Top CEOs Place High Value On Corporate Ethics And Social Responsibility To Drive Business

Remember Gordon Gecko from the movie Wall Street? Little did we know then how closely life could imitate art when the likes of Enron, Bernie Madoff and a worldwide financial crisis lambasted the world’s economy a few years ago. But it also vaulted companies like the Ethisphere Institute, which since 2007 has annually compiled a list of World’s Most Ethical Companies, into the foreground of discussions involving the corporate ecosystem in the United States and abroad, reports Forbes. Today, several studies illustrate the cultural changes that have elevated ethics and corporate social responsibility (CSR) more than ever.

To further explore this, I contacted leaders from various industries to discuss the state of corporate ethics and responsibility. Via email, I spoke with:

• Dan Amos, Chairman and CEO, Aflac, 11 time recipient of Ethisphere’s World’s Most Ethical Companies award and the leader in voluntary insurance sales at the worksite in the U.S.

• Timothy Erblich, CEO, Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices

• Rodney Martin, CEO, Voya Financial, a leading company that helps Americans plan, invest and protect their savings; and a 4-time World’s Most Ethical Companies honoree.

Robert Reiss: What phrase defines ethics and explain why?

Dan Amos: “Ethics is a mindset, not an option.” There is no alternative in today’s highly skeptical culture and when you do it right, consumers will respond in a positive way.

Tim Erblich: “Good Ethics is Good Business.” In fact, there is a growing body of data, including our own, that shows that the financial return of ethics (ROE) is significant.

Rodney Martin: Ethics is a reflection of our commitment to doing business the right way. We emphasize trust and transparency — and we reward our people based on not only what is achieved, but how it is achieved.

Reiss: What is the relationship between social corporate responsibility and ethics?

Martin: Corporate responsibility includes key aspects of a company culture, such as ethics and transparency; diversity, inclusion and equality; environmental sustainability; governance; and volunteerism and philanthropy. It has been invaluable in defining and building the character of the Voya brand. Corporate Responsibility, highlighted by the commitment of our people, demonstrate the authenticity of our culture — and help to deepen our relationships in our communities and with all of our stakeholder groups.

Erblich: Corporate Social Responsibility is a critical component of the overall ethics quotient. As is governance culture, transparency, risk management and employee, customers and community relations. At the same time, company culture, diversity, gender equity, philanthropy, keeping a healthy workplace environment are all traits of a socially responsible company. It is all combined to build trust.

Amos: I believe ethics is a subset of corporate social responsibility. Ethical companies will always display strong governance and compliance. Socially responsible companies are ethical but also understand their overall obligation to make the world a better place. You cannot be responsible on one hand and behave unethically on the other.

Reiss: What are best practices in building an ethical culture?

Amos: Understanding these three concepts will help build an ethical culture:

1. Your culture begins at the top. Building a culture of ethics will not work if leaders are not providing the moral compass.

2. Communicate and celebrate responsibility regularly.

3. Understand that you cannot be partially ethical because that means you are partially unethical.

Martin: A culture of ethics and integrity starts with leadership and the example that leaders set for the rest of the organization — through their actions every day. It must be part of your core values that serve as the foundation of your ethical culture, your strategies and your actions — they define who you are. At Voya, one of our five values is: “We Do the Right Thing.” Building an ethical culture must be centered on doing the right thing — in a safe and open environment — where anyone can speak up and identify behaviors that are not aligned with a culture of trust and integrity.

Erblich: Empower your managers at the local level as they provide immediate guidance to employees. In addition, building an ethical culture requires:

1. Commitment: Corporate cultures are not built overnight.

2. A focus on Integrity

3. Tone from the top. The c-suite must be all in.

4. Measure and communicate results.

5. Incorporate culture into regular activities and not only during annual survey times.

6. Lean on third parties to help alleviate employee concerns over speaking their mind in an open and honest fashion.

Reiss: What insights do you have on measuring ethics?

Amos: First I would stress that you do have to measure, otherwise you are just guessing. We use our annual scientific corporate social responsibility survey to measure what people expect from companies they do business with and then we act on that data. We also work with Ethisphere and Reputation Institute to validate the direction of our ethics and CSR programs.

Erblich: Measuring ethics is challenging. But you can measure through peer-to-peer analysis and networking.

Another obvious, yet often neglected method is to directly engaging with your employees. Our experience shows that companies often focus on measuring broader employee engagement while failing to go deep enough on specific compliance, ethics and values-related topics and risks. Routinely surveying customers, shareholders and employees can also produce insights of how your company is perceived.  You can also measure through peer-to-peer analysis by joining exclusive networks like the Ethisphere’s Business Ethics Leadership Alliance (BELA), which focuses on the impact of business ethics.

Martin: Reputations and trust are built over time, but they can be lost in a moment. Our participation in the Ethisphere Institute’s annual World’s Most Ethical Companies® process enables us to benchmark Voya with other industry leaders to see where we measure up. It is the trust of our stakeholders that enables us to help our customers to make important financial decisions — and achieve a secure financial future.

In summary, the customer experience is one way to drive business, but on top of that is the affinity that people have with your brand. In short, do they like you; do they respect the work you do for the community and do they believe you play by the rules? Successful companies like Aflac and Voya have figured out that what used to be afterthoughts in the business world, are now table stakes for any business looking to thrive.