How has the culture of ethical business changed in the last 25 years?
I am not sure it has actually changed. Companies have simply recognised the need to be more explicit about doing business ethically.
Major developments have been that companies now, in the main, provide guidance to staff about expected behaviours, ways of handling certain situations and so forth, usually in the form of a code of ethics/business practice. This has happened because the ‘job for life’ syndrome where one would learn alongside another employee about how the company worked no longer is the case. People switch careers or companies more frequently and have more diverse backgrounds than 25 years ago, so they need to understand more quickly how the company operates.
What has been the toughest challenge of your career?
The toughest challenge has been to do the right thing even if it meant I went out on a limb! It is rewarding though when doing so is recognised subsequently as having been the right thing to do.
What do you consider your career high points and/or your greatest achievements?
Finding myself at the Institute of Business Ethics which combines my interest in business, seeing it run successfully with education and encouraging people to share best practice – all within a charitable not-for-profit organisation.
If you could set one piece of global legislation to make businesses work more ethically what would it be?
I think if companies had to state in their memorandum and articles of association when they set themselves up how they are going to conduct their business (not just what the company is going to do), a benchmark would be set to measure that company’s performance.
What are the main factors that attract people to working with the IBE?
We are a small, friendly team who work closely with our subscriber base and others who share an interest and passion for the subject. Every day is different so there is no time to get stale!
In terms of ethics, what are your greatest fears for the UK business community?
I fear that cynics will never acknowledge the good that business does and the way, in the majority of cases, that businesses behave. Businesses and companies are human societies in themselves, with well and poorer behaved individuals making up the whole. Sadly, there are some rotten apples but to judge all by the few is unfair.
And your greatest hopes?
My hope is to prove the cynics wrong through businesses providing goods and services and conducting themselves in an open and fair manner that earns the respect and trust of the wider community.
How has the IBE utilised new technologies to progress its work and message?
We have Twitter and Facebook pages and regularly update and review our website; always looking for new ways to improve communication with our subscribers and others interested in the subject. During 2012 we will be introducing webinar events to reach out to those unable to attend our events in person.
The response to the Bribery Act from the business world has been well documented; but from your own point of view, what have been the most significant contentions and concerns with adhering to the legislation?
The legislation, for the most part, is common sense if you wish to stamp out bribery and corruption, which the business world needs to do as it is so corrosive. The most difficult element is how to say ‘no’ to a facilitation payment when you are at the front line and a lot hinges on whether you pay or not. This can be made worse if the payment made actually equates to the official’s salary as the local government knows they can get away with such practice.
Do you think the communications regarding the Bribery Act from the MoJ et al have been adequate?
In general, yes, though clearer practical guidance regarding facilitation payments would have been helpful. The SFO has now issued further guidance on this.
What do you see as the IBE’s main responsibilities when it comes to the Bribery Act?
Ensuring that experiences and practical solutions that companies have, relating to the Act, are shared for the benefit of all.
IBE has always fostered strong academic partnerships – how do you hope this will evolve in the future?
We will continue our annual student essay award, which for the last three years has had an Olympics theme of Ethics, Business and Sport, co-sponsored by the Pierre de Coubertin Committee.
We are also doing research into the Teaching of Business Ethics, an initiative co-led with the Institute of Global Ethics, to encourage the standard setters to include a larger element of teaching business ethics in their criteria for evaluation.
Thirdly, we are encouraging higher education institutions to establish codes of ethics, following up from a publication we did with the Council for Industry and Higher Education a while back. This was picked up on again by Lord Woolf in his recent report on the LSE where he concluded that such institutions should have a code of ethics.
For further info about the IBE visit www.ibe.org.uk
View our interview with David Harris, Head of Business Conduct at BAE Systems.
Financial companies are amongst those likely to be targeted for incidents of employee fraud. Recent news that former state Senator Christopher Maselli was jailed for 27 months, for fraudulently obtaining $1.7 million, highlights that fraudulent behaviour is carried out by people from all areas of society.
The financial services industry recorded one of the highest losses to fraudsters amongst UK sectors, according to data released by the National Fraud Authority (NFA)*. Its Annual Fraud Indicator (AFI) found that £3.6 billion was lost from fraudulent activity, which is only a slight decrease on the 2010 figure of £3.8 billion. Despite utilising improved fraud prevention methods, card transaction losses accounted for £440 million, cheque fraud £30 million with on-line banking has recorded an increase of 14% equating to £60 million. Mortgage fraud stood at £1 billion and insurance at £2.1 billion. Following collaboration between the NFA and the Federation of Small Businesses (FSB) a new inclusion to the AFI showed losses to SME’s employing less than 250 people contributed £780million toward fraudulent activity.
Banking is no longer the transparent financial service it was; the ever-changing environment in which they operate means that the regulatory problems struggle to be resolved: new issues emerge and old issues reappear in a different form. It remains imperative that companies utilise new technologies to assist with incident management and provide employees with an effective tool to quickly communicate events that may carry risks of loss or litigation. Greater emphasis must be placed on educational initiatives to enhance and promote the benefits of fraud prevention and detection systems within companies. As part of Expolink’s on-going commitment to helping businesses reduce the risk of fraudulent activity, it introduced a web-based Incident and Case Management solution that provides a comprehensive interface for data entry, reporting and investigative enquiries and much more.
Report Exec allows users to create, share and protect detailed records of incidents taking place within the company. Using the online reporting facility, financial organisations can immediately provide a tool to log unlimited reports of unusual activity anywhere in the world at anytime, whilst managing the flow of information to administrators far more efficiently. Complete with a comprehensive case management module, specific incidents can be investigated whilst powerful trend analysis properties help identify more serious circumstances.
It is hoped that the AFI statistics will push initiatives in the field of fraud prevention further for the financial sector. It is vital that companies work together and take action to prevent the increase in fraudulent activity. In the current economic climate, businesses need to work intelligently in all areas of loss prevention and improve efficiency to maintain a competitive edge.
(* Figures obtained from NFA)
