Businesses can’t afford not to be good

Businesses can’t afford not to be good
Opinion + AnalysisBusiness + Leadership
BY The Ethics Centre 28 OCT 2020
A famous New Yorker cartoon depicts a businessman sitting by a campfire, still in his suit, speaking to two young children.
“Yes, the planet got destroyed,” he concedes. “But for a beautiful moment in time we created value for shareholders.”
The logic seems perverse, but more the worrying reality is that in reality, it’s quite pervasive. We’ve seen Royal Commissions into aged care and financial services, growing pressure on tech companies to address social issues and the overwhelming pressure for businesses to address climate change. Despite this, we have seen very few organisations making meaningful investments into ethics.
We should worry that we’re living in the campfire CEO’s beautiful moment in time.
At The Ethics Centre, we’ve spent over thirty years getting into what makes organisations tick. How they’re motivated, what they care about and what goals they serve. Time and again, we’ve seen how the real desire to act with integrity, uphold customer interests and attend to vulnerable people is pitted against business imperatives.
No matter how many scandals we see, the message still seems to be the same: while you’re successful, you can be ethical. But if you’re not successful, you’ll need to park your ethics till you are.
This is the campfire CEO’s logic. By focussing on the (often illusory) short–term value captured that ethical shortcuts can at times promise, businesses lose out in the long run. And thanks to new research commissioned by The Ethics Centre, we now know exactly how much businesses are losing out on by giving away the Ethical Advantage. We also know how much courageous businesses gain by making ethics a priority.
Research by Deloitte Access Economics has revealed that businesses who are seen as ethical – fair in business, transparent and open – enjoy a higher returns on assets. They are also less likely to have staff experiencing mental health issues, because when we believe the people around us are ethical, we experience less mental health challenges.
What’s more, if we are able to improve the ethical standing of enough people and businesses, we’ll not only boost business returns, we’ll improve wages and GDP. Nice guys are the tortoises of the business world. They finish first in the long run.
Cris Parker, head of the Ethics Alliance, a community of businesses committed to a more ethical way of working, says “when organisations make a concerted effort to invest in ethics, they create an environment where good intentions are just the beginning.”
She believes it is when ethics shifts from being a leader’s obligation to being a shared responsibility that real change happens. “It’s the cumulation of every employee serving that purpose, doing the right thing that really makes the difference. “
Realising these benefits requires us to recognise the source of the campfire CEO’s error: economic narrow-mindedness. The willingness to destroy the planet in favour of business returns (which is, in fairness, a caricature of most of today’s business leaders) demonstrates a failure to recognise how dependent our economy is on the wellbeing of the planet.
Similarly, pursuing economic returns without considering the means by which they’re achieved ignores the crucial role that trust, integrity and character plays in preserving our economy.
We don’t trade with people we think are going to betray us. We don’t invest when we can’t trust others to be careful with our investments.
Michelle Bloom leads The Ethics Centre’s consulting and leadership team. She believes ethical improvement requires us to embrace complexity rather than looking for simple solutions.
“Today, business leaders are dealing with very complex operating environments where action and bottom–line results are rewarded over reflection, perspective seeking and co-ordination. This haste to decide without deliberation limits leaders to mechanistic solutions where systemic, novel and context–specific approaches are required.”
Unfortunately, realising these benefits is harder than it seems.
Much like an optical illusion you can only properly see by looking away from it, the economic benefits of ethics are only likely to be realised by those who seek it with integrity rather than a hunger for profit.
Hypocrites and cynics need not apply for the ethical advantage. But for the sincere and the patient, results will come in time. However, it will require businesses to campaigning not just for their industries to be better as a whole, but for the large-scale Ethical Infrastructure investments Australia needs to ensure we have trustworthy markets, institutions and systems.
For Michelle Bloom, alongside large-scale change, organisations need to get their own house in order. “Embedding an Ethics Framework into the organisational system and its processes is the first step,” she says. Next is developing your leaders’ systemic and ethical thinking to make good decisions in complexity as well as ensuring the culture of the organisation aligns to your Ethics Framework.”
Each of these steps, alongside developing the capacity for good decision-making and embedding ethics into the design of all products and services, are markers of the kind of integrity that grants the Ethical Advantage.
In our line of work, we often hear from so-called pragmatist who see ethics as a nice idea that doesn’t work in the real world. The numbers are in, and it turns out the most pragmatic thing to do is make ethics a top priority. Anything else would be bad business.
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BY The Ethics Centre
The Ethics Centre is a not-for-profit organisation developing innovative programs, services and experiences, designed to bring ethics to the centre of professional and personal life.
Being a little bit better can make a huge difference to our mental health

Being a little bit better can make a huge difference to our mental health
Opinion + AnalysisHealth + Wellbeing
BY Matthew Beard 28 OCT 2020
When Hannah first started working at her university, she was excited to work with a group of colleagues who shared her vision of contributing to the public good.
She spent a happy six years feeling like she was serving this goal. Two years later, her GP described her as having symptoms consistent with a mental breakdown.
What changed? Hannah lost her belief that her colleagues shared her commitment to the public good. She explained how “several senior individuals prioritised building relationships with senior staff or performing tasks that were very visible to senior staff, instead of performing their core duties to the community.”
One manager – working as temporary cover for a worker on maternity leave – neglected Hannah and her team, and then took credit for their work. When the maternity leave was done, this manager was promoted into an even more senior role.
Psychologists and philosophers working in various fields of trauma have noted the powerful role played by the ‘just world hypothesis’ – the belief that the world is inherently fair.
The just world belief leads us to assume that if we’re nice, we’ll be treated nicely in return, if we work as hard as someone else, we’ll be equally recognised and so forth. Unfortunately, the just world hypothesis is sometimes disproved, and the results can be psychologically disruptive.
In some cases, people will double-down on their commitment to the just world hypothesis, and conclude that if they’ve been mistreated, it must be because they’ve done something wrong. In other cases, they might conclude that the world simply isn’t fair, and can’t be relied on. In Hannah’s case, it was the latter.
“These issues were structural, existential, ethical and were psychically wounding me,” says Hannah. “I saw evidence that the quality of my work was irrelevant to my job security – it was more about who I rubbed shoulders with.”
Hannah wound up doubling her anxiety medication, taking stress leave and resigning from the university. “I still feel nauseous thinking about work, and had a panic attack last week when I accidentally opened Outlook,” she says.
Hannah’s story isn’t a one-off. It’s backed up by hard data.
The recent Ethical Advantage report commissioned by The Ethics Centre found your mental health was affected by your belief in the following three things:
- Whether or not people keep their word
- Whether or not people honestly honour their agreements
- Whether or not people will step on others to succeed
The more you agree with these statements, the better your mental (and physical) health is likely to be. But the reverse is also true.
The less able you are to trust in the people around you to act ethically, the more likely your health – both mental and physical – is to suffer.
“If I had been able to keep the perception that colleagues around me were ‘good people’ I would have been able to maintain a sort of ‘we’re all in this together’ mentality,” says Hannah. Instead, witnessing competitive, dishonest behaviour led her to lose faith in what the university stood for, and the people she worked with.
Our research has found that all it takes is 10%. If people feel like the people around them are 10% better – just a little bit – it’s enough to give their health a bump. In some cases, it’s enough to keep someone from quitting, from experiencing a mental illness or doing something they think is wrong. From little things, big changes can grow.
For Hannah, those little things are exactly those identified in the Ethical Advantage report. What would have made a difference to her would have been seeing people “doing as they say, and following through.”
“A lot of hurt has happened when senior staff have said one thing, then said a very different, contradictory thing the next week,” she says.
Perhaps the saddest aspect of Hannah’s story is how preventable it all was. She was good at her job. She’s smart and worked hard, and was driven to anxiety and burnout by an environment of competition and manipulation.
This hit especially hard for H because her workplace put a particular focus on health and wellbeing. The university “pays a lot of lip service to health and wellbeing. Senior leaders talk about it all the time, and make sure we stay ‘resilient’ and know that we’re ‘supported’,” says Hannah.
Cass R Sunstein, a legal scholar and author of Nudge, which helped champion a new wave of behavioural economics, believes that we have a deeply-held moral heuristic to punish betrayals of trust.
This means the more we believe we can trust someone, the more harshly we judge breaches of that trust.
In Hannah’s case, her faith in her colleagues, in the purpose of the institution and in the care the university promised her were all let down.
The reason why the university’s culture became so competitive was because of a change of strategic priorities. Hannah’s university put a higher focus on income than education. Hannah explained how her university had become “more profit driven, especially this year.” As a result, “an ‘every man for himself’ attitude proliferated,” she said.
Ironically, because of the mental health implications of drifting away from its true purpose, the university’s goal – better financial outcomes – becomes harder to achieve. It’s expensive to have staff experiencing burnout and mental health issues. Hannah is now on stress leave.
In 2018, KPMG estimated that every instance of mental illness in the workplace costs an organisation $3200. On its own, this may not seem like much in the context of an organisation. However, data from the Survey of Mental Health and Wellbeing suggests almost 20% of the workforce experience mental health disorder. For a university of 3500 staff, that amounts to over $2 million a year in lost productivity. And that’s before we consider the more important costs – the pain and suffering of people like Hannah.
And the irony goes deeper. The competitive, ‘every person for themselves’ mentality caused Hannah to lose faith in the people around her. She no longer believed they were ethical people. Which is unfortunate, because our findings suggest people who are perceived as ethical can enjoy a bump to their wages. If you’re out for yourself, there’s a chance you’ll only be stepping on your own toes.
Of course, the reason for taking care of someone else’s mental health, treating them with respect and honouring your word isn’t because there’s something in it for you. If that’s all that’s motivating you, then something’s gone wrong. We should want to care for people at work because we care about them, period. People spend an inordinate amount of time at work – it’s a huge part of their lives – and they should be able to flourish there.
However, what this data helps us understand is just how easy it can be to turn things around for some people who aren’t living their best lives at work.
There are times when ethics can feel like an impossible burden. When the obligations thrust on us come at far too high a personal price. This isn’t one of those times. Hannah didn’t need to suffer. The university didn’t need to lose someone of her passion and talent. If only the people around her had tried a little harder to keep their word, acknowledge her work and do their jobs, she could have avoided a world of heartache. What’s more, there would have been no downside.
Hannah’s story is not unique. There’s a chance there are people like her in your workplace, your community, or even your family. So tomorrow, why not try being a little better? You don’t need to be a saint. Just 10% better.
That’s all it takes.
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