Ethics

Ethics A Strong Ethical Culture

The Value of Corporate Social Responsibility

Many companies are reassessing how they do business in order to attract employees. The country is still recovering from the pandemic and many people have quit their jobs or simply not returned to work. This has left employers scrambling to find and attract employees over the past year. Many companies are still operating under shortened hours or have closed altogether. So, how do companies solve this problem and attract employees back to the workforce? One solution is for a company to rethink its purpose, brand, and how it values its employees. This starts with looking at its corporate ethical culture and its corporate social responsibility (CSR) initiatives. CSR initiatives help a company self-regulate and be held socially and ethically accountable to itself and others. Maintaining strong CSR initiatives help brand a company as ethical, responsible, and a strong contributor to society. A company with a strong ethical brand will normally see increases in short-term profitability as well as long-term sustainability. Many companies are striving to be recognized as leaders in CSR initiatives because it helps recruit and maintain top-quality employees and loyal customers.

Walk the walk

However, establishing a strong ethical culture and CSR initiatives requires more than just composing a policy and publishing it on the company’s website for good public perception. It includes commitment and action from the top leaders in a company. If the top leaders do not make strong ethical decisions or set a good example, how can a company expect its employees to act differently? Some top leaders know how to “talk the talk” but do not “walk the walk,” whereas genuinely ethical leaders practice what they preach. So how does a company establish a strong ethical culture, with positive CSR initiatives, and get its top leaders to perform ethically in their professional and personal lives? There is no one correct answer to these questions, but the answer starts with valuing all “stakeholders” in a company, and not just the shareholders. The stakeholders in a company include, but are not limited to, customers, clients, employees, and suppliers, along with the communities in which the company operates. Many companies maintain a narrow focus on the profitability for shareholders when making company decisions. However, the next generation of employees (e.g. millennials and beyond) are demanding a stakeholder approach from companies. Most people would rather work for a company that prioritizes human-value and environmental, social, and governance factors over profitability.

Ethical Human-Value Responsibility

Companies should aim to achieve fair treatment of all stakeholders. There are several ways a company can embrace ethical responsibility. For instance, a company could institute its own pay scale that starts higher than the minimum wage. A company could evaluate employees on several different scales unique to each employees skill set and it could institute a bonus structure. A company could pay for the college education of its employees. A company could adopt a generous parental leave plan or flexibility in working hours for single parents. A company could also have a day care on-site, or pay for child care. A company could provide health coverage and on-site health facilities (e.g. gym, counseling, doctors). There are so many things that a company could do to show all stakeholders that they are valued. The possibilities are limitless so long as a company thinks outside the minimum legal requirements.

Environmental Responsibility

A company does not have to do a lot to demonstrate environmental responsibility and reduce its carbon footprint. A company can make small changes to have a great impact, such as maintaining recycling containers in its offices or going paperless. It could also maintain an employee carpool or public transit incentive program to help reduce pollution of its employees in major cities. Further, a company could provide funding to environmental organizations and participate in earth day events. These are small things that every company could do to help in the cumulative effect of saving the environment.

Philanthropic Responsibility

Philanthropic responsibility refers to a company’s charitable organizations in which it supports. Companies often dedicate a portion of their earnings to particular charities, or create their own charitable organizations, which is something Barnes & Thornburg did in 2020 when it created its Racial and Social Justice Foundation. Companies like to have their employees involved in the charitable organizations and may even provide paid days off for employees to dedicate their time to the charitable organizations.

Economic Responsibility

Economic responsibility is the practice of a company backing all of its financial decisions, and paying all its debts if incurred. A company with a strong financial core is more likely to remain ethical and have positive CSR initiatives. Normally companies with faulty finances are more vulnerable to potential corruption and unethical behavior. HCBM Cari Sheehan is of counsel with Barnes & Thornburg, where she sits on the firms Professional Responsibility Committee. She focuses on legal ethics, professional accountability and loss prevention. This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.