Does being ethical make real commercial sense?

This week the board asked me what I could do to pump up our score in an upcoming corporate responsibility league table. Last year, we did OK, but we want to better it this time.

Luckily, like a Formula 1 racing driver analysing his track times, we know where we scored less well and what we need to do to improve. So a week ensued of publishing our code of ethics on our website, updating our corporate lobbying policy and ensuring the team are up-to-date with registering what corporate hospitality they have received.

It got me thinking about the role of ethics in business today. Some businesses have made a virtue of it; others claim it is essential to do business. But being ethical is not always a straightforward track. One part of my brand provides products and services for other businesses. How scrupulously should we police what they do? For example, we claim we want our employees to be healthy, so are we being two-faced if we provide services to a tobacco manufacturer?

We also do some work for defence contractors – companies that no doubt supply weapons to our frontline troops. While not illegal – in fact, our soldiers are some of the most revered members of society – are we being ethical if it is our services that enable the death of humans, even if it is in a war situation?

There are people who campaign against banks investing in certain regimes, supermarkets stocking specific brands of tuna, and oil companies exploring controversial parts of the world yet I still see customers flocking to the said banks, grocery stores and petrol pumps. Do they really care about a business’s ethics or do most just accept these things as a consequence of modern commercial life?

Does being truly ethical make a business more successful? And with the economy the way it is, can we afford to put conscience before contracts?

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