12 Ethical Principles for Business

principlesWhile thinking about personal principles, I came across a list of 12 Ethical Principles for Business Executives on the Josephson Institute’s web site. I’m going to explore them here.

1. HONESTY. Ethical executives are honest and truthful in all their dealings and they do not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means.

I would call this candor, rather than honesty. Candor needs to be tempered with tact. There are times when you’re dealing with someone who won’t listen to honest feedback, and at those times, you may need to let them see for themselves, for example, by allowing them to fail. An important part of being candid is knowing when you are being deceptive or overstating a case. This is not as easy as it sounds. When you are self aware, you’ll realize how often you tell stories that aren’t true, or assert certainty when really, you are unsure.

2. INTEGRITY. Ethical executives demonstrate personal integrity and the courage of their convictions by doing what they think is right even when there is great pressure to do otherwise; they are principled, honorable and upright; they will fight for their beliefs. They will not sacrifice principle for expediency, be hypocritical, or unscrupulous.

Integrity is partly doing what you say. It is important to refrain from making promises you may not be able to keep. That said, you can’t hedge every statement you make. Integrity takes courage. Another aspect of integrity is wholeness. If you are are unethical in business, you lose credibility in your personal life, and vice versa.

3. PROMISE-KEEPING & TRUSTWORTHINESS. Ethical executives are worthy of trust. They are candid and forthcoming in supplying relevant information and correcting misapprehensions of fact, and they make every reasonable effort to fulfill the letter and spirit of their promises and commitments. They do not interpret agreements in an unreasonably technical or legalistic manner in order to rationalize non-compliance or create justifications for escaping their commitments.

This ‘principle’ is largely a restatement of the previous two, and therefore seems redundant. Sometimes, it is reasonable to interpret something legalistically. For example, when dealing with government or bureaucratic big company policies, if they don’t add value (or are even immoral, like anti-meritocratic hiring policies), following the letter of the law (i.e. doing the minimum required) may be the right thing to do.

4. LOYALTY. Ethical executives are worthy of trust, demonstrate fidelity and loyalty to persons and institutions by friendship in adversity, support and devotion to duty; they do not use or disclose information learned in confidence for personal advantage. They safeguard the ability to make independent professional judgments by scrupulously avoiding undue influences and conflicts of interest. They are loyal to their companies and colleagues and if they decide to accept other employment, they provide reasonable notice, respect the proprietary information of their former employer, and refuse to engage in any activities that take undue advantage of their previous positions.

Loyalty, like trust, is something that must be earned. Assuming you value integrity, you will look for a company whose mission and principles are compatible with your own. Then, assuming your management stick to the mission and the company’s guiding principles and achieve business success, and you deliver results and stick to your own principles, the company should treat you well. If your company hits a rough patch, you should go the extra mile, within reason. If you move on, make a clean break.

5. FAIRNESS. Ethical executives [are] fair and just in all dealings; they do not exercise power arbitrarily, and do not use overreaching nor indecent means to gain or maintain any advantage nor take undue advantage of another’s mistakes or difficulties. Fair persons manifest a commitment to justice, the equal treatment of individuals, tolerance for and acceptance of diversity, the they are open-minded; they are willing to admit they are wrong and, where appropriate, change their positions and beliefs.

The only thing I would add here is that being fair means offering equal opportunities. When, as is nearly inevitable, you have some people who excel and others who don’t, you should not treat them equally.

6. CONCERN FOR OTHERS. Ethical executives are caring, compassionate, benevolent and kind; they like the Golden Rule, help those in need, and seek to accomplish their business objectives in a manner that causes the least harm and the greatest positive good.

A person with integrity who is not a narcissistic opportunist cares about all things. Caring about people should not mean that you ignore results. If there are no results, eventually, people will be hurt when the company lays them off or fails altogether.

7. RESPECT FOR OTHERS. Ethical executives demonstrate respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions; they are courteous and treat all people with equal respect and dignity regardless of sex, race or national origin.

Respect must be earned. This means that until you know someone, you give them the benefit of the doubt, but carefully increase the amount of trust that you give them. The amount of respect one earns is proportional to the amount of trust that they’ve shown themselves worthy of. Someone you’ve just met, or someone who has let you down in the past, does not deserve the same level of respect as a trusted colleague who has always had your back.

8. LAW ABIDING. Ethical executives abide by laws, rules and regulations relating to their business activities.

Some laws are immoral. For example, there were cannabis cafes operating in Vancouver when simple possession of cannabis was illegal. That said, most of the time, following the laws of the land makes sense.

9. COMMITMENT TO EXCELLENCE. Ethical executives pursue excellence in performing their duties, are well informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility.

I prefer the concept of kaizen (continuous improvement) to a mere commitment to excellence. There are times when good enough is what’s needed. Maximizing value and minimizing waste are more important than being an expert.

10. LEADERSHIP. Ethical executives are conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models by their own conduct and by helping to create an environment in which principled reasoning and ethical decision making are highly prized.

Leaders are responsible for making sure a company sticks to its principles. This is especially important when hiring. Skills can be taught, but values are much more difficult to change.

11. REPUTATION AND MORALE. Ethical executives seek to protect and build the company’s good reputation and the morale of its employees by engaging in no conduct that might undermine respect and by taking whatever actions are necessary to correct or prevent inappropriate conduct of others.

The best way to protect a company’s reputation and morale is to perform. A successful company that walks the talk of its values doesn’t need to work at these things. Managers should take action when someone is violating the company’s values or is not pulling their weight. Having an underperforming employee and doing nothing about it is one of the worst things you can do for morale.

12. ACCOUNTABILITY. Ethical executives acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.

You are accountable for whatever you accept responsibility for. This means that you should not accept responsibility for things that you can’t control. Responsibility without authority is a recipe for failure.

About jimbelton

I'm a software developer, and a writer of both fiction and non-fiction, and I blog about movies, books, and philosophy. My interest in religious philosophy and the search for the truth inspires much of my writing.
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