Blowing your own credibility

Keep it to yourself, but business ethics should have nothing whatsoever to do with corporate success or failure, says Stephen Overell.

The writer CS Lewis once asked if there was a difference between a man who thinks honesty is the best policy and an honest man. He believed there was: it is the difference between a conviction of the heart and the pursuit of an appearance. While he is being watched, the man who thinks honesty is the best policy will play safe and act honest, but is not motivated by honesty in itself. The honest man, meanwhile, is bound by an internal ethical standard that dictates his behaviour, irrespective of external scrutiny or reward.

In UK business circles, it is the politicians of honesty who are triumphing. Extraordinary amounts of intellectual effort are being expended on answering the question 'do business ethics pay' in the affirmative, or outlining 'the business case for corporate social responsibility'. The object is always the same - the inherent rightness of a course of action is not a persuasive motive; it has to make you rich, too.

Ethics, classically defined, was disinterested: it was concerned with human character and conduct, the principles of moral behaviour. Today, business ethics seem to be all about self-interest. The fundamental question is whether good behaviour will finesse the corporate brand and fatten the corporate wallet.

Philosophers may well stifle a donnish snigger at this. Throughout the study of ethics, English thinkers have always ploughed a very singular furrow. Never happy with the idea of the ethical as a self-justifying, motivating principle, they sought to justify the ethical life in terms of its beneficial effects. Thus, the peculiarly English contribution to ethics has been a dogged insistence that morality was about 'utility'. Jeremy Bentham suggested the maximisation of pleasure was the point of it and actions could be assessed according to the principle of the greatest happiness of the greatest number. Other aspects of morality were branded 'irrational'. English thinkers that followed him, such as John Stuart Mill, thereafter tended to maintain that moral actions could be judged only by looking at the consequences.

With this inheritance, it is not surprising that UK business ethics have now descended to a spectacular new level of crassness. For happiness or pleasure, insert 'wealth'. The fixation is to make 'doing the right thing' lucrative. This is what organisations such as the Institute of Business Ethics, Business in the Community, and to some extent the Department of Trade and Industry, are devoting their energy to. The message is that responsibility, honesty, duty, morality, and concern for employees and suppliers are all very well, but businesses cannot be expected to take them seriously without a bottom line imperative.

If you think like this, I suppose it is not surprising that discovering a link between a company's price-earnings ratio and the presence of a code of ethics is held to be momentous. If, on the other hand, you think that responsibility, honesty, duty, morality, and basic human concern are all important obligations for and in themselves, irrespective of consequences, the finding of a link is worse than irrelevant. Businesspeople, like everyone else, possess feelings and inclinations that do not revolve around the profit motive.

Let us be clear: I am not saying there is any contradiction between an organisation that tries to behave ethically and a successful one. Why on earth should there be? But I am saying that material self-interest is not and can never be an ethical consideration; it is merely a prudential one. In the same way, a man who gives money to charity to improve his reputation with the Rotary Club acts no more morally than if he had spent the money on a new yacht. The consequences may be different, but morality - or the lack of it - is the motivation.

The great criticism of English theories of utility was that they allow the possibility of 'moral corruption' to set in. If ethical behaviour is justified in terms of its beneficial effects, surely it can be adjusted or amended in the light of those effects. If an overwhelming financial benefit follows from flouting an ethical principle, obeying the principle ceases to be a 'best policy' and becomes a burden. The best policy becomes to ditch the ethics.

Most of us, however, would say that if business ethics is to mean anything at all, then it cannot be manipulated in this way. It is incumbent on any company that adopts an ethical stance that that position is not seen as political, but is absolute and binding and has nothing whatsoever to do with success or failure.

It may seem a strange point to make given recent events, but in many ways the debate about business ethics in the US appears to be far healthier than the UK.

Regulators in the US have rightly decided American corporations need more rules to obey. But beyond that, discussion of ethics has taken an introspective turn, emphasising the importance of 'character', 'integrity' and 'values' among business leaders.

In a widely noted remark, Carly Fiorina, the chairman and chief executive of Hewlett Packard, said: "Good leadership means doing the right thing when no one's watching."

It is this idea of "when no one's watching" that UK campaigners continue to struggle with.