BusinessCompany NewsWhy honesty is the best policy

Why honesty is the best policy

Scandals such as Enron and Andersen thrust business ethics into the headlines, yet the majority of UK businesses have failed to alter policies in response.

Findings from a survey by PowerInfo reveal that over 65% of those polled noted no significant change to practices within their company. I’m not surprised.

Every decade there’s a major scandal. We all freeze like rabbits in headlights, then scurry off as if nothing had happened. To me the two true villains of this piece are corporate investors and the media, closely intertwined.

Marjorie Scardino once noted that most financial journalists can’t read a balance sheet. The media singularly failed to look under the covers of companies hit by scandals. Newspapers’ financial pages often reveal more about PR than objectivity.

The other villain? Mutual fund investors. A number of our survey respondents echoed this opinion. As a group, they fail to delve deeper. Independent research sources, such as Hoover’s Online, objectively present a company’s position – even spotting when ‘rats’ start deserting the ship. Fund investors have a duty to seek such unbiased reporting.

So do ethics matter? For businesses, they present dangerous ground. Ethical stances leave you open to criticism. Somewhere along the line, someone will be using third world labour, cutting down trees, polluting rivers.

Even the Church of England invests in defence. The government’s approach of throwing more paper at the problem simply wastes resources.

Honesty is a more sustainable commodity. Indeed, 70% of those surveyed valued honesty in business more highly than success. Interestingly, the gender split revealed a discrepancy. Only 48% of males versus 90% of females placed the higher value on honesty. Perhaps then, the Higgs report, which noted the woeful lack of women on British boards, deserves a closer look.

Meanwhile, the message is clear. Make sure any company information you’re using is unbiased and reliable. It saves a lot of heartache in the long run.

  • Gehan Talwatte is CEO of PowerInfo

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