Boosting business with ethical behaviour

Fairtrade obligations and social responsibility are both examples of ethical change becoming more important and mainstream within businesses

In recent years, business ethics—the morals, values and principles that guide an organisation—has become increasingly important. Fairtrade, social responsibility and good governance have all followed from heightened levels of corporate scrutiny.

Take the fallout from the BHS debacle. A former paragon of retail, it once had 180 stores on the high street. Then, in 2015, Sir Philip Green sold it for £1 to Dominic Chappell and his firm Retail Acquisitions—offloading £1.3 billion in debt, which included a pensions deficit of £571 million in the process. In 2016, BHS went into administration with the fallout nearly losing Green his knighthood and resulting in his paying of £363 million into the BHS pension scheme.

According to Philippa Foster Back, director of the Institute of Business Ethics (IBE), ethical principles have shot up the corporate agenda. In her view, ‘there is no escaping current increasing political pressure for exemplary ethical behaviour from our businesses’.