Taking the Ethical High Road Is Good for Business

Today’s news is chock-full of business leaders caught with their hands in the proverbial cookie jar or making some other fiscal faux pas that adversely affects stockholders, employees and the reputation of their particular industry. So it shouldn’t come a

Today’s news is chock-full of business leaders caught with their hands in the proverbial cookie jar or making some other fiscal faux pas that adversely affects stockholders, employees and the reputation of their particular industry. So it shouldn’t come as a big surprise when you hear, “Take the high road in business, and you may reap more benefits than a warm fuzzy feeling.” Doing the right thing when presented with wrong can have a positive affect on your company’s reputation, future sales and lasting prosperity.

“Probably the most important ethical issue that business executives face is how to deal with employees who observe wrongdoing in the workplace,” said Bruce Weinstein, Ph.D., CNN analyst and CEO of Ethics At Work Inc. “Obviously, companies prohibit cheating, stealing, harassment, fraud, other sorts of crimes and unethical conduct, but very few have policies that tell employees what they should do if they observe someone else engaging in wrongful conduct. So many employees when they’re in that situation choose to do nothing, since they’re not obligated by the company to notify the supervisor and for obvious reasons they don’t want to create ill will among their co-workers.”

Doing nothing in the face of wrongdoing is rarely the best choice in business or elsewhere, Weinstein said, and it affects the company’s bottom line in several ways. “First of all, it tarnishes the company’s reputation when the truth comes out, as it eventually does, that wrongful conduct was known and yet nothing was done about it,” Weinstein said. “Everyone loses when this occurs. The employees themselves lose, the company can lose clients or customers, and the shareholders for publicly traded companies are harmed because they literally have an investment in the welfare of the company. Taking the high road isn’t just the right thing to do, it’s good for business. Conversely, taking the low road or acting selfishly or acting out of fear isn’t just wrongful conduct, it generates bad PR, and ultimately, business is hurt.”

Weinstein used Martha Stewart’s situation as an example of what can happen when a business leader’s misdeeds become known. Stock in Martha Stewart Living Omnimedia took a big hit after Martha’s wrongful conduct came out and she was convicted of a felony. “Her company was investigated with her, and even though her conduct wasn’t directly related to the company, it’s very difficult for chief executives to separate in the public mind their personal and professional conduct, and probably there’s good reason for that,” Weinstein said. “Rightly or wrongly, we do look to business leaders, political leaders, educators as being exemplars of good conduct, whether they feel that way or not.”

It may seem like a subjective topic, but there are rules for ethics. Weinstein has outlined four basic principles that may sound familiar. “It comes out to this: Do no harm, treat people with respect, benefit other people and play fair,” Weinstein said. “Now, all of us learned these in kindergarten. ‘Don’t hurt people, be fair, clean up your mess,’ and to go beyond that, try to make the world a little bit better than when you showed up. Go a little further than you have to. This is the difference, by the way, between ethics and law because obviously the law prevents us from harming one another, but it’s not illegal to decide not to benefit other people or not to leave the world better off. Ethics demands a little more of us.”

A failure to take ethics seriously, or viewing ethics as window dressing, can be one of the worst possible business moves for an organization. “Ethics is sometimes seen as something that you reluctantly have to buy into. It’s actually in a business’s own interest to take ethics seriously,” Weinstein said. “When businesses punish an employee for wrongful conduct and they also praise employees for having the guts to come forward, that generates such goodwill in the long run that businesses prosper. Failing to take ethics seriously or treating it as a joke, or as Leona Helmsley put it in a different context, ‘for the little people’—ultimately it’s hurtful to the business. The best possible PR you can get is good word-of-mouth, and good word-of-mouth is engendered by treating customers and employees with respect. Why do businesses advertise themselves as the best place to work for? Why should we as consumers care that Continental treats its employees well? Because we know that if the company treats its employees well, then the employees will treat us well.”

Weinstein added, “Let’s look at being fair. If you see a co-worker ripping off the company, let’s say something as seemingly minor as taking money from the petty cash drawer for their personal use or charging personal expenses to a client. You see this happening, and let’s say you see it on a repeated basis. And the person’s on to you and says, ‘Please don’t tell anyone. This company’s doing so well they’re not even going to notice.’ That is ultimately unfair to customers because they’re the ones who are paying for this. It’s unfair to the company because it’s wrongful gain. And you’re cheating yourself ultimately because you have to be able to look yourself in the mirror and sleep at night, and know you’re a person of integrity. In ‘Gone with the Wind,’ Ashley would have loved to have run off with Scarlett, but he said, ‘Honor prohibits me from doing that.’ When we witness wrongful conduct at work and we do nothing, we become partly accountable because we were in a position to stop it and we failed to do so.”

Despite the good things that come from maintaining an ethical workplace and attitude, Weinstein said people still want to know what’s in it for them. How does pointing the finger at a thieving co-worker, for instance, directly benefit me? “When I started teaching ethics in 1989 after I got my Ph.D., I thought, I’ll appeal to people’s moral sensibility, and everyone will buy into this notion of ethics because we’re all high-minded,” Weinstein said. “Then I traveled around the country and Europe, and I found out how the world really works. The way the world really works is it comes down to this: People want to know, ‘What do I get out of it?’ It turns out that the best thing we can do for ourselves, the best way to feel good about ourselves, the best way to prosper professionally and personally is to take ethics seriously. So, it’s not just the right thing to do, it’s proven to be good for us. Obviously we shouldn’t do the right thing because we benefit in the long run. That just happens to be a nice consequence of it, but all roads lead to nirvana. It doesn’t really matter to me if businesses decide to beef up their ethics awareness because it’s the right thing to do or in the long run it’s good for business. As long as it gets done, I think that’s the important thing.”