We are all stewards accountable for our use of time, people, money and natural resources. A good steward seeks the right balance between caution and risk-taking; conservatism and innovation; leading and following; stimulating and supporting.
Good business is the way we in business serve the social and economic community, whether individually or corporately in national or international organisations. Its principles apply equally to commercial enterprises, charities and not-for-profit enterprises. All are managed by individuals who in their different ways seek to optimise performance in their businesses.
Business and profit
There is nothing unethical in making a profit. Profit is only one way of measuring the value created by a business. What is more important is to have a richer picture of how value is created, attending to environmental, social and sustainability impact. No business will survive for long without it. What matters is how you make your profit and what you do with it.
If you want to maintain, or even increase, employment, it will be necessary to be profitable and to build up resources for the future. Profit is also needed for new development and to contribute to the community in which you operate.
Are the purposes of your business clear to all your stakeholders? Are all its activities focused on achieving its objectives?
What is the driving force of your business? Is it just to maximise your profit or is it to provide sustainable employment for as many people as is sensible; to build your employees’ confidence, skills and sense of worth; to provide a product or service that contributes to others’ well-being? Does it allow for your business to have a sustainable future?
Is your profit gained in an ethical and just way? If you have little competition, do you make an excessive profit? In the conduct of your business, do you provide good quality at a fair and fixed price? Are you tempted to raise your prices and make a bigger profit just because the market will bear it?
Uncertainty and risk
There is an element of uncertainty and risk in every business. There can be uncertainty because we lack information about the situation, the future or the consequences of an action. There is always the risk of loss either from a particular course of action or from an unexpected occurrence.
It is important to be proactive in managing and containing risks so as not to risk the livelihood of your employees or the future survival of your business.
Do you regularly review the risks associated with your business and seek competent advice on how to manage them?
Do you take reasonable steps to remove unnecessary risks? Do you make sure that people affected by a risk know about it? Do you seek to contain and limit the consequences through appropriate insurance? Do you have contingency plans ready to deal with unexpected events?
Do you take unnecessary risks, potentially damaging the livelihood of your employees or the future of your business?
Responsibilities of directors and managers
Directors and managers benefit by holding themselves responsible to all stakeholders of the business. These include investors, government bodies and the community, as well as employees, customers and suppliers.
A business should fully comply with all applicable laws and regulations. If you consider a law to be at variance with your own social or ethical values, seek advice before taking action.
Seek to do away with dangers and abuses by creating an atmosphere and culture in your workplace that encourages health, safety, integrity and well-being as well as high productivity.
Are you aware of your legal responsibilities as a director or manager? Do you fulfil them?
Do you regularly review the social and moral health of your business? Do you set, communicate and work to standards of business conduct? Have you established systems for monitoring and reporting back in these areas?
If your organisation is doing something which you believe to be unethical, do you consider what part you must play to put the matter right?
Do you create the space for reflective consideration of the wider implications, including ethics, of what the organisation does?
Do you ensure that your shareholders receive all the information they need to rightly value and appraise their investment?
Obligation to shareholders and investors
Any sizeable company needs outside investors in order to take advantage of opportunities for growth. Shareholders provide necessary capital and are rewarded by dividends or capital growth.
Small shareholders have a small voice in the running of a company, but their concerns should be listened to and considered, or your reputation as a business may suffer.
Do you ensure that your shareholders receive a fair return for their investment and risk? Are you managing for the long-term security of their investment?
Are the salaries that you and your fellow directors draw from the company fair? Are you being over generous to yourself, to the detriment of the company, its stakeholders, and shareholders?
Do you avoid necessary expenditure in order to increase the return to your shareholders?
Do your communications with your shareholders give sufficient information about the progress, strengths and vulnerabilities of the company?
Wages should reflect the contribution workers make to their companies. Wages and work requirements should enable them to meet their own needs and those of their dependants, and to contribute to the sustainable growth of their community. Paying below a wage sufficient to maintain a normal standard of living could be regarded as a form of modern slavery.
Does your company invest in, or have offices in, or buy from, countries where there are on-going violations of human rights?
Does your company contract with companies which employ children under the legal working age for children in your country, who are prevented from obtaining a basic education because of their work?
Does your company contract with companies which do not pay their employees a sustainable living wage in their own community?
We have a responsibility to care for the physical and economic environment of the whole world. We should consider the effect our business has beyond our immediate environment and see the wider environment as a ‘silent stakeholder’ Be guided by the following principles:
Do no harm – whether in terms of emissions, waste, untidiness, use of vehicles and machinery, lack of cleanliness, noise, or impact on bio-diversity and the health of eco-systems.
Eco-justice - impact on the environment often affects the poor most of all, often in places remote from our immediate location
Sustainability – acting justly towards generations to come
Be clear about the level of emissions and waste generated by your business. Remember that these often arise from inefficiencies in your operations.
Do you consider the way your goods or services contribute to a sustainable world environment? Do you consider the environmental and social impact of business travel and commuting?
Do you have an active pollution prevention programme? Do you search for ways to reduce and eliminate waste? Do you recycle or use recyclable parts?
Are you sure there is no unjust exploitation of workers and the environment in your supply chains?
Do you provide a product or service that is in any way harmful to life? If so, are there clear warnings?
Are you aware of the finiteness of some resources? Do you ensure that you are not dependent on them?
Are you aware that sustainability applies not only to goods but to communities and cultures too? Do the operations of your business harm in any way the flourishing of individuals, families, or communities?
Do you have an environmental policy and report annually on your progress?
Health and safety
All employers and employees have a duty to ensure that their working practices and equipment are safe for all users and the general public. They should also exercise caution and take steps to minimise risks to the health, safety and welfare of others, whether they are employees, customers or anyone affected by the products or services supplied.
Do you take all reasonable and appropriate steps to comply with health and safety regulations? Do you compromise on safety measures to save money?
Do you work with others to ensure that best practices, standards, regulations and legislation are developed to promote public well-being?
When you see something which could be a hazard, do you report it?
Quality and safety of products and services
There is plenty of evidence to show that providing good quality at a fair price is good practice for any business and pays its own dividends.
Suppliers have a responsibility to ensure that what they offer does not cause foreseeable physical or financial damage to their users.
Do you continually strive to improve the quality and safety of your products? Do you have a quality control programme?
If you purchase certified components do you ensure that they are genuine and not fraudulent?
Does your product have a built-in obsolescence, so that the customer will have to replace it soon? Do you resist the temptation to sell obsolescent product for which it will be impossible to provide spares and replacement parts?
Do your products and services comply with the law and other regulations? Are they safe, fit for use, suitable for their purpose, appropriately designed and sustainably produced? If your products require servicing are there arrangements for doing this in a timely and effective manner?
Have your products been carefully assessed for possible damage or loss they could cause to customers? Have you provided adequate warnings of any dangers? Have you ensured others can be compensated in the event that your product causes unforeseen harm or dissatisfaction?
Advertising and promotion
Advertising and promotional activities are a real test of our commitment to honesty and integrity in business. Consider carefully your reasons for advertising, what your advertisements say (or omit to say), and where you advertise.
Are you careful to avoid intentionally misleading those with whom you do business? Do you ensure that your claims and promises are justified and realistic?
Do your promotions present a true and accurate picture of your products and services?
Are you selling goods and services of worth or are you selling image? Are you aiming your advertisements at particularly vulnerable markets, such as children?
Is your advertising right use of resources? Are the costs of promotion an appropriate proportion of the overall price?