The Institute of Business Ethics (‘IBE’) has launched its “Guidance for Board members on developing an ethical business culture”.
The importance of establishing an ethical culture is now widely recognised across organisations in the private, public and third sectors. This guidance has been drafted to provide practical recommendations and flexibility to be of value to all organisations, considering how to promote and monitor an ethical culture. It encourages boards to lead by example, to make ethical behaviour a priority when considering recruitment, promotion and remuneration, and to ensure that ethical risks are taken into consideration in major operational and strategic decisions.
The Guidance is intended to provide practical recommendations for boards as they seek to promote an ethical business culture within their organisations.
It is also intended as a tool for practitioners and ethics advisers who support boards in delivering their duties.
Under the UK Corporate Governance Code, the board of a listed company is required to ‘establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned. ‘All directors must act with integrity, lead by example and promote the desired culture’. Ethical culture is also recognised as vital in the Wates Principles for Large Private Companies.
The importance of establishing an ethical culture is now widely recognised across organisations in the private, public and third sectors. This guidance exists to support boards of listed and other businesses, the public private, and third sectors. It is drafted to be flexible enough to have value for both large and small organisations, in considering how they should promote and monitor an ethical culture.
The IBE convened an advisory group comprising a majority of corporate board members plus representatives of business ethics practitioners and a company secretary and sought advice from regulators to share and oversee the development of this guidance for boards.
Members of the advisory group supporting the development of the new guidance include abrdn chairman Sir Douglas Flint, Travis Perkins chair Jasmine Whitbread, Co-op Group non-executive and Shakespeare’s Globe chair Dr Margaret Casely-Hayford, Schroders company secretary Graham Staples and Serco director of business compliance and ethics Robert Smith.
The new guidance follows polling released by the IBE in July showing that just one in three Britons believe companies operate ethically.
The guidance encourages boards to lead by example, to make ethical behaviour a priority when considering recruitment, promotions and remuneration, and to ensure that ethical risks are taken into consideration in major operational and strategic decisions. The IBE has previously stressed the importance of boards identifying and monitoring ethical risks and ensuring staff and other stakeholders can raise and escalate concerns about unethical behaviour and practice.
To read more please click on this link which takes you to where a copy of the Guidance can be obtained.