Executives 'only pay lip service to ethics'

Senior executives are hypocrites who pay lip service to business ethics, but consistently fail to practise what they preach.

In a survey of more than 300 top managers in a wide range of organisations, the non-aligned Industrial Society found a disturbing "ethics gap" between what British business said and what was carried out.

While 71 per cent of respondents said executives should always consult people before making decisions that affect them, only 46 per cent said that such an approach was adopted by their organisations.

About 86 per cent of respondents said companies should "communicate with employees openly, honestly and frequently", but only 59 per cent said their business did so.

Around 61 per cent of managers thought organisations should never do business with suppliers, contractors and distributors whose behaviour was contrary to the company's own standards. Only 44 per cent believed their firm lived up to such a standard.

On the sensitive issue of pay, 83 per cent agreed that employees should be rewarded fairly, but only 66 per cent said that happened in practice.

While 55 per cent of those responding to the questionnaire said organisations should enable employees to balance home and work, only 30 per cent thought that such a practice was true of their own organisation.

Just over 90 per cent of respondents said organisations should respect people's dignity, but only 72 per cent thought their firm did so.

Ironically, three-quarters of those responding said that maintaining ethical standards would have a positive effect on financial performance.

More than half said ethics had become more of a priority over the last three years, but two-fifths said they had never consulted their employees on the issue.

Jo Gardiner, of the society, said that organisations needed to work with employees to define the ethical standards which should underpin their business practices.

"These standards should reflect the business environment while being relevant to people's real-life jobs and decisions. The gap between what managers know is good practice and what they see happening in their organisations is worrying. Directors and managers should lead by example, demonstrating commitment to their organisation's values."