‘Good thinking means good business’

Michael Woodford’s dismissal from his role as president of the Japanese camera giant, Olympus, at the end of last year was a timely reminder that although ethics is rarely given the same prominence as other business issues, it’s never very far beneath the surface of modern corporate life.

We do not yet know the full facts of the Olympus saga but public opinion has sided with Woodford’s efforts not only to get his job back, but to challenge several highly unusual financial transactions within the company.

Such high-level whistle-blowing is rare. Whether or not Olympus is culpable, the Woodford case underlines the importance of having a corporate structure that is accountable and transparent.

CIMA’s code of ethics requires our members to do the right thing – even when nobody is looking. And as we move into a new year, it is a good time to review the role of ethics in our working lives.

One of our members’ greatest strengths is in the fact that the institute’s strict ethics code, together with its requirements for continuing professional development, ensures that we have an evolving skill set that is rooted in ethical behaviour. This also provides a strong foundation for the new CIMA/AICPA designation, the CGMA.

In a recent blog, CIMA’s head of ethics, Tanya Barman, quoted an observation by the well-known Enron whistle-blower, Sherron Watkins, that “serial killers often start with cats”.

In the same way, fraud and other corporate wrongdoing can often start on a small scale. This, Tanya said, is why it is so critical for organisations to have an open working culture where employees are urged to speak up about their concerns.

Although ethics has risen up the corporate agenda in recent years, employee attitudes still tend to swing between inertia (“Why bother? Who will take any notice?”) and fear (“If I speak out, I’ll be fired”).

It is the job of both employers and professional organisations to create a support system that makes these attitudes a thing of the past. If you lose trust you lose your customers, whether external or internal, and by then it will be too late.

Towards the end of 2011, the City of London’s Lord Mayor lent his support to an initiative that explored how best to “restore trust in the City”.

As one of the world’s premier financial hubs, this was a step in the right direction in terms of underlining the importance of ethics in the world of business.

Research carried out by Cass Business School within the City community showed that those who are members of professional bodies tend to feel more personally engaged in handling ethical issues.

Those who are not tend to look to senior management for action. Certainly, in CIMA’s case, ethics is embedded in the syllabus and our support services ensure members can make informed decisions.

The same research by Cass also concluded that “leadership should take action against wrong-doers and communicate these cases more openly”.

As with so many issues, the right “tone from the top” is essential. The values of a business’s leaders are the values that become embedded in the corporate psyche. As future captains of industry and commerce, our members are ideally positioned to ensure that professionalism is enshrined at every level of business activity.

We cannot predict the final outcome of the Olympus story, but boards all over the world must now ask themselves if they are doing enough to ensure that they are practising what they preach in terms of ethical integrity.

As Roger Steare, the corporate philosopher and Cass Business School fellow says, “Good thinking means good business.”