If anyone needs a holiday this summer, it’s the leaders of the troubled Co-operative Bank, who’ve spent most of the year preventing the institution sliding into the financial abyss whilst arguing amongst themselves about its future governance. But while the bank’s bosses may be looking forward to getting away from it all, they’ve got a bit of light reading to take with them – the results of a month-long consultation exercise into how to update the Co-op’s ethics policy and wider values.
Rewriting its ethics policy is an important step in the bank’s recovery. Behind many of the problems experienced by the Co-op in recent years has been its failure to honour the ideals that the organisation has tried to live by in the past. By reaffirming those ideals – and modernising them where necessary – the Co-op is making a very public statement that it hasn’t forgotten what it is supposed to stand for.
Is there value in smaller businesses doing something similar? The short answer is definitely. In a society that has become increasingly sceptical about the behaviour of commercial organisations, the success of companies depends on their ability to build relationships of trust with customers, employers, suppliers and the wider community. That’s true for companies of all sizes.
In fact, small businesses have an advantage in this area. Their owners and managers are more visible than the leaders of larger organisations, so they have an opportunity to set the tone. Still, there is a good case to make for a more explicit approach to ethics. Not least, businesses are increasingly asked about their ethical credentials by partners in the supply chain.
The benefits for companies of setting down a formal ethics policy are numerous. You can expect to attract higher quality staff and to retain them for longer; you’ll see reputational benefits with customers and suppliers; enjoy lower costs for borrowing and insurance; and generate invaluable goodwill in the community. A written policy that is available for public inspection gives you an opportunity to make your pitch to stakeholders – and gives employees a framework for thinking about how to behave in the company’s name.
How, then, to go about writing such a policy? Approaches vary, but this three-step approach makes a great deal of sense for many businesses, at least as a starting point.
1. Identify the core values of your business
These may include both business values – customer service and reliability, for example – and ethical values – honesty and respect are good examples. Think hard about what you want your business to be known for – and ask employees what they think too, since they’ll be expected to live by the standards to which you aspire.
2. Draw up an ethics code
Your ethics code translates your business’s core values into practical commitments – you can’t expect to cover every possible situation that might arise, but you can establish the spirit with which your business will act. If you’re not sure what form the code should take, organisations such as the Institute of Business Ethics publish draft codes that might provide inspiration.
3. Embed the code in your business
This is the most important step. All employees should be introduced to your code by the most senior people in the business, in order to underline its importance. Give employees forums through which they can discuss how the code relates to their roles. And above all, lead by example – if the managers and owners of a business demonstrably live by its values, there’s more chance that employees will do the same.
David Prosser is a freelance journalist who specialises in writing about business, entrepreneurs, personal finance, property and investment. David has worked across all the major broadsheets including The Observer, the Daily and Sunday Express and, most recently, The Independent, where he spent several years as Business Editor managing the newspaper’s business coverage. This is David’s final blog in the series.