Business Brief

Business brief  Ethics

Bribery and corruption

Whether persuading key officials to give authorisation to set up in business, grant government contracts, or just let your goods through customs, the alternatives for the word bribe are many and varied: kickback, sweetener, backhander, baksheesh and the greasing of palms. The law courts, if it gets that far, will refer more prosaically to illicit payments and defendants in such cases may just talk about commissions. If payments go to a slush fund to finance a political party, this form of corruption may be referred to as sleaze, especially by journalists.

Price fixing

When the strain of competing gets too much, competitors may go for the easier option of price fixing, so that each can maintain a reasonable profit margin. Competitors who do this form a cartel. This is an area where outsiders may only find out what is going on if one of the managers involved contacts the authorities. Someone doing this is a whistleblower.

The corporation as good citizen

All businesses increasingly want to be perceived as good citizens. Different types of business face different ethical issues:

• Financial institutions try to prevent insider trading by erecting notional barriers called Chinese walls between different departments (for example, to prevent someone in share trading from discovering from the mergers department that a particular company is involved in merger talks and that its share price will soon rise).

• Companies selling personal finance promise to ensure that clients are sold appropriate products for their needs, and thus avoid mlsselling.

• Manufacturers claim that their products are green or environmentally friendly in all stages of their production, use and disposal.

• Cosmetics companies say that their products are not tested on animals.

• Clothing companies claim to trade fairly and that their products are not made in sweatshops paying subsistence wages and using child labour.

The treatment of employees

Perceptions that a company's behaviour is ethical will also be increased if it has a policy of equal opportunities, or in the US, an affirmative action program, to ensure that people are recruited and promoted on the basis of merit and not discriminated against on the grounds of race or gender. (Women who get promoted so far and no further complain of the glass ceiling.) There may also be established complaints procedures, and specific policies on issues such as bullying and sexual harassment.

Codes of ethics and mission statements

A company's internal code of ethics contains its ethical credo and may cover any of the issues mentioned above. Some of these issues may also be contained in its mission statement. And there may even bean ethics ombudsman to check that they are put into practice and deal with complaints when they are not.