Why an ethical business should matter to you
While most business owners understand the importance of their legal obligations, not so many are as committed to ethical considerations.
These businesses though are missing out on a huge opportunity. These days, more than ever, ethical businesses have a competitive edge.
They are consistently acknowledged as being stronger, healthier and more attractive businesses to work for and have more marketing value.
On the flip side, with the proliferation of social media, businesses are held to account more than ever and can have their ethics called into question on a daily basis.
Organisations participating in unethical behaviour can see a negative effect on their sales and the bottom line and have their reputation significantly tarnished.
A business owner running an ethical business (especially one aligned with your own personal values) can create personal satisfaction and peace of mind as well as help minimise reputation risk, loss of profits and potential litigation.
Here are our top 5 tips for creating and running an ethical business:
1. Define your ethics
Ethics are a set of moral principles or beliefs set by an individual or society. While ethics vary from one individual and section of the community to another, there are some basic ethical considerations that are held by the majority of the community or selected parts of the community that may be relevant to your business.
It’s important as an individual that you take the time to sit down and define your own personal values and ethics and those for your business. You should also involve your team in identifying what ethics are important to the way you do business internally and externally.
2. Identify what’s important to your stakeholders
You should consult your key stakeholders such as customers, suppliers and decision makers about what’s important to them.
You should have a clear picture of what your customers hold most dearly and what could potentially trigger a negative and positive reaction from them.
For example, a grocer located in a trendy inner suburb may come under fire for its association with unethical animal-keeping practices if it stocks only caged eggs.
Whereas a grocer that only stocks free-range eggs may gain ethical credibility and support within their community as well as increase sales.
You can get a good idea from social media what’s important to your local community and customers, but you shouldn’t be scared to just ask them.
3. Codes and systems
There may be one or more codes of practice, codes of conduct or codes of ethics that your business should comply with.
Codes of Practice are voluntary guidelines (though sometimes they may support existing legislation) usually developed by an industry or organisation specifying how they agree to behave as a group.
You should source information about codes that are specific to your industry. You can check out these industry specific fact sheets. You may also like to to consult a peak industry or membership association for your industry.
If there isn’t a code you need or want to follow, you may like to develop a code of conduct for your own business and team to support your ethics.
You should also develop and implement policies and procedure to support your code. You may like to promote your support of a code to your stakeholders and broader community.
4. Model and lead
As the business owner it’s your role to lead by modelling the agreed ethics and values. You should advocate and acknowledge behaviours and actions that support your ethics. You should also call out actions that conflict with your ethics.
5. Give back to the community
Once you know what values are important to your team and stakeholders you may identify ways of giving back to the community such as volunteering opportunities, sponsorships, donations, partnerships and workplace giving.
Remember ethical businesses are a win-win for everybody!