GUIDING PRINCIPLES Avoiding ethical missteps that can sink your business By Julian Ryall
There are many ways in which damage can be inflicted on a company. Often, an organization’s financial standing or reputation are at the mercy of factors beyond the control of management. Harm can also be self-inflicted, however, through poor decision-making or a strategic error. Arguably the worst—and therefore most damaging—mistake that any company can make is a lapse of ethics that drags its previously good name through the mud. An ethical error can see clients losing trust in a company’s products or services, leave investors no longer wishing to be associated with the operation, or find the most talented employees—sensing which way the wind is blowing— jumping ship for a safer place of work. In a worst-case scenario, these factors combine to become the death knell of a company. We do not have to look far for an example: Lehman Brothers Holdings Inc. filed for bankruptcy in 2008 after 158 years of largely faultless investment banking.
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Losing the confidence of the market, this industry stalwart collapsed and its fall had worldwide economic repercussions. LASTING IMPACT More than a decade after that debacle—and despite the lessons learned—ethical standing remains an area of critical concern for companies, especially in the realms of technology, privacy, and protection of customer information. That recognition has also deepened on the part of consumers, who are demanding higher standards from the organizations with which they do business. For companies operating across international borders—with local corporate cultures that are often extremely different—the complexities are, inevitably, multiplied. “Reputation is critical to doing business in Japan,” said Timothy Langley, president of public affairs consultancy Langley Esquire.
TIMOTHY LANGLEY President Langley Esquire
