Our lives and our perspectives on life have immensely changed, thanks to the prominent concept of “Globalization”. Globalization and technological developments have downsized the world remarkably. However, scandals that no company would desire, have gained a much wider view.
Such scandals were followed by bankruptcies, sales decreases and related losses of profits, penalties due to violations of legal and tax regulations, and depreciation in stocks worth billions of dollars. Moreover, large budget expenditures for the recovery of lost reputation and customers have also become inevitable.
Especially after the 1990s, the concepts of “Business Ethics and Sustainability” have started to be placed at the high up of the agenda. As a result of the emerging scandals, ethics has become the most important building block of the management’s manners of doing business and of the corporate cultures, as a consequence of the decreasing resources, increasing competition, and pressure from stakeholders and civil society, the legislation that changes and develops in the direction of transparency.
Now is the time to do things differently
Particularly in developed societies, our interpretation of life is getting more refined and our tendency to do things that touch the essence of human beings is increasing. The fundamental principle may be formulated as “protecting ‘Human’ and ‘Human Dignity’”. It is observed that the studies carried out in recent years are based on the said principle. In brief, what matters is the human being.
While this change manifests itself in personal efforts, it has also served as an important impetus for companies to make major strides in this regard and to change their manners of doing business. Along with the concept of responsible company and sustainability policies, it has become a substantial need to assume responsibility in all stages of production, marketing, sales, and after-sales, and to prioritize ethical codes. Furthermore, international studies have concretely demonstrated that successful business results can be achieved as a result of developing a common language, culture, and even legislation on all kinds of anti-corruption, business ethics & sustainability issues in companies.
In this context, companies aim, for their customers, society, and the environment, to conduct production by incorporating high technological advancement and to achieve healthy, reliable, competitive, and distinctive business results in accordance with international technical and quality standards. Meanwhile, it has become an important mission to pursue responsible business practices toward the environment and society. As a matter of fact, “responsible companies” that are sensitively and responsibly aware of social issues and the environment must produce highly recyclable products and services in possession of efficient waste management, produced primarily by means of ensuring a cost-benefit balance and considering sustainability principles.
Sustainability is enabling the permanence of human life while ensuring the continuation of production and diversity. In the best sense of the term, it signifies the capability of satisfying our own needs without compromising the needs of future generations. It refers to leaving to future generations, a world whose economic, ecological, and social conditions can be maintained. Sustainability is linked to the economy, society, and ecology while it represents awareness. It indicates both a social and an individual target. The goal is to reach this target. Sustainability policies support efforts that contribute to economic and social development and provide sensibility towards issues that concern society.
On the other hand, business ethics appears to be the primary driving force behind the increase in intangible assets such as reputation and brand value, as it becomes a corporate culture, is internalized and managed, and can be integrated into all functions of the company.
Many studies have been conducted concerning the contribution of business ethics and effective ethics management to company productivity. Studies reveal the direct benefits of behavior in line with business ethics for companies, as well as the importance of added values and indirect benefits generated as a consequence of the prevention of unethical behavior and the management of ethical risks. Companies are now obliged to take this fact into account.
The direct and indirect benefits of business ethics and its contributions to companies can be listed as follows; building a strong corporate reputation, creating and sharing an ethical culture that extends to all stakeholders, ensuring the interest of corporate investors by complying with the principles of transparency, fairness, and accountability generated from business ethics and reputation, establishing the necessary climate for strong partnerships, the opportunity to work with industry leaders, providing a working environment preferred by qualified and experienced managers, being a company of choice, ensuring and increasing employee loyalty, increasing of the brand value, improving the internal climate related to efficient resource use and compliance with sustainability policies, and thus increasing efficiency, effective risk management.
Whereas in terms of respect for human rights; honesty, confidentiality, protection of personal data, refraining from creating conflicts of interest, protection of trade secrets, and fairness are required. Therefore, companies now are obligated to write and implement their ethical codes.
- People say that “there has never been a problem before”, until the day a problem occurs!
- If you overlook one important thing, you may end up being the one who did not put any effort into anything.
- Avoidable mistakes are the most common mistakes.
Among the elements that define the company’s success, concepts such as responsible citizenship, the effectiveness of sustainable production policies, innovation policies, and reputation are at least as important as financial data.
Writing an ethics code is pretty easy; what is difficult and valuable is to prepare an ethical code that reflects a viable, comprehensible, and applicable ethical program constituting the cornerstone of the company’s written culture, and more importantly, to ensure that all employees shall faithfully implement it. WE HAVE TO BELIEVE. The result obtained from any work done with faith shall always be positive. It is particularly important for the managers to i) set a good example by fully complying with the rules, relevant policies, and procedures, ii) always encourage ethical behavior and business conduct, iii) ensure that all employees have access to these rules and they complete their training on ethical issues and behavior principles related thereto, iv) create a safe environment where the team members are able to raise their ethical concerns and encourage them to raise their questions and concerns, and v) make sure that the concerns raised concerning ethics and rules are taken into consideration and tracked.
Employees are also required to act in accordance with laws and regulations under all circumstances, to know, acknowledge, internalize and act in accordance with the rules, principles, and values embraced by the company rules.
The main function of an enterprise should be to create wealth and prosperity for society by producing products or services. Therefore, the success of any business shall provide a return as social welfare.
In brief conclusion; all national and international companies should now prioritize Ethics, Compliance, and Sustainability studies on their agenda and such prioritization must be internalized by all company employees. We must always ask the following questions.
- Is this behavior legal, ethical, honest, and fair?
- Do this behavior conflict with the laws, rules, and our company’s principles and values?
- Is this behavior likely to affect my reputation and the company’s reputation?
- Am I capable of assuming the necessary responsibilities and defending my behavior after having conducted it?
- What would my colleagues, the senior management, my family, and my friends think if they knew about this behavior?
As an epilogue;
“If you govern the people legalistically and control them by punishment, they will avoid crime, but have no personal sense of shame. If you govern them by means of virtue and control them with propriety, they will gain their own sense of shame, and thus correct themselves.”
The salvation of society is possible with one person taking a step. We have not inherited the earth from our ancestors, but have borrowed it from our children!!! We have to do what is necessary, both as individuals and as companies.
Att. at Law & Mediator
Bilge Aydın Temiz
Vona Law firm
Disclaimer: This information and our comments above are for guidance purposes only and should not be regarded as a substitute for taking legal advice. Vona Law Office makes every effort to ensure accurate and up-to-date content, however, it may not reflect the most current legal developments based on the amendments to the applicable laws and legislations after the publishment of this article. Therefore, nothing in this article should be considered legal advice and you should consult with lawyers before making any decision or taking any action based on the information included in this article.