The Sunday Mail
Vision 2030
Allen Choruma
Unless everyone in our nation, be they in politics, business, churches, civil society and our communities, upholds high ethical standards in whatever they do, we will not be successful as a nation in achieving Vision 2030 and other noble socio-economic transformation programmes.
The subject of business ethics has been rekindled in the wake of high-profile corporate scandals such as the much publicised Zinara (Zimbabwe National Road Administration) debacle and similar corruption scandals in both the public and private sectors.
Corporate scandals by their very nature revolve around failure by directors and management to uphold good standards of corporate behaviour, resulting in lapses in maintaining good corporate governance standards.
Business ethics or lack thereof, therefore, come at the centre of these high-profile corporate scandals.
I have written on this topic before, but will repeat it given the importance of the topic in the wake of corruption scandals in Zimbabwe.
Ethics
Ethics is the central nervous system for good corporate governance.
Directors and management, for example, are entrusted with huge responsibilities as stewards of shareholder investments.
Their fiduciary responsibilities as trustees require them to approach company business with seriousness and responsibility.
Company directors, management and all employees in any organisation should take business ethics seriously.
Directors need to lead by example by upholding high standards of ethical behaviour.
Directors should take personal responsibility for their own actions.
Every organisation should be guided by good business ethics as characterised by the following attributes: discipline, transparency, independence, accountability, responsibility, fairness and respect.
Ethics make a difference between leaders who will succeed and leaders who will fail.
Non-adherence to good ethical standards leads to corruption, which, in turn, handicaps performance and reputation of a company and its entire board and management.
What is ethics?
Ethics can simply be defined as that part of philosophy which deals with the moral standards of behaviour imposed by society by which a person should be guided.
From a business point of view, business ethics is about the following:
. Observing, foremost, the moral standards of behaviour generally imposed by society.
. Formal and informal rules of right and wrong business conduct and behaviour.
. Compliance with formal and informal rules of business conduct.
Points of view
According to Willie Tichauer’s article (then President of the SA Institute of Company Secretaries and Administrators in 2005), “Business Ethics- An Overview”, business ethics can be looked from the following points of view:
. Observance of moral and ethical standards of society.
. Adherence to sound corporate governance principles.
. Conflict of interest.
. Legal and statutory compliance.
In my opinion, the above four points cover all the important areas that one needs to examine when one is discussing the subject of business ethics.
Misconceptions
There are general misconceptions about ethics that we need to dispel from the outset.
According to Willie Tichauer in his article cited above, these misconceptions are said to include the following:
. Business is immoral and should be accepted.
. The sole purpose of business is to make a profit irrespective of ethics.
. Business operates according to a special set of principles and rules which are different from the ethics of society in general.
. Ethics cannot be taught. By the time a student reaches the tertiary institution stage of his/her development, his/her ethical values have already been formed.
. You will never be rich if you are completely honest.
Most people in Zimbabwe today think that ethics is associated with religion or traditional culture and that it has no role play in business. That is wrong.
We often hear people talk about making a “quick buck” irrespective of ethics.
The recent spate of price increases and arbitrage in basic commodities and fuel is an example of ethics “being thrown out of the window” in the business sector in search of profits.
Given the economic hardships being experienced in the country, most people in the civic society and in business have turned a blind eye on ethics and are simply driven by the desire to make money at all costs.
Moral fabric
As a nation, if our leaders do not follow ethical principles, we will degenerate into a society which has no moral fabric, no beliefs and no standard of values.
We have company directors, senior executives and management who have convinced themselves that you will never be rich if you are completely honest.
This is regrettable.
It is important that if we are to turn around the economic fortunes of our country in support of Vision 2030, we need corporate leaders and company executives that observe highest standards of ethical behaviour.
No business will succeed if it does not adhere to principles of good corporate governance.
The observance by our corporate leaders, management and employees of moral and ethical standards of society is part of good corporate governance.
Good corporate governance requires that companies follow principles of good business conduct.
A company cannot uphold principles of good business conduct if it does not adhere to ethics.
Ethics is core to the transparent and responsible conduct of business.
Code of Conduct
Most companies have come up with codes of conduct as one of the measures to address ethics.
A code sets out minimum standards of ethical behaviour and implies a commitment to high standard of responsible and ethical conduct by directors, management and all employees.
It should be noted that a code of ethics does not cover all aspects of ethical behaviour expected of employees.
It should, however, be stressed that a code of ethics on its own does not necessarily lead to practice of good ethics.
Codes of conduct are primarily meant to promote high standards of ethical practice by defining acceptable behaviour and practices within an organisation.
Many companies in Zimbabwe have these codes yet we still read about corporate scandals.
Adherence to good ethical practices goes beyond a code of ethics.
Ethical values start and are formed from home and within the society.
Conflict of interest
One cannot discuss business ethics without mentioning conflict of interest.
More generally, a conflict of interest can be defined as: “Any situation in which an individual is in a position to exploit a professional or official capacity in some way to further their private interest or to improperly further another person’s private interest”.
A conflict of interest makes it difficult for an official, be they in a private or public capacity, to fulfil their duties fairly and objectively.
A conflict of interest compromises an official from making objective professional judgment because of a clash of official and personal interests.
This creates impropriety that usually undermines their ability to act properly because they have to further their own interests or the interests of other people.
Compliance
Lastly, compliance is a key component in enforcing a culture of business ethics.
If an organisation is to foster a culture of good ethical conduct, directors should set the right tone from above and lead by example.
From top to bottom, from the board chairperson to the lowest rank, everyone should undertake at all times:
. To comply with the code of conduct
. Observe all applicable company policies
. To strictly follow rules and procedures laid down in company manuals.
. Not to take any action which they know, or reasonably should know, violates any rules and applicable law.
. To avoid situations that involve a conflict of interest and to disclose to appropriate authorities should they be involved in a conflict of interest situation.
. To desist from conduct that can be interpreted as breaching internal regulations and the law.
In conclusion, corruption, which arises out of failure to adhere to good ethical standards and principles, poses serious challenges to our economic growth and prosperity and attainment of Vision 2030.
Allen Choruma can be contacted on e mail: [email protected]
