Ethics at work - A brief review in the private sector (Part 2) |30 May 2016

With the move towards the ‘En nouvo Sesel’ and reduced levels of bureaucracy, there is increased need to demonstrate openness and accountability.

Public service organisations, private sectors, charities and mutual benefit organisations are heavily controlled by statutes and regulations, which include standards of conduct. Extensive safeguards are also built into internal procedures. Financial regulations, schedules of reserved or devolved authority, separation of powers, regimes of corporate governance and internal control, declaration of personal and financial interests, rules for reporting gifts and hospitality all exist to create an environment free from abuse, fraud and corruption.

Sound systems like these are the first line of defence against unethical conduct. But following the rules is not enough on its own: professional ethical conduct requires us to think about the reasons behind the rules, and constantly monitor their effectiveness.

Unethical behaviour by individuals at work could range from serious fraud, such as setting up ‘ghost’ employees on the payroll in order to steal money, bullying a new member of staff, stealing stationery from the office supplies or ‘throwing a sickies’. Though serious fraud can be perceived to be relatively rare, it is fairly common to see unethical behaviour in organisations in its various other forms. If someone committed payroll fraud, the consequences could include:

• Jail for the individual, and termination of their professional career.
• Loss of public funds, if these cannot be fully recovered.
• Bad publicity for the organisation concerned.
• Suspicion and mistrust in the organisation for the foreseeable future.

What if someone called in sick a few times a year, when they were well enough to work? The consequences might be as follows:

• Colleagues burdened with extra work, with the potential for further absences due to stress/exhaustion.
• Reduced ability to meet customer needs, which could be particularly serious if the individual deals with vulnerable people or high-risk situation.
• Spending required on temporary staff to cover the absence, leading to a reduced ability for the organisation to pay bonuses to staff or dividends to shareholders.
• If funded by taxpayers or service users, increased taxes/charges may be required in the future to put cover arrangements in place.

This may sound far-fetched, but the fact is that in the Seychelles there is a good percentage of sick days taken by staff that are thought to be not for genuine reasons. It is widely believed that this could equate to thousand’s days a year or more, costing the economy millions if not billons of rupees. This is why corporate governance codes stress honesty so strongly, as organisations are reliant on employees to come to work when they are well, to work hard and to ‘do the right thing’.

Observing good ethical behaviour includes, but is not limited to, the following principles that should apply to everyone at work:

• Selflessness – holders of public or private office should make decisions solely in the best interests of the organisation they are working for. They should not aim to create unwarranted material or financial benefits to their friends and family.
• Integrity – office holders should not be under any financial or other obligations that might influence them in their decisions.
• Objectivity – all decisions should always be made on merit.
• Accountability – office holders are accountable for their decisions and actions. They must submit themselves to scrutiny when necessary.
• Openness – office holders should be as open as possible about their decisions and action and state their reasons. The reasons should only be withheld when the wider public interest demands.
• Honesty – office holders must declare any private interests that relate to their duties.
• Leadership – office holders should promote and support these principles by leadership and example.

In addition to the above principles for acting in the best interest of the organisation requires:

• Defining outcomes in terms of sustainable economic, social and environmental benefits;
• Promoting values for the whole organisation and demonstrating good governance through behaviour.
• Developing the capacity of the organisation, including the capability of its leadership and the individuals within it;
• Managing risks and performance through robust control; and
• Implementing good practices in transparency and reporting to deliver effective accountability.
• It should never be a case where someone may find it difficult to maintain the ethical principles in the face of political pressure to espouse a certain viewpoint.

Corporate governance and ethics are sometimes included together in codes of conduct and guidance, and are sometimes held to be two distinct areas. Broadly speaking, governance involves the behaviour of the organisation and its effectiveness, whereas ethics focuses on the behaviour of the individual and its impact on the organisation. Ethical practice is fundamental to good governance and is based on both trust and transparency.

Codes are not entirely prescriptive, but they should provide some guidance to individuals who are struggling with an ethical problem, and perhaps assist them in developing guiding principles and values that will apply to all areas of professional activity. As noted above, though, these codes may be meaningless if the individual is not honest enough to attempt to apply them in the spirit in which they are meant.

Arvind Harris

University of Seychelles