I detest waste. It smacks of loss, of opportunity cost and often of laziness.
In the last 35 years, I have never witnessed such multi-level waste as that highlighted by unethical Banking conduct and consequent recommendations made in the Royal Commission. And that waste was often the direct consequence of failure to properly identify, assess, decide on and act appropriately on ethical issues. Most of us will have consistently encountered a range of ethical issues over time at work, at home and with our friends. Just because we encounter these issues, it doesn’t ensure we identify them as ethical issues, or eventually follow through to action. In fact, I often observe waste or leakage at every stage of the ethical thinking and acting process.
Consider a recent occurrence where a number of finance executives openly failed to acknowledge executive remuneration as an ethical issue – this less an exhibit of poor stakeholder analysis – more blatant stakeholder ignorance. And in cases where ethical issues are identified, it often follows that those issues are poorly considered or assessed for their likely impact thus leading to poor decision-making or inaction.
There are a range of causes of poor thinking and action on ethical issues including lack of proximity to the issue, self-centredness or even the absence of practical tools to complete an assessment.
The physical, social, economic and reputational cost of ethical oversight and poor decision-making is immense.
The time and effort to recovery will be unprecedented if recovery occurs at all.
And all because of poor ethical thinking and action.
Part of the answer may lie in effective education and development which enables teams and individuals to practically consider and act on ethical issues as they arise. An inherent barrier to effective ethical reflection and action lies both in self-interest of many business professionals and also in the historic ineffective and impractical approaches to development in the ethical arena.
While there has been an inordinate amount of research on business ethics over the years and while it is a subject of renewed interest and concern, there is a scarcity of practical tools and approaches that are understandable and able to be applied easily. In many instances it is difficult for professionals to wade through reams of academic and evidence-based research and apply that to a framework that is easy to understand and immediately implementable.
So, the benefits of early identification of ethical issues are immense. This allows the proper assessment, decision-making and action to follow.
And the avoidance of all the waste and the opportunity cost of poor decision-making. As well as the preservation of the reputations of many of our leaders and our businesses.