5 ways to encourage ethical behaviour in your organisation

Even though numerous scandals through time, such as Enron or Tesco's accounting scandal, have taught us about the dangers of unethical behaviour, creating an ethical workplace can often fall to the backburner. So, what should you be doing to encourage ethical behaviour in your organisation? Find out with our 5 top tips.

1. Embed good ethical practice into organisational culture

Corporate culture is a complex mix of factors which combine to form the shared meanings, attitudes and beliefs that your team holds. It's important to monitor your organisation's public face, internal structures, and the unwritten rules of your business to make sure the expectation of ethical practices are encouraged through all components of your organisation's culture. Clearly stating your organisation's ethical codes in corporate objectives and sharing them as policies makes expectations clear and facilitates ethical behaviour throughout the organisation.

2. Management should lead by example

Managers are often the role models for their employees and should set an example of honesty and openness. If senior staff are seen adhering to ethical values and policies, this is likely to be followed by others in the organisation. Management should also discourage overly tight deadlines and "challenging" targets to remove the need for their teams to feel like they need to cut corners. Employees should be stretched but objectives and goals should be realistic and achievable.

3. Effective communication

This is more likely to be an issue for large organisations with a bureaucratic and hierarchical structure where senior staff may become disengaged and distant from the employees. In places we lose personal contact, staff may be tempted to conceal failing or dysfunctional behaviour. Staff may feel inclined to tell their managers what they would like to hear. Encouraging effective and open communication throughout your organisation is crucial so your team feel they can trust and report unethical practices to their managers without fear of negative repercussions to them.

4. Effective whistleblowing process

Whistleblowing is a useful source of information about unethical practices in an organisation. Organisations should ensure the process is non-threatening and straightforward to encourage the flow of information, with both formal and informal pathways for reporting. You must trust your team to report honestly, not maliciously, and build up trust to encourage clarity, honesty, openness and fairness.

5. Polices and auditing

Internal audit and management review has a big role to play in the creation and maintenance of an ethical culture. The organisation should have a clear ethical policy that states its framework of ethical values and internal audits can be used to review working practises and make sure these values are being adhered to. Management should also back this up with relevant training and raising awareness. Internal audit and management review involving different stakeholders can help evaluated the effectiveness of such policies.

We must remember that ethics isn't a one size fits all approach and requires careful consideration of your organisation’s policies, culture, communication, and processes.

Want to learn more about ethics in accounting? Check out all our verifiable CPD on ethics and professionalism!