How COVID-19 is creating new ethical dilemmas for business leaders
With social media holding companies to account and socially-conscious consumers willing to vote with their wallets, ethical business leadership has become vital.
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Ethical business leadership has become more important than ever in an era of social media and consumers that are willing to vote with their wallets.
Whether an issue of discrimination, sexual harassment, environmental damage or financial misconduct, allegations of unethical behaviour within a business can destroy years – even decades – of built-up community trust.
Now, the COVID-19 pandemic is creating new ethical dilemmas for business leaders and managers.
Cranlana Centre for Ethical Leadership chief executive Vanessa Pigrum said the level of trust in large institutions and governments had dropped significantly in the past five years but leaders were increasingly being held to account.
“The level of public awareness of what is going on in companies and the level of public expectation to be able to scrutinise, that’s increasing every day,” she said.
“Everyone has the ability to post their opinion online.
“If your customers don’t trust you, they are going to find some other organisation or product or service they do trust.”
Ms Pigrum said new ethical dilemmas were being raised as workplaces recovered from the disruption of COVID-19 restrictions.
“Leaders will need to be careful there aren’t two separate work cultures developing – those in the office and those at home,” she said.
“There will be a need for rigorous examination so that your team, no matter where they are working, have the same access to decision making and communication and a sense of fairness and transparency.
“The biggest decisions are often made over the kettle in the shared kitchen and incidental exchanges that happen in an office so if you are mostly working from home but some people are working in the office, you don’t have that same level of informal interaction.”
Fair Work Ombudsman executive director for enforcement Steven Ronson said the importance of ethical decision making by corporate boards had been especially clear during COVID-19 disruption.
“(We) have been dealing with a lot of really distressed employers and employees that have had to navigate the challenges imposed by the pandemic,” he said.
“Our call centre has had record numbers of calls from workers trying to work out if they are being ripped off and whether they are being treated correctly under JobKeeper rules. “JobKeeper has really highlighted the critical role corporations play in workers’ lives and I think that goes to the heart of ethical decision making by corporate boards.”
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Adelaide resident Mr Ronson said boards had become increasingly aware of their social license in the last couple of years.
“Superannuation funds hold close to $3 trillion and industry super funds account for well over half of that and those investment decisions from super boards are putting pressure on corporate boards to exercise their social license appropriately so they have got to make ethical decisions,” he said.
“In the last couple of years, companies are now held to account for not paying staff correctly or paying tax.
“There is pressure through social media that companies have to behave ethically.
“You have got to make a profit but you also have to show you are accountable, transparent and doing good.”
Mr Ronson, who attended a six-day Executive Colloquium with Cranlana Centre for Ethical Leadership last year, said aspiring leaders hoping to refine their ethical decision-making skills should ask themselves two questions before an action: Is the action wholesome? Is it going to benefit as many people as possible?
“Always be mindful, even under pressure,” he said.
“Be compassionate, prudent, fair and try to pause during the day and think ‘Is what I am doing going to result in fairness and justice?’
“You have got to check yourself and be mindful and reflective.”