Building bottom lines on ethics

By Adrian Feasey and Rodger Spiller

This article first appeared in the NZ Herald in January 2000. It is reproduced here as part of the Money Matters tribute to Rod Oram, who as then Business Editor of the NZ Herald, invited Rodger to write this and two other columns that are shown as separate blogs on the Money Matters website.

Businesses are increasingly reflecting upon ethics and reaping benefits through this process.

The Four Ps of ethical business: purpose, principles, practices and performance measurement provide a framework for this reflection and achieving a triple bottom-line of financial, social and environmental performance.

This was the focus of the fourth annual International Business and Consciousness Conference in Mexico last November, which attracted 450 participants from 21 countries.

Among the presenters were internationally acclaimed academics and authors Terry Deal and Lee Bolman, who suggested that people have become suspicious and cynical about business. This is reflected in the popularity of the cartoon character Dilbert, created by Scott Adams, who has become the 90s most widely-read management guru by "preaching that managers are clueless, hypocritical and selfish."

While this cynicism can result in organisations and individuals not achieving their full potential, more businesses are looking to address this situation using ethical reflection.

They are building stronger relationships with their stakeholders, (employees, customers, community, shareholders, suppliers and the environment) by finding out the perceptions of each group about where the company is now, where they would like it to be and how it could get there.

The case for ethical reflection was also made by Michael Rennie, a director with international consulting firm McKinsey & Company. McKinsey and others are assisting individuals within organisations to identify life goals, and consider how these can be achieved, at least in part, through their work.

In doing so, Mr Rennie says, people are motivated to "bring all of themselves" to work and to become more creative. People shift from task fulfilment to leadership, independence to interdependence and boss to coach.

Increasingly, employees are looking for more than just a pay cheque. They want to work for companies they can identify with morally and philosophically.

Examples of ethical, financial, social and environmental performance can be seen in many business practices. The Ethical Profile system includes an inventory of 10 best practices for each of the six stakeholder groups.

Examples include environmental waste management, employee learning and development, innovative giving to the community and good returns to investors.

Examples demonstrated at the conference do not come from companies claiming to be perfect. Doing ethical business may be enlightened self-interest but it is not easy - it demands vision and commitment.

US-based children's clothing catalogue company Hanna Andersson has been recognised for five years by Working Woman magazine as one of the "100 Best Companies for Working Mothers."

Co-founder Gun Denhart maintains that "if you go to work and worry about your child, you won't be productive." Employing more than 250 people, the company reimburses employees 40 per cent of childcare costs.

Ray Anderson, chairman of the multinational industrial textile manufacturer Interface, reflects a commitment to strong environmental performance. He says his company intends to lead the way to the next industrial revolution by becoming the first sustainable corporation, and eventually a restorative enterprise.

"We know, broadly, what this means for us. It is daunting. It's a mountain to climb that is higher than Everest."

Local businesses adopting this approach provide examples to others. The Kiwi tall-poppy syndrome may lead to criticism of the pioneers, however these businesses are well placed to capitalise upon their foresight by achieving sustainable ethical, financial, social and environmental performance.

Just as New Zealand has benefited from the pioneering efforts of businesspeople in the past, it could enhance its claim to being "first to the future" by encouraging the ethical performance of local businesses.

The challenge and opportunity for all is to create a vision of how we can positively contribute individually and in business as we move towards the new millennium.

* Adrian Feasey works for the Peace Foundation and hosts a weekly radio show Adrian's Piece on BFM. Rodger Spiller is Managing Director of the personal investment advisory firm, Money Matters, Director of the New Zealand Centre for Business Ethics and a Director of Businesses for Social Responsibility.