I like to believe that I am an ethical person in all that I do. I believe I behave ethically because it is the right thing to do without ulterior motives.
The credit for my ethical behavior goes primarily to my parents, who not only told me to be ethical, but more importantly, were outstanding role models of ethical behavior. This behavior was further enforced for me through eight years of early Christian education, four years at the University of Notre Dame, and 15 years of active duty in the military.
In each of these environments, I was fortunate to be surrounded by mostly highly ethical individuals, who positively impacted my ethics and morals. During the past 20-plus years, I have had the opportunity to study business up close. As I observed how businesses and business people conducted themselves, I learned that good ethics is not only good for the soul, but it is good for business.
I have found that for a business to be successful, it must treat each of its major constituencies ethically, or the business will likely perform sub-optimally. In my first column for the Augusta Business Daily, I would like to show how this is true as it motivates me to help produce ethical future business leaders at Augusta University’s Hull College of Business.
The first major constituency of a business that it must treat ethically is its employees. If you do not treat your employees ethically, their trust in you will be undermined and they will leave your company.
Clearly, without employees, you will have no way to provide your goods and services, and therefore, will have no business. So, we must treat our employees ethically and that is done in many ways. One way is to always be honest and respectful to your employees. The lack of honesty and respect will undermine the relationships in your workplace.
In addition, you need to provide your workers with appropriate compensation and benefits for the work that they perform.
Another important aspect of ethics in the workplace is an environment that is physically and mentally safe for the employee. Again, this demonstrates respect for your employee. While this is not a complete list of ethical behaviors toward employees, it provides a great start toward retaining your employees.
Probably, the most obvious constituency a business must treat ethically is its customers. If you do not treat your customers honestly and respectfully, it is likely that they will not continue to do business with you. This means pricing your products and services appropriately and providing fair value for that price. It means honoring guarantees, taking back returns for unsatisfactory performing items, and providing additional service when it is not delivered appropriately the first time.
In our current social media environment, “word of mouth” spreads much more quickly than it did a couple of decades ago. If you treat customers unethically, you can bet it will be seen on social media immediately and it will likely do irreparable harm to your business. Clearly, just like your employees, treating your customers ethically is essential to the long-term survival and success of your business.
While treating employees and customers ethically is both obvious and essential, there are other constituencies businesses must treat ethically that, while they might not be as obvious, are just as essential.
One such constituency is a company’s supply chain partners. Whether those are your “upstream” partners, those that provide you with raw materials and/or parts, or your “downstream” or “channel” partners who actually sell your products, it is critical you deal with them in an ethical manner. Providing those partners fair prices and terms for buying and selling items is critical for long-term relationships that are important to the success of your firm.
Another important, less obvious constituency is your investors. Whether you are a large company that is traded in public markets or you are a small business that is funded by friends and family, you need to be an ethical steward of your investors’ funds. If you are not, your sources of investment will quickly dry up, and similarly to the loss of employees and customers, the loss of investors will have tragic consequences for your firm.
Finally, businesses must treat the communities they operate in ethically as well. Being good community citizens will allow the business to flourish, whereas if they break laws, pollute the environment, and do not give back to their community, they will quickly see their customers go away.
As you can see from my examples above, good ethics is good business. Treating your employees, customers, supply chain partners, investors, and community ethically will significantly enhance the value of your company.
This is why ethics is a critical component of the business education we provide at the Hull College of Business. Ethics is pervasive throughout the curriculum, starting in our first business course, “Introduction to Business and Professional Skills.” We believe ethics is the most important professional skill, so we present it early and often.
Finally, we demonstrate our commitment to ethics in business each year by presenting the Russell A. Blanchard Distinguished Lecture in Ethics, which honors the ethical example set by Mr. Blanchard, the one-time CEO of Georgia Bank and Trust, which endowed this lecture series, as now part of South State Bank.
This year’s lecture will take place on Thursday, Sept. 22 at 6 p.m. in the Dr. Roscoe Williams Ballroom in the Jaguar Student Activities Center (JSAC) on Augusta University’s Summerville Campus. The speaker this year is retired Army Lt. General, Leslie Smith who will discuss “Why Leadership Matters: Building Trust in Organizations.” For more information, visit https://www.augusta.edu/hull/blanchard-ethics.php.
The lecture is free and open to the public and I am sure those who attend will learn key lessons that help make their businesses better. I hope to see you there!
