Part 2 – When it Comes to Business Integrity, Knowledge is Power
Integrity in business is achieved and sustained by the example set by leaders who promote and cultivate a positive workplace culture. This four-part series explores the key role that communication and education play in raising awareness and the successful implementation of an ethical culture.
Employee awareness of the reasons for and benefits of business integrity is critical to achieving an ethical workplace. Once established, the result is engagement in responsible business practices that can only enhance reputation and the bottom line.
Why awareness of integrity-related issues is relatively low inside some organisations
The reality is that some businesses fail to recognise the benefits an ethical culture can bring to a workplace. Many will exert little effort in achieving it because they see the activities involved in doing so as a cost to the business. Additionally, they might pay lip service to it by implementing written policy as a ‘tick the box’ exercise, without intending to bring about real change.
These types of attitudes are hard to understand given the dynamic, ever changing business world. Consequently, an organisation’s risk exposure will change or evolve over time. This presents the ongoing challenge of effectively managing business risk, including integrity-related risks.
Provide adequate training
While most leaders and managers are aware of common integrity risks such as fraud, corruption, and conflicts of interest, a large proportion of employees lack the required level of understanding of these and other risks. For example, in the matters we investigate, we often see that while an organisation may have a conflict of interest policy, an individual being investigated for an undeclared conflict of interest has either blatantly ignored the policy or just did not have a full appreciation of the issue.
As alluded to above, change is a key factor and significantly impacts how integrity-related issues manifest themselves. For example, the technological age has changed how misconduct can occur in the workplace. Workplace bullying and sexual harassment issues now often occur online through social media or via email, text and web-based messaging platforms, leading to the phenomenon of ‘cyberbullying’. Besides this, there are many other new emerging integrity risks.
A business is exposed to potentially significant negative financial and reputational outcomes when it fails, for whatever reason, to:
- Recognise that technological, environmental, social and regulatory change is consistently occurring; and
- Implement measures such as training and awareness initiatives to mitigate organisational risk, including integrity risks.
Warren Buffet is quoted as saying, “Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.”
Given that organisations are made up of individuals, it is the actions of individuals that will ultimately determine an organisation’s brand and reputation. Making an investment in acquiring the right people and then supporting them consistently with information about the importance of business and personal integrity will reap significant rewards.
For more information on educating your employees in risk-related matters, reach out to the team at PKF Integrity.
This is Part 2 of the four-part series “The Importance of Awareness and Education in Achieving an Ethical Culture”
Stay tuned for Part 3.