7 Common Ethical Concerns in Businesses Today
Regardless of the industry, unethical behaviour and illegal activity occur in the workplace every day
Unethical behaviour greatly diminishes employee morale and business integrity. From fraud to discrimination to privacy breaches, there are many areas where misconduct takes place. Unethical behaviour in the workplace has also notably been on the rise with the events of the COVID-19 pandemic. We asked a group of business professionals about the most common ethical concerns in businesses today and this is what they said:
- Racial and Gender Equality
Michelle Diamond, CEO of Elevate Diamond Strategy voices the importance of adhering to Environmental Social and Corporate Governance and how the COVID-19 pandemic has expedited the need for racial and gender equality:
"Common ethical concerns that are seen in businesses today include decisions or lack of decisions made regarding racial and gender equality and the environment. Many companies turned a blind eye to these issues in the past and cannot do so any longer. ESG is now at the forefront of many CEOs and Boards of Directors as they realize the impact it can have on their companies. COVID-19 and social unrest have accelerated this need as with people being home and online, they have more time to focus and pay attention to these issues."
Jeff Dundas, Founder/Owner of Talk Central further discusses discrimination in the workplace, and how recent laws and best practices have been implemented to reduce the impact:
“Throughout recent history, significant improvement has been made regarding discrimination based on gender and race. New laws and best practices have been put in place to minimize and deter discrimination in all forms. While discrimination does still exist, there has been a resounding improvement throughout recent years.”
As we have come a long way, there are still far too many instances where poor decisions are made based on gender and race. Those who witness or experience such behaviour need to be able to confidently voice their concerns without fear of retaliation. As such, many organizations are looking to technology to allow employees safely speak up and help contribute to a culture of integrity.
An issue that has been in the spotlight in the marketing industry since the rise of the pandemic is overpromising products or services to potential clients in order to close a deal. James Pearson, CEO and Small Business Evangelist at eVenturing Enterprises shares his insights:
“This ethical concern is a very common indisposition during the marketing process. Salespeople tend to create false hopes and aggrandize products or services (without discussing the proper information and procedure) just to close a deal. This ethical issue defies transparency, integrity, and the building of trust between the company and its clients. It can also breed an information gap which results in bad business credibility.
“On the other hand, I think the pandemic has impacted this type of ethical issue among businesses. Since there was an obvious drop in consumerism, people have been focusing on buying the essential products. Thus, disregarding items that were out of their basic necessities. With this, there are tendencies that the advertising approach of businesses can include overpromising and false hopes just to get people to buy their product. In times of crisis, it is inevitable for businesses to fight by tooth and claw just to keep their business going.”
While it may feel tempting to engage in this type of activity to keep your business afloat, it will end up doing more harm than good for all involved parties. Integrity is key to the success of any business and ultimately determines your ability to maintain long-lasting relationships with your customers.
- Health and Safety
While this shouldn’t come as a surprise being in our current landscape, Dundas also mentions how health and safety concerns in the workplace have been recently brought to the forefront, with new laws and regulations in place to address these issues:
“Laws and regulations have also been implemented to decrease ethical issues regarding health and safety. From OSHA regulations to food storage requirements, the likelihood of employees becoming hurt or ill in the workplace has been drastically reduced. The recent events regarding COVID-19 have brought the importance of health and hygiene in the workplace to center stage. The increased use of face coverings, hand washing and social distancing will likely decrease rates of the seasonal flu going forward.”
The need for health and safety compliance is greater than ever and when these regulations aren’t adhered to, they need to be reported.
- Accounting Practices
Dennis Bell, Founder and CEO of Byblos Coffee explains how accounting has always been at the forefront of ethical issues in any business. This type of misconduct seems unavoidable and needs to be reported in all cases:
“Ethics in accounting practices are the number one concern in businesses today. They misrepresent their earnings and expenses to qualify for tax deductions. They manipulate their financial reports to make them look more successful. Business owners are now personally reviewing their records to ensure their accuracy. They even use accounting software tools to help them manage and keep track of their finances. As businesses struggle to survive in this pandemic, they tend to inflate their reports to look successful despite the situation. They risk themselves to legal implications for them to sustain their lives.
“At some point in time, you'll encounter these ethical issues in your business. Even if you take all of the necessary precautions, you should always be prepared to handle them. Use them as an opportunity to learn in building a better and more ethical business in this industry.”
As mentioned above, businesses can learn from these mistakes, and the best way to make this happen is to report any concerns to upper management. Whether it's suspicions of illegal activity, witnessing misconduct or having ethical concerns, these can be voiced privately using an anonymous whistleblowing hotline.
With the recent shift to remote work in response to the pandemic, new privacy concerns have developed. Rishi Chawla, Partner at Premier Brains shares her insights:
“During the pandemic, many businesses have shifted to remote workplaces and encountered new (to them) ethical concerns. One of the most common is the monitoring of their employees. While many provide equipment for their employees, many others do not, and require them to install some form of monitoring software. As the partner in a business, it’s important to ensure that the boundaries are clearly communicated with the employees to avoid misunderstandings and conflict regarding employee privacy and free speech.”
It is essential for any business to have clear communication across the board and to establish healthy boundaries. Should situations of conflict arise, employees need an outlet to safely and confidentially raise their concerns. In this case, whistleblowing software is essential for giving employees the confidence they need to speak up and enhance their workplace environment.
The COVID-19 pandemic has created several opportunities for individuals to engage in fraud, specifically in terms of unemployment benefits. Nance Schick, Esq. at Third Ear Conflict Resolution provides further information:
“One of the common ethical concerns I see for businesses today, especially small businesses, is the practice of paying employees in cash for occasional work done while the employees are collecting Unemployment Insurance benefits. This is a classic example of how we can understand behavior without condoning it.
“I understand the human concerns and that employers think they are helping the employee maximize income during periods of financial hardship. But this practice is obviously problematic. First, the employee is engaging in fraud. Second, the employer is aiding the fraud. Third, employees who have no ethical concerns about cheating ‘the government’ (by taking funds the employer has supported with payroll taxes) will rarely have any issues filing claims against the employer.”
Fraud has been especially problematic during the COVID-19 pandemic. The opportunity to receive maximum benefits has been created due to current circumstances, and employees are choosing to take advantage of this. As you can imagine, this won’t go without punishment, and these events should be reported. Taking anonymous action now will save everyone from greater problems down the road.
- Ethical Accountability
Lenny Liebmann, Partner at Morgan Armstrong LLC believes that the greatest issue right now is the lack of ethical accountability within organizations:
“The greatest ethical struggle for any business remains to engage in any ethical struggle at all. The pressures—both real and imagined—to keep growing revenue, market footprint, and profitability almost inevitably crowd out most decision-makers’ ability to give full priority to the exercise of true ethical rigour day and day out.”
While many employees refrain from giving attention to ethical concerns for the above reasons, many also hold back in fear of retaliation. This can be addressed with anonymous ethics reporting where anyone within an organization can voice their ethical concerns and remain accountable.
Not only does a compliant workplace help attract new talent, improve performance and strengthen employee morale, it also contributes to the overall success of any business.
Anonymous ethics reporting can help address any of these common issues.