A survey by the Institute of Business Ethics has found that 57 per cent of those polled believe that businesses behave ethically. This is down from 62 per cent in 2018 and the first time since 2016 that the sense of business ethics has shown to have got worse in the poll. 

According to the Institute of Business Ethics, the biggest issues undermining public trust are corporate tax avoidance, executive pay and environmental responsibility with experts believing that HR has a key role in improving matters.

David D’Souza - Director of Membership at the CIPD - stated:

“HR's opportunity is to help senior teams to genuinely change the way that we operate, to make sure organisations are fit for the modern world.”  

He added that public perception was just one element of assessing the ethical health of UK businesses, and didn’t necessarily reflect the exact reality, saying:

“I think it's healthier to be concerned about the reality, because I think that's how you shift the perception over time. It's important that people keep calling out where businesses aren't doing things well. In the short term this undermines trust, but in the longer term it provides an incentive for organisations to be better.”

Research based on a Rapid Evidence Assessment - conducted by the CIPD, CEBMa and the Australian National University - to identify the factors that influence ethical behaviour at work, asked three key questions: 

• To what extent is unethical behaviour the result of individual choices?
• Is unethical behaviour the result of organisation or industry-wide problems, in particular organisational culture or ingrained norms of behaviour?
• How far is unethical behaviour due to the difficult or compromising nature of decisions that people face at work?

The research revealed that personality and mood affected people’s behaviour - frustrated worked were more likely to act unethically. Organisational culture and leadership appears to influence unethical behaviour, but moral leadership and ethical climate enhance ethical behaviour. 

It was found that certain situations can impact on ethical behaviour. Time pressure or isolated decision making can increase the likelihood of unethical behaviour - whereas accountability and checks can reduce it. 

Chadi Moussa - client partner at Let’s Talk Talent and former HR Director - stated that young people usually held businesses to a higher standard, thus highlighting how crucial it is for organisations to maintain a strong ethical reputation in order to attract the best talent. He added:

“People have an expectation that businesses operate ethically, and if that means that companies pay more voluntary tax, or if that means that companies now show clearly how they’re addressing some corporate social responsibility issues, then that's something they need to do – because it's about attracting and keeping the best people.”  

Philippa Foster Back - Director of IBE - said:

“Business appears to be increasingly proactive in addressing certain issues of public concern, such as discrimination in the workplace and openness of information. However, the fact that corporate tax avoidance, executive pay and environmental responsibility remain top of the list – and the latter two at increased proportions – indicates that business is not doing nearly enough to address the ethical issues that the public are most concerned about.”