While 90% of UK FTSE 100-listed companies have a publicly available code of ethics, those codes lack clarity in many cases, according to the Institute of Business Ethics (IBE).
The body rated 57% of ethics codes published by FTSE 350 companies as good, but said; “The greatest room for improvement is in language and tone – clear drafting with tools that employees can use to make ethical choices, and good use of FAQs, images and other communication methods to enable engagement.”
Smaller and worse
Yet only 40% of FTSE 250 companies publicly published such a code and of those that did IBE rated a slightly smaller number (52%) as good – compared with 63% for FTSE 100 businesses.
IBE said that codes that had been updated in the last three years were more likely to be scored good than older or undated codes. In addition, it strongly recommended codes include an unequivocal assurance of non-retaliation against those who raised an ethical concern.
More ethical culture
In a separate study among employees by the consultancy Ethisphere, many said that they had a more favourable perception of their company’s ethical culture during the pandemic.
“Amid such trying conditions, the culture of ethics they had in place before COVID-19 grew even stronger – helping to reduce risk, retain talent, and build value within their organisations,” the report said. “However, during the pandemic, although people became more willing to report misconduct and observed more of it, they tended to report it less.”
In particular, Gen Z employees were the least likely to report bad behaviour.
The consultancy said that organisations must ask three questions of their ethical frameworks. First, do employees understand what is expected of them when it comes to ethical behaviour? Second, do they know where to go to if they have questions, and if they need help or have made a mistake? Finally, do they trust the reporting process enough
to engage in it? Or do they fear retaliation or lack of an appropriate response?