would lay off 60 milk tanker drivers. The news of the redundancies comes as rivals such as Fonterra announce large increases in the volume of milk receivals.

The Importance of Ethics in Business

Although the above are large corporate or high profile individual examples, the same rules apply to SME’s and small businesses. All businesses, corporations and even Governments can’t afford to damage their reputation. The potential impact can cause a decline in customer, supplier, investor, banking and community trust, which in turn can impact bottom line, staff morale, productivity, and future financial survival of the organisation.

Any business coach will tell you that reputation is essential, as it is how a business is perceived by customers, employees, media, and other stakeholders. It is an intangible asset and is extremely powerful, as it can make or break an individual, business or other organisation.

Developing and implementing a corporate culture starts at the top, whether it be at board level or with a business owner. Most businesses exist to make a profit or to at least come out even, and building a good reputation is a critical factor to achieve this. Without a good reputation, or at the very least having systems in place to create ethical outcomes, businesses will crash. Some may slowly recover, while others will fail.

Here at International Business Mentors, we are extremely careful when selecting our business coaching and mentoring professionals. All our business coaches and mentors, must meet our very strict criteria for integrity and ethical standards. As well as the requirements for exceptional business skills, our business mentors and business coaches must have extremely high ethical standards. This is a paramount factor in their selection. To foster and develop a successful business coaching relationship, there must be trust, and trust is built on a strong relationship founded on integrity and mutual benefit.

How International Business Mentors Can Help

With business owners support and guidance from a tried and vetted International Business Mentors business coach, you can better work together on your business and personal improvement and better assess general business opportunities and risks. This includes the potential loss of reputation due to ethical considerations and putting in place checks and balances to minimise any potential reputational damage as part of your business growth strategies, culture and control.

A well matched business mentor or business coach can help you with:

• Discussion of your organisation’s target culture set from the top, then trickling down by leading by example, enforcing that culture with your employees and customers
• The development of critical shared values and the recruitment of like-minded employees
• Checks to ensure that policies and codes of standards are in place, monitored and enforced
• The development of how you can lead from the top with values, vision action and behaviour

Different businesses and industries will have a variety of special business issues to face, but the fundamental basics of ethical standards and broad cultural alignment remain very much the same.

Enquire Today

Call International Business Mentors today to discuss how engaging a business mentor or business coach can help you and your business build towards success. We can assist with developing business growth strategies in addition to helping you plan an ethical business environment to minimise the risks of a damaged reputation.