In order to sustain ethical behaviour within an organisation, it needs to have an ethical culture.
On 23 February, CFO South Africa hosted a webinar, in partnership with the Financial and Accounting Services Seta (Fasset), in which a panel of leading industry experts revealed that ethics can’t be taught, but need to be instilled within the culture of an organisation.
Opening the discussion, Fasset research director Ebrahim Boomgaard said that, in South Africa, there are currently a lot of stories of unethical practices happening within all professions, not just in accounting. “What some of these leaders seem to be forgetting is that, in a world where everything and anything can be bought and sold, integrity and ethical behaviour are very important.”
Given that these professionals all come from places where they had to learn about ethics, he asked, how do they forget these principles when they go out and practise and end up doing things that hurt their organisations, communities and themselves?
“It all comes down to a person’s morals,” Ebrahim said. “Ethics are regulations that need to be complied with. Morals are when you hold yourself accountable for your actions and can discern between what is right and what is wrong.”
Can ethics be taught?
Ebrahim then asked the other panelists whether ethics can be taught, and if they can, why leaders are still getting it wrong.
SAICA COO Fanisa Lamola explained that ethics are never about what people are being taught or what they are reminded to do, but about the good within them.
She added that the good in people is influenced by the environments and cultures they find themselves in. We can teach you about ethics and most people study and learn about ethics from first year until they complete their articles, but it goes beyond that. We need to create a culture where people have ethics at the forefront of their organisations.”
The panelists agreed that, in order to prevent unethical behaviour in an organisation, you need to instill an ethical culture. “Our members can never be an island,” said Fanisa. “In an organisation, you do things as part of a culture.”
She explained that, if you are the only one in a community that is doing the right thing, you will get lost within those doing wrong. So you need to get all the stakeholders on board with an ethical culture. “The National Treasury wants to professionalise and regulate the whole financial function so that it’s not just the top management who know what is expected and what the regulations are, but that everyone down the line is also informed and empowered.”
Fanisa said that, at SAICA, their aim is not to just teach ethics, but to show their members how they can create an ethical culture – not just follow a code of conduct. “We try to create a culture of people who know what is good for them and what is good for the next person by exposing them to various ethics scenarios and teaching them what to do when it happens.”
IIA SA CEO Julius Majopelo said that, in many institutes professionals are taught ethics as a knowledge item instead of a behaviour item. “If you pass your ethics exam, are you really ethical?”
He explained that professionals’ ethical nature shouldn’t be determined from an exam. Instead, institutes need to observe their students’ behaviour during their studies in order to make an informed, sustainable decision.
Prosecuting unethical behaviour
The panel was then asked how professional bodies go about disciplining members who are unethical. Julius explained that the measure of a professional body’s success is difficult in a market where you have an uneven playing field. “The majority of professionals in the market are not members of professional bodies, so we can’t hold them accountable when unethical behaviour occurs.”
He said that, in order for professional bodies to start making a dent in the ethics environment, there need to be systems in place that bring everyone to the same playing field within the ethics code, and hold everyone to the same standards. “We can only hold our members accountable for unethical behaviour. What happens to those who are not members?”
Another challenge that professional bodies are facing is that they don’t have the right model in place to be able to take large disciplinary actions against unethical members because they don’t have the capital.
Fanisa agreed, saying: “If we were to focus our investment on disciplining members, we would never have sufficient funds.”
For that reason, she said that the strategy of professional bodies has to change. “You can never instill ethics by disciplining members. You need to prevent unethical behaviour before it gets to the point where you have to take disciplinary action.”
The panellists concluded that the only way to sustain ethical behaviour within an organisation is to bring everyone to the same playing field and build an ethical culture that informs and empowers all its stakeholders.
